Penalty for breaking attending contract?

[Socrates25]

OK so I signed up for a year long stint and its obvious there's a ton of stuff they didnt tell me about during the interview process that they are now doing that I dont agree with. The main thing is that they want everything billed at a certain level, even though in many cases I dont feel it should be billed that way. I'm not going to chance an insurance audit and a criminal charge of billing fraud.

I could stick with this job until the end of the contract and then move on, but I looked closely at the contract and there is no listed penalty for me just quitting and walking away. There is no clause for early termination of the agreement, the only stipulation is that you have to give 30 days notice at the 1 year renewal mark if you choose not to stay on.

Obviously I'm going to consult an attorney, but I was just curious if anyone else had dealt with this before. If there is no listed penalty for quitting early then I dont see how they can come after me. It seems unlikely to me that a court would really say "you are hereby ordered to return to work to finish the duration of the contract." I guess the court could come up with an arbitrary monetary penalty for me quitting early, but if they do so it will have no basis in the contract.

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[tartesos]

OK so I signed up for a year long stint and its obvious there's a ton of stuff they didnt tell me about during the interview process that they are now doing that I dont agree with. The main thing is that they want everything billed at a certain level, even though in many cases I dont feel it should be billed that way. I'm not going to chance an insurance audit and a criminal charge of billing fraud.

I could stick with this job until the end of the contract and then move on, but I looked closely at the contract and there is no listed penalty for me just quitting and walking away. There is no clause for early termination of the agreement, the only stipulation is that you have to give 30 days notice at the 1 year renewal mark if you choose not to stay on.

Obviously I'm going to consult an attorney, but I was just curious if anyone else had dealt with this before. If there is no listed penalty for quitting early then I dont see how they can come after me. It seems unlikely to me that a court would really say "you are hereby ordered to return to work to finish the duration of the contract." I guess the court could come up with an arbitrary monetary penalty for me quitting early, but if they do so it will have no basis in the contract.

agree with the lawyer bro... lawyer up!
as far as billing goes, they cant make you bill at any level, it is a matter of your discretion and your work only... they will always suggest billing at level 2-3 or higher, i bill at level 1 and 2 in most cases.
They will never document any disciplinary action for you not billing higher, because it would be forcing you to do a crime( and you and only you would pay for it)... now, if your work was documented/consistent with a higher billing/acuity and you under billed, they can make you aware of that and you can change it, but that`s not in all cases.

in General, it looks bad to leave a job before a year( 2 years some might say) unless you move out of town for some reason.

Good luck man!

 

[cabinbuilder]

Heck, if you feel like you need to get out of there, consult your lawyer and write your letter of resignation after you find out what the penalties are/aren't. Make sure you find out about tail coverage and if you are expected to pay for that if you leave early.

I have resigned from 3 "real" jobs in the last 3 years. Was asked to leave the 4th because the hospital couldn't afford to pay me. This is why I do locums now so I don't have any more issues as I seem to have bad luck with the permanent side of the job market. Always consult your lawyer and let them deal with the negotiation of your leaving especially if its under duress.

Sometimes you just have to cut your losses.

 

[Law2Doc]

OK so I signed up for a year long stint and its obvious there's a ton of stuff they didnt tell me about during the interview process that they are now doing that I dont agree with. The main thing is that they want everything billed at a certain level, even though in many cases I dont feel it should be billed that way. I'm not going to chance an insurance audit and a criminal charge of billing fraud.

I could stick with this job until the end of the contract and then move on, but I looked closely at the contract and there is no listed penalty for me just quitting and walking away. There is no clause for early termination of the agreement, the only stipulation is that you have to give 30 days notice at the 1 year renewal mark if you choose not to stay on.

Obviously I'm going to consult an attorney, but I was just curious if anyone else had dealt with this before. If there is no listed penalty for quitting early then I dont see how they can come after me. It seems unlikely to me that a court would really say "you are hereby ordered to return to work to finish the duration of the contract." I guess the court could come up with an arbitrary monetary penalty for me quitting early, but if they do so it will have no basis in the contract.

