Compliance The Business of Healthcare

Yin and Yang. Contract Term and Termination.

April 2, 2012

Yin and Yang. Positive and negative. Heads or tails.

Two sides, inseparably linked.

Just like the far less obvious provisions of any agreement: term and termination.

Although this concept is most often experienced by physicians in the context of employment agreements and independent contractor agreements for their services, it is increasingly becoming an issue in the relationship between physicians and physician groups, on the one hand, and hospitals, on the other.

Let’s address the issue head on: No matter how long the stated term of a contract is, two years, five years, fifty years or forever, the true length of that contract must be determined in concert with its provisions for termination.  A seven year employment agreement or a three year exclusive contract with a ninety day without cause termination provision is, in reality, a ninety day agreement.

As more physicians leave true private practice for “alignment” with hospitals, whether as actual employees or via contract relationships such as management agreements, they must ask themselves how long will that relationship last.  And, even more importantly, what will happen, and “what are my options” when it ends?

Think of this as an exit strategy to what you thought was your exit strategy.

Comment or contact me if you’d like to discuss this post.

Mark F. Weiss

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