On November 13, 2012, the American Medical Association ("AMA") House of Delegates issued new guiding principles for physicians entering into employment and contractual arrangements. The six principles issued by the AMA are intended to provide physicians with guidance as to how to handle potentially problematic aspects of the employer-employee relationship and include addressing: (1) conflicts of interest; (2) patient advocacy; (3) contracting; (4) hospital medical staff relations; (5) peer review and performance evaluations; and (6) payment agreements. With regard to contracting, the Principles provide that physicians should be able to freely enter into contracts with hospitals, health care systems, medical groups, insurance plans and other entities as permitted by law and medical ethics without coercion and such arrangements should be negotiated in good faith. The Principles expressly urge both the employer and the employee to "obtain the advice of legal counsel experienced in physician employment matters when negotiating employment contracts." All too often, well-respected attorneys who do not specialize in the field of healthcare fail to address important issues such as covenants not to compete and/or solicit patients or malpractice insurance when drafting and/or reviewing employment contracts due to their lack of expertise on the subject. Typically, the review of a proposed employment contract only involves a handful of billable hours, and the benefit of having such a review is immeasurable when considering the duration of a physician's career.
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