I think you probably shouldn't even try to interpret a contract like this on your own. It's rare for there not to be a notice provision in a contract, and in it's absence there might be one by statute. No court is going to order you to finish out a contract, (this country frowns on indentured servitude) but they certainly would order you to pay all the reasonable damages incurred. And that won't be an "arbitrary monetary penalty", it will be the amount necessary to put the other party back to the same position they would be in had you not quit. Meaning if you sign on for a year, leave abruptly, and it costs them $X of people's time interviewing and $Y of overtime/moonlighting for folks to cover your remaining shifts, or until a new suitable person is found (which could be many months), and $Z for additional malpractice coverage for adding a new person, and $W for costs of training a new person to do your job, etc., you will be on the hook for that. Whatever they can show a judge was their reasonable expenses you will end up eating. This is basic contract law unless you negotiate other terms to handle quitting, like unless the contract says either party can terminate at will without penalty. So yes, a contract has teeth and you need a lawyer.

 

[Socrates25]

I already have a meeting with an attorney next week to discuss this. We'll see what happens.

I noticed a couple of potential loopholes -- the contract says they shall provide an EMR within 3 months of employment and they havent got that done yet. I can argue they broke the contract before I did.

 

[docB]

Agree with L2D. One other possible source of cost is headhunter fees. If they paid a head hunter to find you they may want you to pay that. Or they may penalize the headhunter. It depends what their contract with the headhunter is. All of this should be clearly spelled out in the contract.

 

[Socrates25]

Agree with L2D. One other possible source of cost is headhunter fees. If they paid a head hunter to find you they may want you to pay that. Or they may penalize the headhunter. It depends what their contract with the headhunter is. All of this should be clearly spelled out in the contract.

I have double and triple checked it, this stuff is definitely NOT spelled out in the contract. The contract says nothing about early termination, nothing about penalty fees, nothing about paying a headhunter fee, nothing about tail coverage, nothing about giving notice, etc.

 

[docB]

So it's good that you have a lawyer and as L2D mentioned there may be some statutory requirements in your state to consider. But if it's not in the contract you can't be in violation of it, i.e. if it's not spelled out that you must do this and that then it would be difficult to breach.

As for the tail coverage it's not surprising that's not in the contract. What will be in the contract is what kind of med mal coverage you get while working for them (which could be none and you buy it yourself or they provide it). If you are provided with claims made insurance then you have to buy a tail. If it's occurance then you don't. You are correct that that the contract won't specifically tell you you have to buy a tail (unless it says they will buy one for you).

 

[Socrates25]

So it's good that you have a lawyer and as L2D mentioned there may be some statutory requirements in your state to consider. But if it's not in the contract you can't be in violation of it, i.e. if it's not spelled out that you must do this and that then it would be difficult to breach.

As for the tail coverage it's not surprising that's not in the contract. What will be in the contract is what kind of med mal coverage you get while working for them (which could be none and you buy it yourself or they provide it). If you are provided with claims made insurance then you have to buy a tail. If it's occurance then you don't. You are correct that that the contract won't specifically tell you you have to buy a tail (unless it says they will buy one for you).

I have my own malpractice coverage policy (claims made policy), they just pay the premiums while I'm employed with them but I would pay the premiums on my own once I leave the practice.

 

[3dtp]

This might be a good time to review other aspects of contracts that frequently show up:
1. Restrictive Covenants
2. Buy in/Buy out clauses

Your contract may have a restrictive covenant that does not permit you to work within a set distance of your present group. These can be bad news and some of them in some states are enforceable. Unscrupulous groups can and will use these to their advantage.

Example: One contract contained a "red line" clause that said you couldn't work within 50 miles of any location that they had established or might establish at the time of resignation. I plotted these out on a map of the state and found that it covered 60% of the state. The clause was for 3 years.

My first thought was no problem, no court in the state would ever permit such a clause to be enforced, better for me since if I did want to leave, an overreaching restraint of trade clause would work to my favor if he decided to press it.

Then I noticed the second clause, the "blue line" clause, which stated if any court ruled the "red line" clause too broad in any way, the owner was free to redraw the contract to meet the court's objections and the revised "red line" clause would be binding. Thus insuring litigation ad nauseum if you ever decided to leave the practice and remain in the state. And he had deeper pockets than I.

Other aspects of the contract read like a list of things you should never accept. He had a partnership clause that left him as sole arbiter of when you would become a partner but boasted that it had no buy in. I talked to his "partner" who told me he'd been working for him for 15 years and wasn't a partner.

Be aware of other clauses in your contracts besides the termination clauses that may rise up and bite you as well. Needless to say, I found greener pastures elsewhere.

 

[Winged Scapula]

they will always suggest billing at level 2-3 or higher, i bill at level 1 and 2 in most cases.

Somewhat off-topic, but if you're consistently billing Level 1 (physician not present) and Level 2, you *are* under coding in almost every instance.

