Philadelphia Medicine Summer 2018 - 22

p h i l a m e d s o c  .o rg

Feature

Physician
Employment
Agreements
Key Issues and
Considerations
By: George Bodenger, Attorney

Introduction
Physician employment agreements memorialize relationships between
physicians, as employees, and the myriad of organizations such as hospitals,
health systems, and private medical practices that serve as employers. The
objective of this article is to provide a practical analysis of the components
of a typical employment agreement between an employer entity and an
individual physician for professional medical services. This article also
discusses the impact of continued consolidation within the health care
industry of physician employment arrangements, resulting in many
physicians finding themselves with new employers.

Key Provisions of Physician Employment Agreements

Physician's Employment Status and Duties
The employment agreement should state whether the physician
is employed on a full-time or part-time basis. The professional and
administrative services that the physician is to provide pursuant to the
employment agreement should also be specified in reasonable detail. In
addition, the agreement should address the physician's on-call coverage
responsibilities. Finally, the employment agreement should memorialize
the circumstances under which the physician is permitted to perform
other "outside services" (such as speaking engagements or expert witness
testimony), and which party (the employer or the physician) is entitled
to the income, if any, generated from these services.

Compensation
Compensation arrangements in physician employment agreements vary
widely, based on a number of factors, including the physician's specialty, the
type of employer, geographic locale, etc. Several alternatives are typically
considered when structuring the employed physician's compensation
arrangement, as discussed below. Irrespective of the compensation
methods used, the employment agreement should clearly document the
methodology for determining the amount of the compensation to be paid
by the employer to the physician for his or her services rendered pursuant
to the employment agreement.
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