Compensation Agreements

Physician Compensation Agreements in Houston

Health & Medical Law Attorneys Reviewing Compensation Agreements for Texas Physicians

At Hendershot Cowart P.C., our healthcare attorneys have extensive experience reviewing, drafting, and negotiating physician compensation agreements for employers – such as physician groups, hospitals, or health systems – and for physicians considering employment offers.

We work with clients to design or review physician employment contracts with compensation plans that comply with the complex set of state and federal laws that regulate healthcare entities and providers, as well as applicable employment laws.

Let Hendershot Cowart P.C. review and negotiate your physician compensation agreement. Call (713) 909-7323 or contact us online to discuss our services. Hendershot Cowart P.C. serves health care clients throughout Texas.

Physician Compensation Models

There are a variety of methodologies used to determine physician compensation. Generally, the best compensation and incentive structures align physician compensation with the business goals of the practice and take external payment systems into account.

Here are some common physician compensation models:

  • Fixed compensation.
  • Production-based structures involving performance metrics such as work RVUs and other traditional metrics
  • Variable compensation models that blend productivity thresholds with value-based metrics, such as patient satisfaction or patient outcomes

Value-Based Arrangements and Physician Compensation

How is the evolution toward valued-based care impacting physician compensation arrangements? Many organizations are developing value-based goals and setting performance targets based on quality metrics – such as adverse events, patient engagement, patient satisfaction, citizenship (i.e. participation in committees, meetings, etc.) and patient outcomes – as well as a physicians’ ability to demonstrate improvement.

How to Negotiate Compensation in Physician Employment Contracts

Though physician employment agreements cover many aspects of a physician’s employment– from establishing duties, outlining options for dispute resolution, and creating clear restrictive covenants such as a non-compete or non-solicitation agreement – compensation is often a top priority.

The health law attorneys at Hendershot Cowart P.C. consider these elements when reviewing or negotiating a compensation agreement on your behalf:

  • Base compensation – Base compensation is guaranteed salary and may be subject to various tax and regulatory laws, as well as negotiation between parties. When negotiating base compensation, it’s important to focus on compliance, industry relevancy, and any necessary escalation reflecting inflation or added value for multi-year contracts, unless there are production-based terms. Generally, the amount and timing of base compensation should be clearly established in the agreement.
  • Productivity incentives – Many medical contracts use compensation models or schemes that base compensation, or at least a portion of compensation, on productivity. Often, these arrangements use some type of “bonus structure” that takes into account either net collections or measurements such as Work Relative Value Units (WRVUs). For collections-based incentives, clearly defining the productivity formula, amounts, and methodology is critical, as is ensuring the equitable scheduling of patients. For compensation based on measurement, it is important to establish how work units are generated, and if ancillary services are included. Employers should also keep in mind that the bonus structure must comply with applicable laws when ancillary services are provided and when services are reimbursable by government payors.
  • Benefits – Benefits are a significant part of total compensation. Common benefits in medical employment contracts may include health insurance, retirement plans, disability, allowances or reimbursement for travel, or continuing medical education (CME), paid time off and vacation / sick pay, and professional dues or licensing fees. Our firm can assist with drafting and negotiating appropriate benefits based on clients’ individual goals.
  • Other bonuses – In some cases, there may be other bonuses, enticements, or forms of compensation in a medical contract. This may include signing and retention bonuses, moving and relocation expenses, student loan repayment, severances (including buyout formulas), additional compensation for supervision of others, and recruitment bonuses. Any medical contract that provides compensation through bonuses must comply with relevant laws and establish clear benchmarks for when they should be paid. Creativity and flexibility regarding such bonuses and how they’re negotiated is also something both practitioners and employers can benefit from.
  • Buy-in clause – Some medical groups may choose to offer physicians the opportunity to buy into the group, or become a partner, after a period of time or certain benchmarks have been met. These types of agreements can be drafted separately from initial employment agreements. Our attorneys have extensive experience in negotiating and creating buy-in arrangements for health care clients.

Ensuring Compliance, Protecting Your Interests

Ensuring compensation agreements comply with applicable state and federal laws, including the Stark Law and Anti-Kickback Statute, is critical to controlling any exposure to potential violations and the tremendous consequences which may accompany them. As a firm that represents health care clients facing waste, fraud, and abuse investigations, we know the consequences of poorly constructed contracts, and leverage this insight to help ensure regulatory compliance with your compensation agreement, including ensuring compensation meets fair market value requirements.

Trusted Texas Healthcare Lawyers: Call (713) 909-7323

Whether you are a physician entering into an important contract or a medical group looking to establish clear, concise, and compliant compensation agreements, working with proven attorneys can make all the difference. At Hendershot Cowart P.C., our Texas health care and medical law attorneys have demonstrated a proven ability to handle even the most challenging and high-stakes health-care matters. Using this experience, we take a thorough and proactive approach to counseling clients in matters involving compensation agreements, medical contracts, management services agreements, and more.

Call (713) 909-7323 or contact us online to speak with a Texas health care attorney about your medical contract needs.

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