Code 99211 is defined as follows: “Office or other outpatient visit for the evaluation and management of an established patient, that may not require the presence of a physician. Usually, the presenting problem(s) are minimal. Typically, five minutes are spent performing or supervising these services.” This is a low-level Evaluation and Management (E/M) service for things like a BP check, or prescription refills.

It doesn't take much work to get yourself legitimately to Level 3 and higher but hey...if you don't mind leaving thousands of dollars yearly on the table for your under coding, that's your perogative.

 

[Law2Doc]

I have double and triple checked it, this stuff is definitely NOT spelled out in the contract. The contract says nothing about early termination, nothing about penalty fees, nothing about paying a headhunter fee, nothing about tail coverage, nothing about giving notice, etc.

It's spelled out under basic contract law -- it doesn't have to be in the contract. In fact this stuff kicks in because it's not spelled out in the contact, so the law tries to make the parties whole. This is why you need a lawyer -- you are starting from the absolutely wrong premise. Unless the contract says you can terminate unilaterally at will without penalty, you are likely going to have to pay the reasonable damages involved in replacing you. So it's what the contract doesn't say that will burn you.

 

[Socrates25]

It's spelled out under basic contract law -- it doesn't have to be in the contract. In fact this stuff kicks in because it's not spelled out in the contact, so the law tries to make the parties whole. This is why you need a lawyer -- you are starting from the absolutely wrong premise. Unless the contract says you can terminate unilaterally at will without penalty, you are likely going to have to pay the reasonable damages involved in replacing you. So it's what the contract doesn't say that will burn you.

The contract doesnt say anything about dress standards either, so does that mean I can show up every day in a t-shirt and shorts, or is that also covered by "basic contract law" that I cant do that?

 

[Socrates25]

Somewhat off-topic, but if you're consistently billing Level 1 (physician not present) and Level 2, you *are* under coding in almost every instance.

Code 99211 is defined as follows: “Office or other outpatient visit for the evaluation and management of an established patient, that may not require the presence of a physician. Usually, the presenting problem(s) are minimal. Typically, five minutes are spent performing or supervising these services.” This is a low-level Evaluation and Management (E/M) service for things like a BP check, or prescription refills.

It doesn't take much work to get yourself legitimately to Level 3 and higher but hey...if you don't mind leaving thousands of dollars yearly on the table for your under coding, that's your perogative.

As an employee I dont give a damn about under coding. I get paid the same regardless. If I was running my own practice I'd certainly care more about it. I never bill level 1s, but I probably bill 90% of what I do at a level 2.

From an employee perspective, it is much safer to underbill and take no chances rather than overbill and risk an audit or charges of insurance fraud. Insurance companies have wide leeway to kick you out of their panel even without surefire proof of fraud. And when that happens, it follows you for life because every credentialing application asks if you have ever been terminated from an insurance panel.

 

[Socrates25]

This might be a good time to review other aspects of contracts that frequently show up:
1. Restrictive Covenants
2. Buy in/Buy out clauses

Your contract may have a restrictive covenant that does not permit you to work within a set distance of your present group. These can be bad news and some of them in some states are enforceable. Unscrupulous groups can and will use these to their advantage.

Example: One contract contained a "red line" clause that said you couldn't work within 50 miles of any location that they had established or might establish at the time of resignation. I plotted these out on a map of the state and found that it covered 60% of the state. The clause was for 3 years.

My first thought was no problem, no court in the state would ever permit such a clause to be enforced, better for me since if I did want to leave, an overreaching restraint of trade clause would work to my favor if he decided to press it.

Then I noticed the second clause, the "blue line" clause, which stated if any court ruled the "red line" clause too broad in any way, the owner was free to redraw the contract to meet the court's objections and the revised "red line" clause would be binding. Thus insuring litigation ad nauseum if you ever decided to leave the practice and remain in the state. And he had deeper pockets than I.

Other aspects of the contract read like a list of things you should never accept. He had a partnership clause that left him as sole arbiter of when you would become a partner but boasted that it had no buy in. I talked to his "partner" who told me he'd been working for him for 15 years and wasn't a partner.

Be aware of other clauses in your contracts besides the termination clauses that may rise up and bite you as well. Needless to say, I found greener pastures elsewhere.

Good word of warning about the non-compete clauses. Fortunately my contract has a pretty weak non-compete clause, it just says I cant work within a 5 mile radius of the current clinic building. Thats fine to me, I'm only here for a year at most and then I'm moving to the other side of the country with absolutely no intent to ever return to this city.

