You Signed What? Contractual Liabilities Are Expanding in Health Care. The Uninformed Can Be Uninsured!
June 30th, 2015
Years ago, we saw for the first time many physicians and their practices executing contracts whereby they were asked to transfer their clinical skill sets from direct patient care within their practices to either:
(a) Non-owned, facility-based supervision;
(b) Third-party, non-practice employee supervision; or
(c) Assisting some corporate entity in developing products and/or services.
Whether by serving as a Medical Director over some department at a local hospital; supervising all local hospital employees participating in a hospital-sponsored program; supervising residents or fellows from a teaching institution; offering clinical advice to a pharma or medical device company; or assisting a nursing home to both develop and administer care parameters for all of its staff and residents, physician demand outside of the practice grew, and continues to grow, significantly.
Some of these contractual arrangements pay very well. Others pay poorly. And, some pay nothing at all. With declining reimbursements, many practices and their physicians see these arrangements as revenue generators or future revenue builders. We get that. Universally though, we see many practices and their physicians giving no thought – NONE – as to how the language in these contracts affects their liability, and how it may affect their coverage under our policy if they are sued for some injury that results from their contractual undertakings.
So, here are some very simple questions that every practice should address to ensure that mistakes are not made in contract negotiation and execution, thereby leaving you with increased liability and, potentially, no coverage for it:
2. Is it mandated that the practice review and approve the contract before it becomes binding?
3. Who ensures consistency in key provisions over multiple contracts within the same practice?
4. Is there mandated, outside legal counsel review?
5. Do you send the contract to your underwriter at Medical Mutual BEFORE any contract is executed to ask whether the contract creates any coverage gaps?
Here are two of the most common problems that we see in contracts sent to us for review and comment:
Contracts in health care are not for the faint of heart. Be smart before signing on the dotted line. Call us anytime for help at 800.662.7917.