Build foundation for new practice model

Contract Language. By Steven M. Harris, AMNews contributor. Oct. 2, 2006.

CONTRACT LANGUAGE

A column examining the ins and outs of contract issues

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Tired of practicing in a foundation or similar model? You are not alone. The main complaints we hear about foundation models are the high cost of doing business and poor billing and collection efforts by management. These can lead to lower compensation for physicians, who then start to feel they can make more and do it better in smaller settings.

But before you leap, please note there are traps for the unwary.

Read your contract for employment with the foundation and understand it. If there is a disagreement between you and the foundation, the terms and conditions of the contract will break ties.

Your contract may allow you to recruit current staff, such as your receptionist, nurse and physician assistant, but they may not be receptive.

That expensive model you would like to leave is expensive, in large part, because of the high cost of staff salaries and benefits. Your support staff will expect you to match, or certainly come close, to what they were getting from the foundation.

Be careful to check whether you (and staff) need to be employed at year-end to receive matching pension or other benefits from the foundation. If so, plan your departure in January so you will not leave this match on the table.

Hopefully, the foundation will have insured you on an occurrence basis, thereby alleviating the need to purchase a reporting endorsement or "tail" insurance. Occurrence basis refers to liability insurance that covers settlements or claims for harm sustained by others because of events occurring while a policy is in force, regardless of when a claim is actually made.