Pro Employer Physician Employment Agreement

Annotated Model Pro-Employer Physician Employment Agreement

This Physician Employment Agreement (the Agreement) is made by and between (Company), a professional association organized and existing under the laws of the state of (name of state), with its principal office located at , referred to herein as Employer, and (Name of Physician) of , hereinafter referred to as Physician.

For and in consideration of the mutual covenants contained in this Agreement, and other good and valuable consideration, the parties agree as follows:

I. Employment. Employer hereby employs the Physician and the Physician hereby accepts employment with the Employer under the terms and conditions set forth in this Agreement. The purpose of the Physician’s employment shall be to provide professional medical services on a full time basis in the specialty of (e.g., general surgery). The Physician’s specific duties are set forth in Section III. Physician represents that he is board certified in that specialty. Physician agrees that Physician is an employee of Employer, and not an independent contractor.

II. Term

A. Initial Term. The initial term of this Agreement shall commence on (date), hereinafter called the Effective Date and shall continue for thereafter subject to earlier termination as set forth in Section III or to extension as set forth in Subsection B below. The Physician’s first day of work shall (date), referred to herein as the Starting Date.

B. Extension of term. Employer shall have the right to extend this Agreement on the same terms and conditions for an additional period of by giving the Physician written notice no later than automatically for a succeeding term of one year unless either party gives notice to the other at least prior to the expiration of any term, stating the party’s intention not to renew. Any renewal of this Agreement shall be on the same terms and conditions as set forth herein.

III. Duties of Physician

A. Scope of Physician’s Duties. The exact nature of the medical duties of Physician are set forth in Exhibit A attached hereto and made a part hereof. Employer will assign patients at the Employer’s sole discretion but in a reasonable and equitable manner. The Physician shall also perform such other services relating to the practice of medicine as the Employer may assign from time to time.

B. Hours. Physician’s required hours of practice shall be at least days per week, hours per day, and may include holiday, weekend and evening hours, as determined by the Employer, as may be necessary to provide patient care and assigned administrative services. The Physician shall also be expected to spend such time as necessary to remain on active staff at . Employer will make up call schedules for the practice on .

C. Administrative and Miscellaneous Duties and Responsibilities. The Physician will cooperate with the administration of the medical practice. Such cooperation shall include, but not be limited to, the following:

1. Maintaining medical records in a timely fashion, billing, peer review and the Employer’s compliance programs; and

2. Provide appropriate supervision and review of services rendered by physician assistants and other non-physicians involved in the direct medical care of the Employer’s patients.

D. Billing and Compliance. Physician shall not directly submit a billing or statement of charges to any patient or other entity for services arising from the practice of medicine, nor shall the Physician make any surcharge or give any discount for care provided without the prior written authorization of the Employer. Employer has complete authority to assign patients to various employees, set fees, determine write-offs and take any other action relating to billing and collection of fees for clinical services. All accounts receivable generated for services rendered by the Physician pursuant to this Agreement are the property of Employer. Physician shall participate in all compliance programs adopted by the Employer. Physician shall have the right to review any and all billings for his services bearing his or her name or provider number. The Physician is required to request the correction of any errors including providing a refund to payers if warranted.

E. Rules and Regulations. Physician agrees to abide by rules, regulations and guidelines provided by Employer for all employees having comparable duties, which are attached hereto as Exhibit B. The Employer may from time to time amend, add or delete rules, regulations or guidelines at the Employer’s sole discretion, and such amendment will not affect the enforceability or terms of this Agreement.

F. Professional Standards. Physician shall perform his duties under this Agreement in accordance with the rules of ethics of the medical profession. The Physician shall also perform his or her duties under this Agreement in accordance with the appropriate standard of care for his or her medical profession and specialty.

