February 24, 2021

Volume XI, Number 55

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February 24, 2021

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Impact of the COVID Pandemic on Physician Employment Agreements

COVID-19 has had a dramatic impact on the health care system, causing a re-evaluation of the way physician care is delivered. During the pandemic, in-person office visits have been postponed or changed to telehealth visits, elective procedures have been canceled, and patients, concerned about contracting COVID, have delayed or postponed their regular visits.

Physician Employment Agreements

This decrease in non-COVID care being provided has caused many physician practices and health systems that employ physicians to need to furlough or terminate several of their physicians. Typical physician employment agreements, however, do not include “force majeure” provisions that would permit employers to furlough or terminate employed physicians without having to satisfy lengthy termination without cause notice provisions (during which time salaries would continue to be paid) or to make severance payments. Such employment agreements also do not typically contain for-cause termination provisions for pandemics or other dramatic decreases in the volume of patient services needed.

Impact of the COVID Pandemic

In order to address the potential for future COVID-19 spikes or new pandemics, physician practices and health systems that employ physicians should restructure compensation to be based primarily on wRVU amounts rather than a fixed salary. Although physician bonus or incentive payments are often structured on productivity or wRVU amounts, base compensation in many health systems continues to be based primarily on a fixed salary regardless of the physician’s productivity or volume of patient services provided. Restructuring compensation to be more wRVU-dependent lessens the financial risk to the employer if future COVID spikes or a new pandemic forces another slowdown in the delivery of health care services.

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©2020 Norris McLaughlin P.A., All Rights ReservedNational Law Review, Volume XI, Number 20
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About this Author

Sandra Jarva Weiss Health Care and Life Sciences Norris McLaughlin Law Firm Pennsylvania
Member

Sandra Jarva Weiss, Chair of the Health Care and Life Sciences Practice Group, has been practicing health care law for more than 25 years and has extensive experience in all areas of health care regulation. She has designed numerous compliance programs and counsels clients on compliance with the Anti-Kickback Statute and the Stark Statute.  She has counseled clients on federal and state patient privacy laws, as well as Medicare and Medicaid reimbursement requirements. Sandra has extensive practical experience from having served as in-house counsel for a large teaching...

(917) 369-8876
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