JACR: Breaking up is hard to do -- dealing with provider departures
To help practices prepare for the departure of a provider, Reisman and Breitenbach laid out 10 steps practices can take to protect themselves in an article published in the January issue of the Journal of the American College of Radiology.
- Get it in writing – No matter how much prior discussion took place or how much practice leaders may trust new physicians, a written agreement must be in place. “The lack of a written agreement virtually guarantees a protracted legal battle as both sides engage in factual disputes regarding the actual terms of their oral agreement,” wrote the authors, who added that without an agreement issues like custody of medical records and access to patient lists can’t be settled reasonably and will likely be imposed by strangers in the aftermath of the departure.
- Make sure the agreement is current – This includes both ensuring the agreement has not expired and also ensuring the agreement reflects the current status of the relationship.
- Have reasonable restrictive covenants and enforce them – “One of the best ways a practice can protect itself from a departing physician is to have noncompetition and nonsolicitation covenants in place,” wrote Reisman and Breitenbach. These agreements prevent recently departed physicians from pulling patients away from the old practice. Restricting practice in the area where 80 percent of the original practice’s patients come from for three years is a good rule of thumb.
- Protect confidential and proprietary information – Written agreements should have clear provisions classifying sensitive information, such as patient and referral lists, as confidential and proprietary information that must be returned to the practice. Practices should limit information access to a “need to know” basis, since courts could refuse to enforce confidentiality provisions if all reasonable steps to preserve confidentiality were not taken, according to the authors.
- Understand rules regarding patient records and contacts – Two issues that often arise with the departure of a physician are whether that physician has access to copies of the medical records for patients he or she treated and whether the departing physician can or should inform patients of the physician’s new practice location. “These issues in most jurisdictions are complex because they involve the intersection of corporate law and medical ethics rules,” wrote Reisman and Breitenbach. “And generally, most courts will bend over backward to ensure that the continuity of patient care is preserved at all costs.”
- Have accurate financial reporting – Without accurate financial records, disputes are more likely. “Compensation disputes are extremely problematic during physician departures,” wrote the authors. “If a departing physician can raise a significant question as to whether the practice paid the required compensation, courts likely will be reluctant to enforce noncompetition covenants, nonsolicitation covenants or confidentiality agreements.”
- Observe legal formalities and requirements – By conducting regular meetings, filing tax information and maintaining minutes or other records, agreements are easier to enforce in the event of a departure.
- Maintain good relations with support staff – If staff is more loyal to the departing provider than the practice as a whole, it can wreak havoc on business, wrote the authors.
- Protect third-party payor relationships – Provider agreements should be in the name of the practice and addresses for reimbursement payments should be under control of the practice.
- Have professionals ready to assist with damage control – “Finally, given that the departure of a physician is often an emotional experience, it is vitally important to have legal and financial professionals in place to provide calm, reasoned advice,” concluded Reisman and Breitenbach.