G. Requirement of Physician to Notify Employer of any Detrimental Professional Information or Violation of Contract Rules or Policies. During the term of this Agreement, the Physician shall notify the Employer immediately, or as soon as is possible thereafter, in the event that:

1. The Physician’s license to practice medicine in any jurisdiction is suspended, revoked or otherwise restricted;

2. A complaint or report concerning the Physician’s competence or conduct is made to any state medical or professional licensing agency, including without limitation, the Medical Board of (name of state);

3. The Physician’s privileges at any hospital, health care facility or under any health care plan are denied, suspended, restricted or terminated (or under investigation for medical disciplinary cause or reason);

4. The Physician’s controlled substance registration certificate (issued by the U.S. Drug Enforcement Administration), if any, is being, or has been suspended or revoked;

5. The Physician’s participation as a Medicare or Medicaid provider is under investigation or has been terminated;

6. There is a material change in any of the information the Physician has provided to the Employer concerning the Physician’s professional qualifications or credentials; and

7. The Physician’s conviction of a felony or crime of moral turpitude;

H. Physician must also notify the Employer within days of any breach of this Agreement, violations of any of the Employer’s rules or regulations, whether by others or by the Physician, or if the Physician is subject to or participant in any form of activity which could be characterized as discrimination or harassment.

I. Managed Care Contracts. Employer shall make all reasonable efforts to obtain membership for the Physician in all health maintenance organizations (HMOs), preferred provider organizations (PPOs), independent practice associations (IPAs), and any other managed care organizations with whom the Employer contracts. The Employer shall make its best efforts to ensure that the Physician is eligible to participate in all managed care contracts in which the Employer participates. If, within six (6) months, the Employer is unsuccessful in obtaining eligibility for the Physician to participate in any contract covering more than % of the patients in the practice, Physician may at his or her option terminate this Agreement on sixty (60) days’ notice. The Physician shall, as directed by the Employer, observe the provisions of all managed care contracts which the Employer may enter into on behalf of the Physician for health care services with managed care organizations, e.g., HMOs, IPAs, PPOs, medical service organizations, integrated delivery systems and physician-hospital organizations. Employer, under contracts with managed care organizations, may obligate the Physician to accept a certain number of patients; the Physician agrees to accept at least the required numbers of patients. The Physician and the Employer agree that the Physician shall have the goal of conducting at least patient office visits per day, when consistent with appropriate professional standards.

IV. Employer’s Obligations -- Equipment, Facilities and Personnel. Employer shall provide or arrange to have provided an office and examination rooms on its premises at , for use by the Physician in treating and examining patients. Employer, at its expense, shall engage the services of such administrative, nursing, scheduling and billing assistance as necessary for the Physician to fulfill his or her obligations under this Agreement. The facilities provided shall contain such medical equipment and supplies, and shall be stocked with such medicines, drugs, dressings and other items necessary to practice the Physician’s specialty. Employer shall also furnish access to such computer equipment, instruments, gloves and items of wearing apparel required to perform the Physician’s services under this Agreement.

V. Physician Compensation

A. Fixed base salary

The Physician shall receive a salary at the rate of $ per year, payable in equal installments, on the first and 15th day of each month, subject to state and federal income tax withholding, employment taxes and such other deductions that may be required by law or may be agreed upon by the Employer and the Physician.

Alternative: Compensation Based on a Percentage of Collections. Employer shall separately identify all services rendered by the Physician to the practice’s patients. Employer shall use reasonable diligence and the same methods for collecting the Physician’s billings as are used for the billings of other physicians in the group. When collected, the Employer shall pay the Physician as compensation % of the Physician’s billings within days of their receipt.

B. Bonus Compensation based on Percentage of Salary. Within fifteen (15) days of the close of each quarter, the Employer shall pay the Physician bonus compensation of up to % of the Physician’s salary in addition to the base salary paid to the Physician if the Physician has collected $ in the preceding quarter. If the Agreement is terminated or expires between bonus payments, the Physician has no vested interest whatsoever in any bonus compensation that may have accrued in that bonus period.

