Contracts Need to Ensure Physicians are Free Agents

The Hospitalist. 2012 October;2012(10):

October 1, 2012 | The Hospitalist

“All monies received by Dr. A from the Permitted Activities shall be remitted to the Practice and shall be included as employee collections in calculating Dr. A’s compensation under this Agreement.”

The last question is whether outside activities are covered by the physician’s malpractice insurance policy. If the employer provides the policy for the benefit of the physician, the employer—and the malpractice insurance carrier—may exclude activities performed by the physician outside of his or her employment with that employer. This often is an issue for physicians who want to moonlight, as moonlighting for a third party frequently is excluded from coverage. It is important that the physician consult the malpractice insurance carrier to confirm whether certain activities are covered under the policy. It may be the case that a separate policy is required to insure the physician’s outside activities, even those activities that are unpaid.

Contract clauses describing what the physician can and cannot do outside of the employment relationship are of key importance. These clauses should mirror the individual physician’s medically related and extracurricular interests, and the financial benefits of these activities—if any—should be addressed in the employment agreement. Don’t forget to check with the insurance carrier to ensure that the activity is covered by the policy, as even volunteering medical services could expose a physician. It is best to address these issues at the onset of the employer-employee relationship. That way, all parties are on the same page from the beginning.

Steven Harris is a nationally recognized healthcare attorney and a member of the law firm McDonald Hopkins LLC in Chicago. Write to him at sharris@mcdonaldhopkins.com.

Inventions and Discoveries

Physicians interested in developing proprietary technology (e.g. devices, techniques, or software) should be aware of who will own their inventions and discoveries. Even though a physician might have invented a new technology, his or her employer may very well own the rights to that technology. Here is a checklist of key items to look out for:

Do you have an employment agreement that requires you to assign inventions and copyrights to your employer?
Does your employee handbook address ownership of inventions and copyrights?
Are you subject to a research and development or technology transfer policy? Generally, if you or your employer are affiliated with a teaching hospital or academic institution, you are likely subject to these types of policies.
Does your employer participate in government-funded research or have a technology transfer office?

Even if the answers to these four questions are “no,” you are not necessarily in the clear. Many additional factors can affect whether your employer has rights to your

inventions and discoveries. For example, when you invented the technology, did you use your employer’s resources (e.g. laboratory time, personnel, supplies, computers, office space)? Was the invention made on your own time, outside of office hours? Are you also an officer or director of your employer?

The answers to these and other questions can affect who has rights to technology that a physician might invent or discover. If rights and ownership of technology are of concern, it should be explicitly addressed with your employer, ideally prior to executing your employment agreement.