Physician Recruitment, Relocation and Employment

1. Physician Recruitment, Relocation and Employment Larry D. Sneed, Esq Health Law Advisory Group, LLC Atlanta, Georgia Telephone: 404-842-1611 E-Mail: Larrydsneed@bellsouth.net

2. Stark Law -v- Federal Anti-Kickback Statute • Stark Law • Civil Statute • “Strict Liability” • Penalties apply when violation is discovered regardless of “intent” • Anti-Kickback Statute • Criminal Statute • Implies Intent “knowing and willful” violation • May also be enforced by HHS through non-criminal, administrative actions

3. Employment -v- Relocation/Recruitment • Direct Employment by a Hospital/Physician Practice • Treatment as an “Employee” for purposes of autonomy • “At-Will” Conditions • Hospital provides financial assistance to relocate the physician to its community • Placement in Solo Practice or into an Existing Group Practice • Requires a long-term commitment

4. Employment • Direct Relationship with a Hospital or Existing Physician Practice • Position is generally salaried with benefits • May involve certain restrictions relating to work environment, etc. • Employer controls the relationship “At Will”

5. Relocation/Recruitment • Under the Stark Law, a hospital is allowed to pay a physician to relocate to hospital’s geographic area in order to “induce” the physician to establish a practice in the community and to be a member of the hospital’s medical staff. • Private Practice • Establish a new solo practice • Join an existing group

6. “Loan that Can Be Forgiven” • Hospital may provide an “income guarantee” and pay incremental expenses • Income guarantee = Salary and Benefits • Incremental Expenses = Operating costs associated with opening a practice or bringing a new doctor to an existing practice • Examples: lease for office space, staff salaries, utilities, medical and office supplies • NOTE: May not include CAPITAL EXPENDITURES

7. Trade Off/Forgiveness • Physician must commit to remain in the hospital’s geographic area for a specified period of time • Generally one year during the period of income support • Three additional years of “FORGIVENESS” • Physician signs a promissory note and may be held liable for repayment of monies provided in the event that the contract is broken

8. Specific Requirements: Relocation Agreements • Must be in writing and signed by both or all parties • Two-Way Agreements • Three-Way Agreements • The arrangement CANNOT be conditioned on the physician’s referring patients to the hospital. • The amount of remuneration under the agreement may not be determined in a manner that takes into account (directly or indirectly) the volume or value of any referrals by the physician or business generated between the parties. • The physician must be allowed to establish medical staff privileges at any other hospital and to refer business to other entities (with certain exceptions).

9. Working with Physician Recruiters • What is an agent? • Who retained/approached the recruiter • Where is the primary interest • What’s in it for the recruiter • Outside Recruitment Firms • Retained Firm • Contingency Firms • In-House Recruiters

10. Contract Negotiation • Contract is “BINDING” • What’s in writing controls • Verbal promises not included in the contract once executed are generally not enforceable • If it’s that important to you....get it in writing • Don’t sign a document that you don’t understand

11. Trouble Spots • Compensation • Base: is generally the compensation for the “work” • Bonus: additional earning potential based on certain pre-determined conditions • Productivity: should be measurable and clear • May not be based on REFERRALS or VOLUME GENERATION • Never accept a variable compensation package

12. Trouble Spot • Termination Clauses • With Cause: termination occurs when specific events take place (i.e. loss of license, criminal offense, government or regulatory sanction) • Without Cause: may occur at employer’s discretion “At Will” • Always get a reasonable notice: Minimum 30 days (longer if possible) • Always make sure that the compensation is payable up to and through the termination date

13. Trouble Spot • Non-Compete Clauses • Limited Restrictions (Generally must reasonable as determined by either state law or generally acceptable business practice) • May not require you to forfeit your medical practice or hinder your ability to practice professionally • May limit your contact with former patients and employees

14. Open Forum Questions & Answers