C. Accounting -- Remuneration to physician. All remuneration the Physician receives due to the practice of medicine shall be promptly turned over to the Employer. Remuneration from medical-related teaching, lecturing, writing, directorship, shall belong to the Physician. Earnings from nonmedical care activities will not be considered to be earnings from the Physician’s professional activities and shall belong to the Physician.

VI. Reimbursement of Expenses. The Physician shall be entitled to reimbursement by the Employer for reasonable and necessary expenses incurred in the performance of the services hereunder, including travel expense for hospital visits during working hours, provided that, for all expense reimbursements, the Physician furnishes the Employer with records in compliance with Internal Revenue Code §274 and provided that the Physician has sought and obtained prior written approval of such business expenses in excess of $. Additionally, the Employer shall reimburse the Physician the following:

A. Continuing medical education (CME) costs up to $/year;

B. Subscriptions to journals and costs of books up to $/year;

C. Up to $ per month for all legitimately deductible professional entertainment and promotional expenses. Prior written approval is necessary for reimbursement of any costs in excess of $.

VII. Employer-paid Benefits and Time Off.

A. Insurance. Physician shall be entitled to participate in the Employer’s and other insurance benefits to the same level as other physician employees of the Employer. The Employer shall pay all monthly premiums or up to $ per month per employee toward the cost of the premiums.

B. Qualified Pension or Profit Sharing Plan. During the term of this Agreement and for any extensions thereof, the Physician shall be entitled to participate in the Employer’s qualified defined plan.

C. General and Professional Liability Insurance.

1. Patient care services performed within the scope of the Physician’s employment by the Employer shall be covered by professional liability insurance with a policy limit of at least $ per claim, with an aggregate limit of at least $ at the expense of the Employer.

2. If professional liability insurance is on a “claims made” basis, the Employer shall purchase extended reporting endorsement coverage (“tail” coverage) for a period no less than years after termination of the Physician’s employment.

3. In the event that either (i) the Physician terminates his employment without cause or (ii) the Employer terminates the Physician’s employment for cause and the Employer’s professional liability coverage is on a claims made basis, the Physician shall obtain professional liability tail coverage insurance for acts or omissions of the Employee during employment, for a period of no less than years after termination of the Physician’s employment.

4. In the event that the Physician knows of a professional liability incident involving the Physician or receives notice of a claim or of an intended claim that alleges that the Physician or any other of the Employer’s employees is or may be liable for a professional act or omission, the Physician shall immediately notify the Employer of such fact.

D. Dues and License Fees. The Physician shall maintain membership in the American Medical Association and the Medical Association. Employer shall pay the dues and assessments to maintain such memberships. The Physician must also maintain active licenses and U.S. Drug Enforcement Administration (DEA) numbers in the state of . Employer shall pay all such licensing fees.

VIII. Moving and Interim Expenses. Employer shall pay the Physician an amount not to exceed $ for the relocation expenses incurred by the Physician in moving from his or her present residence to a residence near the Employer’s practice.

A. The usual and customary expenses of selling the Physician’s home (broker’s commission, however, shall not exceed %); and

B. The reasonable costs of moving the Physician’s belongings to his or her new residence (but the Physician shall select the carrier in coordination with the Employer having obtained three estimates).

All relocation expenses shall be paid to the Physician within days of the Physician’s presentation of adequate documentation of the expenditure.

IX. Vacation, Continuing Medical Education (CME) and Time Off.

A. Physician shall be entitled on a non-cumulative basis to working days of time off per year which shall be used as vacation or CME time as the Physician may determine. All time off must be requested in writing in advance and approved by the Employer.

B. Sick leave. Physician shall be entitled to paid time off for sick days of per year. Sick leave shall accrue at the rate of days per pay period and may accrue from year to year up to a total of ninety (90) working days. Unused sick leave is not compensable upon termination.

X. Holidays. Subject to the call schedule, the Physician shall be entitled to paid holidays per year, specifically: New Year’s Day, Martin Luther King Day, Memorial Day, Fourth of July, Labor Day, Thanksgiving and Christmas.