 

[Law2Doc]

The contract doesnt say anything about dress standards either, so does that mean I can show up every day in a t-shirt and shorts, or is that also covered by "basic contract law" that I cant do that?

Um no, but there are many things you can't do that aren't spelled out, nor need to be. The contract is a document that adds terms to an existing legal landscape. It's not the whole picture. You comments above reflect exactly the kind of person that needs a lawyer.

 

[NotAProgDirector]

As an employee I dont give a damn about under coding. I get paid the same regardless. If I was running my own practice I'd certainly care more about it. I never bill level 1s, but I probably bill 90% of what I do at a level 2.

From an employee perspective, it is much safer to underbill and take no chances rather than overbill and risk an audit or charges of insurance fraud. Insurance companies have wide leeway to kick you out of their panel even without surefire proof of fraud. And when that happens, it follows you for life because every credentialing application asks if you have ever been terminated from an insurance panel.

I had assumed that you were working as an inpatient doc, billing level 1's and 2's (out of 1 to 3). If you're billing outpatient codes at 1 and 2, you are way underbilling.

And that is medicare fraud. You can be led just as liable as for overbilling. Remember that patients are responsible for part of their bills, so sometimes physicians will underbill so that the patient doesn't have to pay as much. That's illegal, and the fines are identical for overbilling. And, it's simply wrong -- you should bill for what you do, and on the outpatient side of things most every visit will be a level 3 or 4, with some 5's and a few 2's. You should NEVER bill a level 1.

And, you're crazy if you "don't care" about it because you're an "employee". Perhaps you want out of this arrangement, but I can guarantee you that your employer, and every other employer out there, will fire you for billing like this.

 

[Socrates25]

I had assumed that you were working as an inpatient doc, billing level 1's and 2's (out of 1 to 3). If you're billing outpatient codes at 1 and 2, you are way underbilling.

And that is medicare fraud. You can be led just as liable as for overbilling. Remember that patients are responsible for part of their bills, so sometimes physicians will underbill so that the patient doesn't have to pay as much. That's illegal, and the fines are identical for overbilling. And, it's simply wrong -- you should bill for what you do, and on the outpatient side of things most every visit will be a level 3 or 4, with some 5's and a few 2's. You should NEVER bill a level 1.

And, you're crazy if you "don't care" about it because you're an "employee". Perhaps you want out of this arrangement, but I can guarantee you that your employer, and every other employer out there, will fire you for billing like this.

Well I already said I never bill a level 1.

Secondly, while its true that undercoding can be prosecuted, it's the difference between getting prosecuted for going 10 miles under the speed limit vs 10 miles over. The studies listed below* showed that undercoding was 3 times more likely than upcoding, yet I would lay significant odds that fraud prosecutions for overbilling at are least 100 times more likely than fraud prosecutions for underbilling.

Insurance carriers and Medicare arent likely to go after undercoders unless:

1) They can show that you are selective in your undercoding (i.e. you undercode patients who have insurance A, but you code everybody else normally)

2) They believe that your undercoding has caused patients to seek "extra" services that they otherwise would not have procured, thus causing elevated costs in the long term.

Interesting point about being fired for underbilling, maybe I can use that to my advantage and force them to fire me. Of course, I'm sure the dreaded "basic contract law" that is not written in the contract that I signed says that if I get terminated with or without cause I still have to pay damages because god forbid they will have to find somebody else to work my position after they fire me.



*Rudman, W.J. (1998) “Implementation of Outcomes Measures and Statistical Process Control Methodologies in Quality Assurance and Utilization Review Efforts within Health Information Management Departments,” Topics in Health Information Management (18/3): 1-7.

*Rudman, W.J. and Hewitt, C. (November 2000) “Use of Statistical Analysis in Assessing Appropriate Documentation and Coding” Topics in Health Information Management (21,2):

 

[Winged Scapula]

As an employee I dont give a damn about under coding. I get paid the same regardless. If I was running my own practice I'd certainly care more about it. I never bill level 1s, but I probably bill 90% of what I do at a level 2.

From an employee perspective, it is much safer to underbill and take no chances rather than overbill and risk an audit or charges of insurance fraud. Insurance companies have wide leeway to kick you out of their panel even without surefire proof of fraud. And when that happens, it follows you for life because every credentialing application asks if you have ever been terminated from an insurance panel.

