6 Key Employment Terms Physicians Should Evaluate
Healthcare consolidation continues to increase, in New York and elsewhere. Physicians continue to join larger equity groups. Those that enter these groups may face standardized employment contracts, compensation models linked to productivity or performance, and centralized decision-making. It may attempt to reduce your influence over staffing and clinical resources. However, New York’s strict CPOM laws prevent many of these common issues. Regardless, you should be on the lookout for certain key employment terms when you evaluate a consolidation or PE-backed deal.
The medical transaction attorneys at Daniels, Porco & Lusardi, LLP are ready to help.
What To Look for In Your Employment Contract
Even in large consolidated groups, many employment terms remain negotiable. Physicians should pay close attention to the following areas.
1. Compensation Structure
Compensation models vary widely across consolidated groups. Common structures include:
- Base salary plus productivity bonuses
- Work RVU-based compensation
- Quality or value-based incentives
- Hybrid models combining salary stability with performance metrics
Physicians should ensure that:
- Productivity expectations are realistic
- Compensation aligns with fair market value (FMV)
- Incentives do not compromise clinical judgment
- Benchmarks reflect specialty-specific norms
In New York, compensation must also comply with CPOM and fee-splitting rules, meaning bonuses cannot be tied directly or indirectly to medical revenue or profits.
2. Clinical Autonomy and Decision-Making
Consolidated groups often centralize clinical protocols, scheduling, and resource allocation. Physicians should negotiate for:
- Reasonable control over clinical decision-making
- Input into scheduling and patient volume expectations
- Protection against non-clinical interference in medical judgment
- Clear boundaries between administrative and clinical authority
New York regulators closely scrutinize arrangements that allow non-physicians to influence clinical care, making these protections essential.
3. Non-Compete and Restrictive Covenants
Non-compete clauses are common in consolidated groups, but they must be reasonable in scope, geography, and duration. Physicians should evaluate:
- Whether the non-compete is necessary
- The geographic radius relative to patient population
- The duration of restrictions
- Whether the clause applies if the employer terminates the physician without cause
New York courts enforce non-competes only when they protect legitimate business interests and do not unduly restrict a physician’s ability to practice.
4. Termination Provisions
Termination clauses determine how and when the employment relationship can end. Physicians should negotiate:
- Clear definitions of “cause”
- Adequate notice periods
- Severance protections
- Grace periods for correcting alleged performance issues
Ambiguous termination language can leave physicians vulnerable, especially in large organizations where decisions may be made by administrators unfamiliar with the physician’s practice.
5. Workload, Call Coverage, and Staffing
Consolidation often leads to standardized staffing models and call schedules. Physicians should ensure that:
- Call responsibilities are equitable
- Staffing levels support safe patient care
- Workload expectations are clearly defined
- Additional duties (administrative, supervisory, or teaching) are compensated
Without clear terms, physicians may face an increased workload without corresponding compensation. You must also be on the lookout for too much control in the hands of non-physicians, which can quickly violate CPOM laws in New York. An experienced attorney can help ensure compliance.
6. Ownership or Partnership Opportunities
Some consolidated groups offer pathways to partnership or equity participation. Physicians should clarify:
- Eligibility requirements
- Buy-in costs
- Voting rights
- Profit distribution policies
- Whether ownership confers meaningful influence
The standard language utilized in these contracts may be unfamiliar to you, and may carry obligations or impacts you do not expect. When making such an important legal decision, having the advice of a skilled attorney is critical.
Negotiating Fair Employment Terms if You Plan to Consolidate Your Medical Practice
Consolidation continues to change the healthcare landscape in New York. But you still have every right to negotiate a fair and compliant employment agreement. By using an attorney with knowledge of applicable CPOM laws and years of negotiating experience, you can best protect your rights. The attorneys at Daniels, Porco & Lusardi, LLP are ready to help. Contact us today for a consultation.