QUESTION:        We heard that some hospitals have recruited physicians, had them sign employment contracts, then “red flags” are raised during credentialing, or the physician is denied appointment and clinical privileges.  Is there any language in an employment contract to help in those cases?

ANSWER:            We recommend that all employment contracts contain a provision that states:

If the Physician fails for any reason to commence performing services on the Commencement Date, the Employer may, at its option, cancel this Agreement by serving written notice of cancellation to the Physician.  In the event notice of cancellation is sent, the parties shall have no further obligation to one another.

The provision does not require an employer to cancel the contract, but does give the employer the option.  So, if the physician does not commence performing services because the application has not been acted on because the employer or the hospital is gathering further information, the employer may decide that it does not want to exercise the option at that time.  Conversely, if the “red flags” are significant, the employer most likely would cancel the contract.

While this language is useful to include, it is not a guarantee that a physician who has been recruited will go away quietly.   In fact, we have seen a number of cases where the physician still sues, so the best practice is to better align your recruitment and credentialing decisions so that you do not find yourself in the situation where a new recruit has any significant “red flags.”  For additional information, join us for our audio conference

“Aligning Your Employment and Credentialing Decisions”
July 2, 2019 – 1:00 pm to 2:00 pm (ET)

or contact us for information on how to obtain a CD or MP3.