What to include in an employment contract

Contractual and employment relationships only make sense if the strategic goals of the physician and his or her organization are aligned using appropriate compensation incentives for productivity, quality, safety, and service. Such legal documents must be crafted carefully to avoid Stark self-referral and anti-kickback violations, but when done well, they will serve both parties and provide necessary quality services to the community.

Current contractual relationships include the following: 

  • Comprehensive employment agreements that include productivity, quality, safety, and service metrics and provide for comprehensive services, including call coverage for the un- or underinsured and for the practice
  • Medical and surgical directorships that provide quality oversight of practitioners within a defined clinical service or department
  • Call coverage compensation, particularly for those specialties that do not gain any benefit from voluntary coverage
  • Medical staff leadership with performance expectations and compensation based on the attainment of beneficial strategic goals
  • Service line leadership that includes both clinical and operational oversight in collaboration with members of the nursing and hospital management team
  • Gain-sharing agreements that enable practitioners to help an organization enhance quality while reducing costs and reaping the advantage of reinvestment into their practices based on legally permissible cost savings 
  • Exclusive contracts that permit an organization to have a preferred and protected relationship with a physician group to enable greater control over the quality and costs of the service

A contract or employment agreement is only effective if both parties benefit and cost-effectively provide quality services to the community. Successful clinical integration comes from both parties agreeing on a mutual mission and vision and then crafting economic terms that meet each party’s needs.