I had assumed that you were working as an inpatient doc, billing level 1's and 2's (out of 1 to 3). If you're billing outpatient codes at 1 and 2, you are way underbilling.

And that is medicare fraud. You can be led just as liable as for overbilling. Remember that patients are responsible for part of their bills, so sometimes physicians will underbill so that the patient doesn't have to pay as much. That's illegal, and the fines are identical for overbilling. And, it's simply wrong -- you should bill for what you do, and on the outpatient side of things most every visit will be a level 3 or 4, with some 5's and a few 2's. You should NEVER bill a level 1.

And, you're crazy if you "don't care" about it because you're an "employee". Perhaps you want out of this arrangement, but I can guarantee you that your employer, and every other employer out there, will fire you for billing like this.

Totally agree with what aPD has written. Chart audits are becoming increasingly common and the OP would be well advised to know that under coding is just as much of a problem. In the words of CMS, "because patient encounters vary in complexity, health insurers expect that coding for such encounters will also vary. Physicians with high usage patterns of a single level of complexity may be more likely to be audited."

Thus if you are coding "90% of visits as a level 2" (which only accounts for 4.4% of CMS outpatient visits for Internal Medicine), then you not showing the complexity and variability with patient presentation that insurers expect, hence, putting yourself at risk for being audited.

Chart Auditing does not generally result in a fraud investigation. If you document what you do, there should be no disciplinary action against you or at most, a refund of small amounts which "they" have decided you have been overpaid.

But BTW Socrates25, you'll note I was responding to user tartesos who stated that he/she billed Level 1 and 2 all of the time. I didn't recall seeing you actually discuss specifics of what you were being asked to bill.

 

[tartesos]

Somewhat off-topic, but if you're consistently billing Level 1 (physician not present) and Level 2, you *are* under coding in almost every instance.

Code 99211 is defined as follows: "Office or other outpatient visit for the evaluation and management of an established patient, that may not require the presence of a physician. Usually, the presenting problem(s) are minimal. Typically, five minutes are spent performing or supervising these services." This is a low-level Evaluation and Management (E/M) service for things like a BP check, or prescription refills.

It doesn't take much work to get yourself legitimately to Level 3 and higher but hey...if you don't mind leaving thousands of dollars yearly on the table for your under coding, that's your perogative.

Good points you and a prog director state.
Im doing my fellowship and moonlight as Hospitalist occasionally( necessary evil).
Busy place, and when I bill low, is because it's a bs consultation from gyn( just so you guys are aware patient is here, since Gyn doctors are not In house.).

In other off topic, does any one know why the hell billing and coding is not taught in residency/ fellowship?
This stuff is still a puzzle to me to be honest. And no 45 mins lecture once a year can teach you squat.
In my fellowship they are a little better at it, but you have to get it out of the
( specially the old docs, the younger staff might be as clueless as I am. )

There are a lot of stuff on how you write your ros for them to bill. Pmhx, social history and that's something I'm grasping now.

Oh boy!!
Way off topic huh!?!?

 

[smq123]

Good points you and a prog director state.
Im doing my fellowship and moonlight as Hospitalist occasionally( necessary evil).
Busy place, and when I bill low, is because it's a bs consultation from gyn( just so you guys are aware patient is here, since Gyn doctors are not In house.).

In other off topic, does any one know why the hell billing and coding is not taught in residency/ fellowship?
This stuff is still a puzzle to me to be honest. And no 45 mins lecture once a year can teach you squat.
In my fellowship they are a little better at it, but you have to get it out of the
( specially the old docs, the younger staff might be as clueless as I am. )

There are a lot of stuff on how you write your ros for them to bill. Pmhx, social history and that's something I'm grasping now.

Oh boy!!
Way off topic huh!?!?

It depends on the specialty and on the residency program. In my Family Med program, where residents ran the clinic and saw the vast majority of patients that were seen on any given day, we were given multiple lectures on billing and Medicare rules during all 3 years. You billed each patient as you saw them and occasionally ran billing questions by the clinic attending if you weren't sure if it were a level 3 or 4. As we switched to an EMR, we discussed billing even more in depth.

 

[link2swim06]

Um no, but there are many things you can't do that aren't spelled out, nor need to be. The contract is a document that adds terms to an existing legal landscape. It's not the whole picture. You comments above reflect exactly the kind of person that needs a lawyer.

Dude...chill out. He is obviously joking.

 

[gutonc]

Dude...chill out. He is obviously joking.

Nah...not joking...trolling...that's how he (Socrates25) rolls.