Our healthcare and business law firm often assists physicians and other providers in employment matters, from reviewing proposed contracts to litigating non-compete matters. Physician employment agreements are often between 15 to 30 pages long, but many important terms are imbedded in those pages. We’ve written previous material on physician employment, including Keys to Negotiating a Good Contract and Physician Non-Compete Agreements. Our firm has recently been dealing with issues raised by co-terminus language, or language providing that a physician’s hospital clinical privileges automatically terminate when the employment contract is terminated. Herein, I provide (1) an overview of the language and (2) potential issues raised by such language. The next blog post will focus on possible ways a physician can protect themselves from those issues. If you have NPDB or employment questions or would like to discuss this blog post, you may contact our healthcare and business law firm at (404) 685-1662 (Atlanta) or (706) 722-7886 (Augusta), or by email, email@example.com. You may also learn more about our law firm by visiting www.hamillittle.com.
- Co-Terminus Language
Here is an example of co-terminus language:
Physician’s Medical Staff Membership and privileges shall terminate concurrently with the termination or expiration of this Agreement. Any provision of Company policies to the contrary notwithstanding, Physician and the Company agree that the Company has no duty to provide any notice, hearing or review in connection with the termination or suspension of Physician’s Medical Staff Membership and privileges hereunder.
The point of co-terminus language is so that the hospital does not have to follow their medical staff bylaws, which typically provide that privileges must either be voluntarily resigned or involuntarily removed. Involuntarily removing a physician’s privileges is an involved process through which the physician has due process a right to a hearing and to appeal the outcome. The hospital avoids this through co-terminus language.
- Potential Issues Arising From Co-Terminus Language
Two main potential issues that come to mind have to do with National Practitioner Data Bank (“NPDB”) reporting responsibilities and future privileges applications.
a. National Practitioner Data Bank
The NPDB comes into play in this situation because actions on a physician’s clinical privileges may be reportable actions to the NPDB. As provided by the NPDB guidebook: “Adverse clinical privileges that must be reported to the NPDB are professional review actions – that is, they are based on a physician’s or dentist’s professional competence or professional conduct that adversely affects, or could adversely affect, the health or welfare of a patient.” This, of course, will not come into play if a physician’s employment ends my mutual agreement or without cause, but what happens when a physician is terminated from employment “for cause” based on professional competency concerns or professional misconduct? This is a potential problem for physicians. The good news is that the NPDB Q&A section addresses this potential issue. The bad news is that the entity has a lot of discretion. Here is the NPDB’s guidance:
It does not matter that the employment termination, which was a result of the hospital’s employment termination process, automatically resulted in the end of the practitioner’s clinical privileges. However, if the hospital had performed a professional review of the practitioner’s clinical privileges and revoked the practitioner’s privileges as a result of the review, the professional review action would have been reportable, even if the action started as an employment termination. In order to be reportable to the NPDB, adverse actions must be the result of professional review. Generally, the reporting entity decides when a professional review has occurred.
b. Future Privileges Applications
Regarding future privileges applications, there is typically a question that the hospital asks to determine if a physician-applicant ever had his/her privileges voluntarily or involuntarily lost, revoked, or suspended. If your employment ended and privileges are consequently immediately terminated, then the answer to these types of questions may accurately be “yes,” which may require you to explain the situation or, even more so, submit a waiver request to the hospital. This is not generally an issue when employment ends without cause or by mutual agreement, but when the employer terminates the employment for cause, the explanation can put the physician in a murky situation. We advise seeking the advice of counsel when answering such questions.
If you have NPDB or employment questions or would like to discuss this blog post, you may contact our healthcare and business law firm at (404) 685-1662 (Atlanta) or (706) 722-7886 (Augusta), or by email, firstname.lastname@example.org. You may also learn more about our law firm by visiting www.hamillittle.com.
*Disclaimer: Thoughts shared here do not constitute legal advice.