Drafting and Negotiating Provider Agreements with Independent Physicians
Provider agreements with independent physicians are on the rise as practices and hospitals seek to control costs. An experienced physician-owned clinic attorney at Innova Health Law can help you with negotiating and drafting these crucial documents.
The structure and terms of these provider agreements are crucial in many respects. Not only do they represent binding legal contracts between a practice and a provider, but they also set out terms that both govern the relationship and evidence compliance with the law. You should not leave anything to chance when negotiating these agreements because mistakes can lead to lawsuits and potential regulatory enforcement actions.
When you are considering an independent provider agreement, schedule a free case discovery with a physician-owned clinic lawyer at Innova Health Law. We can review your specific situation and make recommendations, while providing both general knowledge and drafting services for the individual agreement.
What Is in an Independent Provider Agreement?
An independent provider agreement allows a physician to provide services to a hospital or other type of medical practice without becoming an employee. From a financial and employment standpoint, this agreement makes the physician an independent contractor. It is essential that this agreement is properly drafted to protect the medical business from regulatory scrutiny and potential lawsuits. A well-drafted agreement can further a productive relationship between the provider and practice.
The independent provider agreement will contain a number of key terms, including:
- A statement that the physician is an independent contractor and not an employee
- The exact services that the physician will be providing to the hospital or practice
- The compensation to be received by the provider
- How malpractice insurance is covered
- A statement that the provider retains autonomy to make medical decisions
Risks to Consider When Drafting an Independent Provider Agreement
There are numerous risks that the parties must consider when drafting and negotiating a provider agreement. How compensation is paid is extremely important in these agreements. Physicians and practices are subject to strict laws, such as those relating to kickbacks and fee splitting. If the agreement is poorly drafted, both the physician and the practice could face enforcement action.
Supervision is also a critical aspect of these agreements. Since the provider is independent, the agreement must detail that they retain the ability to make medical decisions. They cannot be supervised by a non-physician because that may involve the corporate practice of medicine. In addition, the independent provider is not subject to employee-type supervision. Nevertheless, there are certain elements that may require supervision, such as state scope of practice rules and facility participation standards. It is vital that the agreement be drafted in a way that does not result in a misclassification of the provider. Even if a provider is called independent, they may not be so in function if the agreement imposes certain types of supervision that encroach on their decisionmaking or provides for excessive control.
Aspects of an Independent Provider Agreement That May Be Negotiated
Although certain provisions of the agreement may not be negotiated, there is still some room for give-and-take in an independent provider agreement. Physicians and practices may seek to negotiate the following in an agreement:
- Compensation for the physician (within the confines of the law, since compensation cannot be tied to a percentage of revenue)
- When and how the agreement may be terminated
- Administrative support obligations that the practice or hospital provides
- A dispute resolution mechanism if there are any disagreements
- The hours that the physician works and the services that they are expected to provide
These agreements cannot be ambiguous in any way because they could lead to a dispute. For example, if there is a vague compensation formula, there could not only be disputes between the provider and practice, but there may also be issues with fee splitting and kickbacks.
How Innova Health Law Can Help
Both the provider and clinic or hospital need legal representation of their own when negotiating an independent provider agreement. There is no one-size-fits-all agreement that can be used for each individual situation. One of healthcare lawyers can do the following:
- Recommend a compensation structure that complies with the law
- Structure the agreement in a way that can help avoid regulatory scrutiny
- Negotiate individual terms for the agreement
- Update the agreement as applicable laws change
- Represent a party in any disputes that arise under the agreement
Contact a Physician-Owned Clinic Law Firm
For help with an independent physician provider agreement, speak to an experienced attorney at Innova Health Law. Attorney Matthew R. Ludowig is current in the regulations that apply to healthcare businesses, and he can use his knowledge of the field to help negotiate a beneficial agreement. Schedule a free discovery session with an attorney by messaging us online or by calling us today at (281) 936-9904.