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Termination Of Healthcare Provider Contracts

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The law and regulations surrounding the healthcare field are complicated and replete with landmines that can trap unwary medical groups. Whether negotiating employment arrangements with physicians or dealing with physician-insurer relationships, particularly where the relationship has deteriorated and it is time to legally separate, it is vital to have a knowledgeable and detail-oriented healthcare lawyer on your side. At the Law Offices of Art Kalantar, our healthcare provider contract attorney has years of experience dealing with the various legal and contractual relationships in the healthcare field and is prepared to work on your behalf to deal with either the structuring or termination of contracts between your healthcare entity and outside contractors.

Physician Employment Contracts

Physician contracts can be tricky. Many medical groups, as well as physicians, do not fully understand the parameters of the law surrounding physician employment. Many states outright prohibit physician employment as the “corporate practice of medicine,” meaning that a physician cannot be directly employed by a hospital or clinic, or even boutique businesses such as weight-loss centers, physical therapy practices, or spas. State and federal laws also prohibit a variety of medical business ventures under anti-kickback statutes and other healthcare financing regulations. As a result, physicians typically operate as independent contractors.

A dedicated Los Angeles healthcare lawyer at the Law Offices of Art Kalantar can help your hospital or other healthcare business entity determine the appropriate hospital-physician alignment option as well as draft and structure your physician contracts in order to align your common interests and provide the best care for your patients, while simultaneously protecting the hospital’s financial interests. Part of that contractual relationship is preparing for the need to terminate a healthcare provider contract and properly effectuating a termination when the need arises. Our seasoned healthcare law attorney is ready to see you through the process.

Termination Clauses in Physician Employment and Contractor Agreements

Physician contracts with healthcare entities typically have a set term, for example two years, as well as a provision for early termination if the relationship has deteriorated. The contract can provide “for cause” grounds for termination or can stipulate that termination is “at will,” meaning one or both parties can end the contract without any cause. At-will termination typically has a required notice period, for example 60 days. For-cause termination can be immediate but will typically include some timeframe for curing the reason for termination.

“Cause” should be defined in the contract and can include a variety of circumstances. For-cause events can be, for example, loss of license, loss of hospital privileges, criminal arrest or indictment, loss of participation status with third-payers, as well as broader, catchall provisions such as “material breach” or “willful misconduct.”

The contract should also stipulate what the consequences of termination will be. Termination consequences will likely depend on whether the hospital or the physician initiated the termination and the reason for the termination. Some important termination consequences include: Restrictive “non-competition” clauses that prevent a physician from working for a competitor for a period of time; reimbursement of recruitment costs or signing bonuses paid by a hospital; and tail coverage for medical malpractice claims brought against the physician after the employment relationship has been terminated.

Termination of Network Provider Contracts

Southern California healthcare lawyer Art Kalantar is also prepared to fight for the rights of physicians with regard to insurance providers. Managed care networks require physicians to contractually agree to a limited reimbursement schedule in exchange for placement on the insurer’s list of approved providers, which can be vital for a physician to drum up business. Recently, physicians are being told that they have been unceremoniously terminated from the provider network, in many cases without cause. Physicians who review their contracts and see a “termination without cause” provision may not realize that they have legal recourse: California case law prohibits arbitrary expulsion of a doctor from an insurer’s preferred provider list without due process, regardless of the presence of a termination without cause provision.

If you are a physician or other medical provider and have been kicked from an insurer’s preferred or approved provider list without cause and without process, a Los Angeles healthcare law attorney at the Law Offices of Art Kalantar is here for you. We will ensure that the insurer gives you a full and fair hearing before removing you from their roster so that you do not lose vital business on the mere whims of the insurer.

Your Provider Contracts, Your Healthcare Business, Our Focus – 310-773-0001

California healthcare lawyer Art Kalantar is dedicated to easing your burdens on the business side of healthcare so that you can focus on providing top-notch care to your patients. We are here to help you determine, structure, and negotiate appropriate business alignments between healthcare entities and physicians, as well as between healthcare providers and insurers. We will work to ensure that when those relationships deteriorate, the process of terminating healthcare provider contracts is handled appropriately and with minimal hassle and cost. If you are dealing with healthcare provider contract termination issues, contact us to set up a free consultation. We are headquartered in Beverly Hills but have helped clients throughout California.

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