Today we are featuring a question-answer session with Jon Appino, who is the founder of Contract Diagnostics. Jon’s company reviews physician contracts and provides advice to help physicians highlight and negotiate the critical components to a successful employer-employee agreement. Contract Diagnostics has been a longstanding sponsor of our website.
Can you highlight the components of a contract and a few aspects to take note of?
We believe contracts are for expectations. The expectation with an employment agreement is how you will trade your time and skill for their money and benefits. So, the agreement should be clear on both. Your time/schedule should be detailed in the agreement to include the location (changes should be with your permission) and your rough schedule (in hours, days, blocks, shifts, etc – changes with your permission). Call should be clear and capped with additional call requiring your permission (and paid). Compensation should be clearly detailed as well as any bonuses. When items are paid, what metrics and thresholds are, termination pay, benefits, etc – all these items and details should be clear in the agreement or policy manual.
Some physician contracts are “non-negotiable”. How should physicians approach these?
This is super important! We hear all the time that agreements are non-negotiable. This may in fact be true and the employer may be unwilling to modify or change the agreement in anyway. This is not an excuse for the physician to not have the agreement reviewed or understand the contents, the risk, the benefits or the expectations. These are all items that can be explained to the physician and discussed/clarified with the employer so long as the physician has the right questions to ask. It’s often not what the agreement states but what it leaves out. There are very important considerations a physician needs to take when interviewing, conducting due diligence, clarifying points, and integrating into a new position. Negotiable contract or not this is an important process the physician needs to understand and conduct in the right way. Since there is no formal training on this, we created Contract Diagnostics to help.
What are your thoughts on contract review for Integrated Health Systems like Kaiser Permanente or Geisinger Health, or even academic institutions?
Kaiser specifically I honestly feel no, they don’t. It would not hurt to know the market data for compensation, or to have good questions to ask around the schedule or expectations on various items but it’s not vital like most all other agreements. I don’t think the physician would waste a few hundred bucks to get on the phone with someone to talk about the Kaiser agreement and understand pay and have those questions to ask, realizing the agreement is not going to change and likely contains little risk.
Academic agreements I feel should be reviewed. Some are three page letters that contain very little information so good questions and knowing what they can add (in the agreement or a side letter) are vital. Other ‘academic’ contracts are 18+ pages with production bonuses and non-competes. These are no different than working for a large hospital system or a for-profit entity.
Do you have any heart-stopping scenarios that your clients have encountered?
We once had a client who was happy with the negotiations, signs the contract, gets credentialed, and relocates for the job. One week before starting, the employer e-mails our client stating that there was a mistake—she had signed for 0.8 FTE, but the pay scale was for 1.0 FTE. The employer volunteers to reduce her salary by 20% and proceed with starting.
What does our client do at this point?
The options are not great. Firstly, there is a signed agreement by both parties. Should she lawyer up? Is that how one wants to start a new job, with a legal dispute? There is a 90-day no cause termination clause in the contract that either party could invoke. Secondly, there might be non-competes, and tail insurance to buy if you want out before you start.
While there may be no right or wrong decision in this situation there are options. This is not a typical situation of course but it’s real and it can and has happened in the past. All you can do sometimes to protect yourself is to do the best due diligence on the contracting process. To have the right questions to ask at the right time with the right person.
This client of ours called us and we walked her thought how to have a honest conversation with the employer. They found a happy medium to meet in with the abbreviated timeline. The ‘horror story’ per se was avoided, but could have been a painful reality
What are your thoughts on attorneys reviewing contracts vs. experienced reviewers like those in your company?
Great question. Attorneys are great and most will/can redline the agreement and make legal changes to documents – these are not what we do here at Contract Diagnostics. Attorneys are also able to help with legal services, again not what we do here. We do not work in a courtroom, interpret statutes, help with speeding tickets or manage a divorce. Our attorneys do review all agreements but they don’t drive the process from a legal perspective. We have a more holistic approach to informing you what they agreement accurately states, what is unclear, and how they can ask great questions of the employer in the right order at the right time. We are also experts on compensation, where we spend our focus. We do not give legal advice like a law firm but are consultants and coaches to the physician in a space they have no formal education in.
Having spoken to physicians who have had their contracts reviewed by Jon, I think that he offers a great service. The cost of contract review is certainly not expensive considering how long you might be working at the job. If you are need of your contract reviewed, head over to Contract Diagnostics and see what they have to offer. They also offer FREE Thursday Webinars if you are interested in hearing more or just have a few questions.
Note: Smart Money MD does not receive any commissions if you decide to opt for his services, but you can certainly let him know that you heard about him through our website. 😉