Hospital employment contracts are difficult enough for physicians to understand on their own, but there is a second document that should always accompany a draft contract for review: the medical staff bylaws. Otherwise, the contract might not be what it seems.
“It's important for young physicians—particularly those completing residency—to know that even though they've gotten hired by a hospital, that doesn’t necessarily mean they're on the medical staff,” said Elizabeth A. Snelson, president of Legal Counsel for the Medical Staff PLLC, which specializes in working with medical staffs, medical societies and medical staff professionals.
Snelson is the author of the AMA Physicians’ Guide to Hospital Employment Contracts (PDF), free for AMA members, which provides expert guidance to physicians contemplating, entering into or working under employment contracts with hospitals or related entities.
“The hospital administrator doesn't make that decision—you have to apply to the medical staff,” she said. “The application goes to a committee of the medical staff, which credentials the doctor and then votes on it. If it passes, it is referred to the hospital board, which also votes on it. This is a complex, time-consuming process.”
To truly know where they stand with hospital employment contracts, physicians need to see the medical staff bylaws.
Download the newly revised AMA Physician's Guide to Medical Staff Organization Bylaws (PDF), which is also free to members.
It’s about safety and quality
It might seem ironic that a hospital administrator could spend $200,000 or more hiring a physician without a guarantee of getting that doctor on the medical staff, yet that can easily happen. After all, the last thing physicians on the medical staff want is a doctor who isn’t up to par.
“The medical staff might say they can't recommend the candidate for privileges because the physician isn’t board certified in a particular specialty, or hasn’t seen enough cases, or hasn’t published enough,” Snelson said. “It's important for the medical staff to have their bylaws say that unless they have approved privileges, the new hire isn't going to get them.”
But not all medical staff bylaws do that, and depending on how they are written, the board may even be able to override the medical staff and authorize privileges anyway.
“There is this tension between the medical staff organization, which is responsible for quality, and the business side, which might say: We need a doctor right now, even if they're not that great,” Snelson said. “That's why the medical staff needs to be independent and needs to be able to say: No, you cannot override our clinical judgment on who can be on the medical staff.”
Learn more about the AMA Organized Medical Staff Section, which gives voice to—and advocates on— issues that affect physicians affiliated with medical staffs, whether employed or in private practice.
Why residents are at risk
“A physician who has been in practice for a bit should be familiar with these concepts, but a resident likely won’t be,” Snelson said. “Residents shouldn't have medical staff membership because they could otherwise end up in the National Practitioner Data Bank for an everyday resident mistake. So they might not even know they have to have a medical staff application to practice in a hospital.”
This is particularly relevant to young physicians who would be uprooting their families for a new job, she noted.
“A signed contract is not enough,” she said. “It should address the fact that they also have to apply for the medical staff, a process that can take six to eight months.”
This is just another reason why physicians should not use ordinary employment lawyers to review their contracts, Snelson noted. Most ordinary employment involves just two parties, but hospital employment is unique.
“In a hospital, there’s the boss—the CEO and the board—and the physician employee, and then there’s the medical staff too,” she said. “Use a lawyer who specializes in physician employment.”
The AMA has assembled a variety of resources to help physicians flourish in the employment setting. That includes developing the Annotated Model Physician-Group Practice Employment Agreement (PDF) and featuring experts’ perspective on collective bargaining for physicians.
Learn more with the AMA about understanding physician employment contracts.