XI. Loyalty and Confidentiality Covenants

A. Duty of Loyalty. Physician agrees to perform loyally and conscientiously his or her duties under this Agreement.

B. Covenant Not to Compete during the Term of the Agreement. The Physician shall not, without the express prior written consent of the Employer, directly or indirectly during the term of this Agreement, render services of a professional nature to or for any person or firm for compensation, or engage in any activity competitive with or adverse to employer’s business or practice, whether alone, as a partner, or as an officer, director, associate or shareholder of any other corporation, or as a trustee, fiduciary or other representative of any other entity, except as provided hereunder. This clause is limited to activities within a -mile radius and extends so long as this Agreement is in force to provide medical services. The parties agree that damages for breach of this covenant would be difficult to calculate and, therefore, agree to the amount of $ as the amount of liquidated damages (not as a penalty) to be paid by Physician to the Employer in the event of breach on this covenant.

C. Covenant not to Compete after Termination of Employment. Physician agrees that, for a period of after this Agreement has been terminated by the (for cause or for any reason) the Physician will not, directly or indirectly, solicit or accept employment with the same or similar duties than under this Agreement, with any person, medical group or any other entity that is a competitor of the Employer, or enter into competition with the Employer, either by himself or herself, or through any entity owned or managed, in whole or in part by the Physician within a -mile radius of the Employer’s facility where the Physician worked.

D. Confidentiality Clause. The Physician shall not, during the term of this Agreement or at any time thereafter, directly or indirectly use, permit others to use or disclose any confidential information except as is necessary: (i) in the course of performing duties as an employee of the Employer; (ii) as may be required by law or by professional ethics; or (iii) with respect to patients who wish to continue to see the Physician upon employment termination. For purposes of this Agreement, the term confidential information includes all such information that is by law so protected, as well as any and all information that is maintained and designated as such by the Employer, or any employee of the Employer, including but not limited to the following:

1. Information regarding the identity, address, health plan or insurance status, medical history, diagnosis and treatment of the Employer’s patients (whether or not treated by the Physician);

2. The records and proceedings of quality assurance, peer review or utilization review evaluations;

3. Information about the financial operations, business plans, strategy of the Employer;

4. Information agreed to be held as confidential with entities with whom the Employer has contracted. Physicians shall treat such information as confidential by seeing that it is stored securely and kept under password, if stored on a computer.

XII. Indemnification. Physician hereby indemnifies and holds harmless the Employer and its directors, officers, employees and agents from and against any claim, loss, damage, cost, expense (including reasonable attorneys’ fees) or liability arising out of or related to the performance or nonperformance by the Physician of any services to be performed or provided by the Physician under this Agreement to the extent not covered by insurance.

XIII. Termination

A. This Agreement, and the Physician’s employment by the Employer, shall be terminated as follows:

1. Automatically, with cause:

a. Upon the Physician’s loss, restriction or suspension of his or her professional license to practice medicine in the state of (name of state);

b. Upon the Employer’s inability to obtain malpractice insurance on behalf of the Physician or if the cost of obtaining such insurance exceeds by % or $ the cost of obtaining such insurance for other physician employees;

c. If the Physician violates the state Medical Practice Act; or

d. If the Physician’s professional practice jeopardizes imminently the safety of patients.

2. Immediately, at the Employer’s discretion, if:

a. The Physician is arrested and charged with a felony under state or federal law;

b. Physician violates ethical and professional codes of conduct of the workplace as specified under state and federal law; or

c. Inadequate performance in medical care, documentation, quality review, management style or personal relations are grounds for earlier termination at the Employer’s discretion.

3. Upon the termination of this Agreement for any reason, the Physician shall be entitled to receive such compensation as has accrued up to the effective date of termination.

