Can My Employer Legally Do This? - Answers to the Most Asked Physician Contract Questions of 2020

This year Physicians have faced compensation changes amid a relentless pandemic. More specifically, layoffs, pay cuts, reduced hours, conversion to RVU models and higher RVU requirements. Some physicians had to work longer hours to earn the same amount of pay. While others, worked the same number of hours for less pay. This left a lot of physicians with questions about whether their employer was violating their provider contract and what would happen if they terminated their contract. Contract Rx is tackling these questions.

Question: Can my employer change my pay?

Yes, unless you have language in your provider contract that expressly states that your pay is “guaranteed”. Such a guarantee is rare. Most provider contracts include general language that allow an employer to change compensation at its own discretion. This means that your employer can reduce your pay at any time for any reason (subject to the caveat that an employer cannot reduce pay for an illegal reason such as race, gender, religion, etc.).

Question: Can my employer change my compensation model?

Yes, unless you have language in your provider contract that expressly states that your compensation model is “guaranteed” and not subject to change. This would be very rare. Most provider contracts do not guarantee a set compensation model. Most provider contracts also include language that gives your employer the authority to control compensation models and its requirements. Meaning your employer can change the requirements of your compensation at any time. This also means that your employer can convert you to an RVU model or increase the requirements of your RVU model at any time. Yes, this is very one sided but it is very common and does not violate your provider agreement unless the change is only made for an illegal reason such as race, gender, religion, etc.

Question: Can my employer reduce my hours?

Yes. Hours are not guaranteed. While your contract may say that you are full-time and indicate that you have to work no less than 40 hours a week, this is not a guarantee of hours. It is only a commitment on your part and does not obligate your employer to give you such hours. Unless there is language in your provider contract that expressly states that your hours are “guaranteed”, your employer has no obligation to give you a set number of hours. This is very one sided but it is true. Additionally, most provider contracts include language that allow an employer to make adjustments to your schedule.

Question: Can my employer terminate my provider contract?

Your employer can only terminate your contract in accordance with the termination provisions of your provider contract. The same goes for your ability to terminate the provider contract. Termination provisions in provider contracts often allow for immediate termination for cause as well as voluntary termination. The most common voluntary termination provision in provider contracts is the ability for either party to terminate the contract upon 60-90 days’ notice. This voluntary termination provision is the not so secret weapon your employer can use to strongly encourage you to accept a compensation change or higher RVU requirements. It is perfectly legal for your employer to elect to invoke this provision to terminate your contract if you refuse to accept a change in pay.

Question: Is the non-compete in my provider contract still enforceable if my employer voluntarily terminates my contract when I reject a pay change?

Yes. In general, non-compete clauses in provider contracts are enforceable. There is a requirement that a non-compete clause has to be reasonable, but courts often find non-competes reasonable enough to enforce them against physicians despite the doctor shortage in the US. Employers know this and have no problem going to court to enforce a non-compete clause. If you are laid off, most employers will waive the non-compete but an employer is rarely this generous if it terminated your provider contract after a refusal to accept a pay change.

What can you do?

You are probably thinking that your employer has the upper hand and you are right. However, you can take action. The best thing you can do is to not automatically sign a new contract with different pay or compensation model. Do not automatically accept the RVU model. Talk to Contract Rx. There are ways to get the right contract language in your provider agreement that will help ease the burden of these changes.

Hopefully, you found this article helpful. If you have any questions about this article or need help with a provider contract, please contact Contract Rx at [email protected].

Author: Ashley Shaw, CEO & Founder of Contract Rx