Always Avoid the Bad Jobs—Know What to Expect in Contracts

Always Avoid the Bad Jobs—Know What to Expect in Contracts

Norman A. Cohen MD

As a new physician joining a group or as a locum tenens physician working with a staffing agency or directly with a group, you are almost certain to enter into legal contracts that define the obligations of each party and the manner in which you will receive compensation for the services you provide. At some point you may have the opportunity to acquire an ownership interest in the group, and this ownership will also be bound by a contract. This review of the types of agreements is greatly simplified from a legal point of view, but it should give you a basic understanding to guide you when you start encountering these documents.


A physician employment agreement defines the relationship between you and the group that will be employing you. It usually defines the term during which it will be in effect, options for renewing the agreement, methods for terminating the relationship, responsibilities of the two parties, “hold harmless” or indemnification clauses, and requirements for maintaining records. In the body of the agreement or as an attachment, the contract will include the method by which your pay will be calculated and the frequency of payments.

The employer will be responsible for paying certain taxes and withholding federal, state, Social Security (FICA) and Medicare taxes. As mentioned in Chapter 202 on exclusive contracts, pass-through requirements may also be found in this agreement. The employer has a right to control the employee with regard to shifts worked, vacation granted, clinical assignments made, and even establishing policies that relate to the delivery of medical care. In return, the employer bears responsibility for supervising your performance and acting to correct any deficiencies.


An independent contractor is a person or entity such as a limited-liability company (LLC) or corporation that enters into an agreement to provide specific services but is not subject to the control of the other party as to the manner in which the service is delivered. Locum tenens physicians often enter into independent-contractor agreements to provide a specific service, such
as anesthesia care, for a limited time frame. The group hiring the locum has no control over the manner or type of medical care delivered; however, the agreement requires the locum to obtain privileges at the health care facility and comply with all medical staff requirements.

For a group, the advantage of an independent-contractor agreement is having no responsibility for taxes and benefits and not being subject to certain employment laws. The Internal Revenue Service (IRS) has specific requirements that must be met to receive independent-contractor tax treatment. If the group violates these requirements, most notably that of control, the IRS may disallow the independent-contractor agreement, subjecting the group to back taxes and penalties.

Only gold members can continue reading. Log In or Register to continue

Jul 1, 2016 | Posted by in ANESTHESIA | Comments Off on Always Avoid the Bad Jobs—Know What to Expect in Contracts

Full access? Get Clinical Tree

Get Clinical Tree app for offline access