Medical Practice and the Inclusion of Physicians

Medical Practice and the Inclusion of Physicians

Physiciansare often assisted by their accountants when it comes to the negotiation of terms within a contract. Yet, the accountant must also advise his physician to get the contract reviewed by an attorney before proceeding any further. That’s because a physician is entitled to find out what he’s getting into before the contract is signed.

Whenevera physician is about to be included in a medical practice, it is imperative that he or she goes through the agreements of practice association and employment contracts. That’s because the final decision will be resting on these important documents and their study can make itmuch easier to make.

Agreements of Practice Association
Whenit comes to practice association, physicians will typically be affiliated with a particular practice for two years (the time period mayvary). The physician, upon successful association, is then invited forobtaining a practice interest.

Theagreements of practice association include terms and conditions with which a physician can associate him or herself with a practice pertaining to medicine. These agreements should comprise of elements like:

The actual date of joining and the months or years served within the practice.

  • The location of practice
  • Incentive compensation and salary guarantees
  • Time provided for continuing education and vacation
  • Employee benefits (both the ones that are provided and the ones that aren’t)
  • Reimbursement of costs occurring within the term of employment
  • Duties that are specifically required by the employer
  • A statement offering ownership interest after the success of probation
  • Terms of notification and termination
  • Furtherrestrictions or conditions prevailing in the association i.e. policies regarding office supplies and outside employment etc.

Contracts of Employment

Acontract of employment comprises of the obligations and rights that areenjoyed by both the employee and the employer. The contract can also beused for refuting IRS assertions labeling a physician’s issued compensation as arbitrary.

The contracts of employment should contain the following aspects:

  • Thedate on which the practice was started along with the duration for which the entire duration of the contract i.e. months and/or years 
  • The places where all practice will take place i.e. clinics or houses etc.
  • The payment and computation of salaries and bonuses
  • Leave granted for continuing education and vacation
  • Employee benefits (both the ones that are provided and the ones that aren’t)
  • Repayment of expenses that occurred within the duration of employment
  • Specific duties and tasks that the employee must complete
  • If applicable, automobiles provided to the employee 
  • Terms for termination and the provision of notifications in this regard
  • Otherrestrictions or conditions governing the physician’s employment i.e. rules pertaining to incomplete practice and the assigning of patients toa physician.

Incentive Compensation
Certainagreements of practice association allow the physician to make use of an opportunity that yields extra income. This opportunity is provided asan incentive to physicians for introducing new patients to the practice.

Allcontracts and agreements that are involved in the initiation of medicalpractice by physicians should be carefully and thoroughly studied priorto acceptance. This will allow both the employer and the employee to get a hold of the events that are about to take place.