B. Patient Records upon Termination and Notice to Patients. All original patient records shall be property of the Employer. Upon termination of this Agreement, Physician shall return any such records as may be in the Physician’s possession to the Employer, subject to the Physician’s right to copies of records, as follows:

1. Upon termination, the Physician is entitled to copies of patient charts and records upon a specific request in writing from a patient.

2. Moreover, upon and after termination, full access to copy patient records will be allowed to the Physician (at the Physician’s expense) for any reasonable purpose, such as in the event of a malpractice action or administrative investigation proceeding against the Physician, for medical research, or to compare a new case with an old one.

3. When the Physician requests copies of medical records, the Physician must pay $ per page or the actual costs for reproduction of oversize documents or those which require special processing, as well as reasonable clerical costs incurred in making the records available.

XIV. Disability or death

If the Physician dies or is absent from practice for weeks, or is, in the sole judgment of the Employer, unable to sustain the duties of working full time due to ill health or injury, the Employer may terminate the Physician’s employment by supplying the notice provided in Paragraph XIII above. Employer shall pay the Physician compensation during any period of the Physician’s medical absence in accordance with the Employer’s sick pay policy at the time. The Physician’s rights under any disability insurance policy are strictly a matter between the Physician and the insurance company underwriting the disability policy. If the Physician’s employment terminates by reason of his or her death or medical absence, the Employer shall only be obligated to pay any unpaid and accrued salary and bonuses due at the Physician’s last date of employment.

XV. Rights of Physician upon Temporary or Total Disability.

A. Temporary total disability shall mean that the Physician is unable to perform his or her obligations under this Agreement for a period of weeks. If the Physician becomes temporarily and totally disabled, he or she shall be entitled to a medical leave of weeks, in addition to the sick leave provided for in Paragraph IX above.

B. Rights of physician upon Temporary Partial Disability. Temporary disability shall mean that the Physician has become disabled for a period of weeks. Temporary disability is partial when the Physician is able to do some work. If the Physician becomes temporarily and partially disabled, the Employer shall allow him or her to work on a modified schedule for the duration of his or her disability or until this Agreement expires, whichever comes first.

XVI. Severability. The invalidity of any portion of this Agreement will not and shall not be deemed to affect the validity of any other provision. If any provision of this Agreement is held to be invalid, the parties agree that the remaining provisions shall be deemed to be in full force and effect as if they had been executed by both parties subsequent to the expungement of the invalid provision.

XVII. No Waiver. The failure of either party to this Agreement to insist upon the performance of any of the terms and conditions of this Agreement, or the waiver of any breach of any of the terms and conditions of this Agreement, shall not be construed as subsequently waiving any such terms and conditions, but the same shall continue and remain in full force and effect as if no such forbearance or waiver had occurred.

XVIII. Governing Law. This Agreement shall be governed by, construed, and enforced in accordance with the laws of the State of (name of state).

XIX. Notices. Unless provided herein to the contrary, any notice provided for or concerning this Agreement shall be in writing and shall be deemed sufficiently given when sent by certified or registered mail if sent to the respective address of each party as set forth at the beginning of this Agreement.

XX. Attorney’s Fees. In the event that any lawsuit is filed in relation to this Agreement, the unsuccessful party in the action shall pay to the successful party, in addition to all the sums that either party may be called on to pay, a reasonable sum for the successful party's attorney fees.

XXI. Mandatory Arbitration. Any dispute under this Agreement shall be required to be resolved by binding arbitration of the parties hereto. If the parties cannot agree on an arbitrator, each party shall select one arbitrator and both arbitrators shall then select a third. The third arbitrator so selected shall arbitrate said dispute. The arbitration shall be governed by the rules of the American Arbitration Association then in force and effect.

XXII. Entire Agreement. This Agreement shall constitute the entire Agreement between the parties and any prior understanding or representation of any kind preceding the date of this Agreement shall not be binding upon either party except to the extent incorporated in this Agreement.

XXIII. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all of which together shall constitute but one and the same instrument.

WITNESS our signatures as of the day and date first above stated.

(Acknowledgement before Notary Public)