As medical practitioners, we are asked to sign lengthy contracts to provide professional services for a facility or private practice. These contracts, known as “Professional Services Agreements,” or PSA, define the relationship between practitioners and the facility. The PSA includes the terms and conditions of such a relationship. We are taught to negotiate with the facility for everything we want to provide services. Once we negotiate, we need both parties to sign a PSA with the agreed-upon terms. Negotiations are a give-and-take, back-and-forth where each party will argue for what benefits them. When contracting directly for locums-type work, it is best to agree to mutually beneficial terms for both parties.
Sometimes, a facility will agree to all your terms (i.e., number of shifts, compensation rate, benefits, etc.). In that case, sign the deal! But in many cases, a practitioner must consider the items most important to them and what items they are willing to concede in negotiations. All practitioners should know their “minimums” for accepting a deal and what items are absolute deal breakers. Negotiating a deal is an art, done differently by all people. There is no right or wrong way to negotiate. You might be someone that announces to the other party which items you will not cave on and which ones you have some flexibility. On the other hand, you might inform the facility of precisely what you are looking for and request that the other party meet your demands.
This article discusses the art of renegotiating a signed agreement with a facility when contracting directly for locums-type work. This is not to suggest that practitioners sign an agreement, then turn around and attempt to renegotiate with the facility. That would not be a wise negotiating tactic. You should never agree to a PSA that you don’t feel comfortable with or exposes you to greater legal risk than what is tolerable. Instead, we suggest that practitioners evaluate which of their demands must be met at initial negotiations and if all demands are not met, which items they might consider renegotiating in the future.
Each practitioner must set their minimums and deal breakers in their initial negotiations with a facility to contract directly. This is a list of those items a practitioner may not want to be flexible with or wait to renegotiate after a signed agreement.
Minimums and Deal Breakers:
Compensation. When negotiating, set a minimum compensation rate to provide your services. You can either make it known that is your minimum or attempt to negotiate above it or toward it. This minimum compensation rate may change depending on your negotiating leverage, your desire to work at that facility, and what other opportunities are available to you.
Indemnification Provision. Consider it a deal breaker if an indemnification clause in the PSA is unfair to you. You may attempt to remove or edit these clauses in a PSA. Do not agree to a PSA that has a poorly written indemnification provision.
Malpractice Insurance Clause. Consider it a deal breaker if the PSA has language where the practitioner waives their right to fight a malpractice suit against them.
W2 vs. 1099 Agreement. You may consider it a deal breaker if the facility refuses to hire you as a W2 or 1099. In that case, let it be known to the facility early in the process that your employment status will be a deal breaker.
Non-competes. Excessive non-competes should be removed from the PSA or edited. Non-competes are not legal or deemed to be reasonable in some states.
Outside Activities. A practitioner should maintain their rights to any activities outside their clinical duties that do not interfere with their clinical duties. Clauses in the PSA that remove the practitioner’s rights to work performed outside scheduled hours are unfair and should be edited or removed.
When negotiating for the first time with a facility, it is essential to know which items you are flexible about and which you are not. You may add more deal breakers to the list above, as you may not want to be open to everything else. Deal breakers keep you from making a deal, but everything else, you should remain flexible or open to. You might have greater negotiating power after working at a facility for some time, and they have grown to like you. If they like you, they are more likely to agree to your demands in the future.
You can work to negotiate for the items below at your initial negotiations, but don’t forget that you can attempt to renegotiate for these items in the future. For some of these items, you might not have to worry about renegotiating as the facility may be able to provide them upon request, even if the PSA does not include such language. We provide a list of items that should be negotiated for when signing a PSA, but if the facility does not agree to them, don’t be afraid to ask for it down the road. An addendum can be applied to the PSA, or the facility can decide to handle the issue without altering the PSA.
Compensation Rates. If the facility likes you, they might be willing to pay you more. Don’t be afraid to ask for more money. Ensure that your PSA does not have an unreasonable time frame that you must wait before renegotiating your compensation rates.
Reimbursement for Malpractice Insurance. If you are asked to pay for your own malpractice policy, don’t be afraid to ask for reimbursement for the active policy or tail in the future.
Reimbursement for Medical License and DEA. You can certainly negotiate for reimbursement of these items in your PSA, but if the facility refuses, then don’t be afraid to circle back to the facility later to see if they would be willing to pay for them.
Reimbursement for CME and Life Support Certifications. Many facilities will not include reimbursement for these items in their PSA. These items are usually not worth fighting for if the facility does not want to reimburse them. On the other hand, when the time comes, and you need CME or a BLS/ACLS certification, don’t be afraid to ask for reimbursement.
Convert from 1099 Independent Contractor to W2 employee or vice-versa. Your setup may change, and you might be looking for a new arrangement. Don’t be afraid to attempt to convert the gig from a 1099 to a W2 or vice versa.
Legal professionals teach us that everything must be in the PSA; otherwise, it does not exist. This is true, but realize that not all items should be deal breakers. Don’t let a good opportunity go because the facility refuses to agree to all your demands. Recognize what items are deal breakers and which are worth negotiating for. Not all items are worth negotiating for as you want to focus your efforts on getting the items that are most important to you. Renegotiating in the future or asking for items not included in the PSA is a viable option for all to consider during initial negotiations.