U.S. Moves to Bar Noncompete Agreements in Labor Contracts

[DoctwoB]

Would love to hear any insight about this setup.

Why is it such a common structure? What does it do to the economics of billing/physician salary/benefits vs direct hospital employment? Are direct hospital employed set ups a thing?

Varies by state. In some states like Ca, direct physician employment by hospitals is illegal. Hence the medical group/hospital system model. In these settings the FTC regulation would definitely apply, as almost all medical groups are for profit entities as they are just groups of physicians providing services in exchange for $$$.

In general I think the medical group model is better then direct hospital employment and it comes down to leverage. If you are a solo doc negotiating with the hospital system, you are replicable and have little leverage. If the big medical group is negotiating a physician services contract with the hospital system, then its MAD. They need you, and you need them, meaning it is more likely to come to a reasonable agreement. Of course a lot comes down to the medical group in question (are they physician owned/run, are physicians equity holders or employees of said medical group, etc).

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[Med Director New England]

I would think so but they’ve always been banned in California for example and I’ve never thought of that as a particularly well paying area. Perhaps it would be even worse if they were allowed though.

I believe they’re also banned in Alabama and one of the Dakotas?

I’m about to be in the job market and had this bookmarked on the subject

https://faircompetitionlaw.com/wp-content/uploads/2021/06/Noncompetes-50-State-Survey-Chart-20210627.pdf

Non competes for MD are unenforceable in both MA and RI (and many other states too).

Many employers still have non competes written into contracts with MD in spite of this

 

[sirspamalot]

Many states will have carve outs, or limits if not expressly written then implied. The attachment posted previously was a nice summary.

 

[MD Financial Services Scott]

Their disability insurance is very reasonably priced

If anyone actually reads their policy, you might not say that. Read what it takes to get on claim, how to then stay on claim, how they can change the policy provisions, cancel the plan, rates go up every 5 years by 30-40%, and to get their best deal you have to buy/maintain a membership. If you also have employer provided coverage then read what is in their offset provisions, most likely you will see a line that states "group or franchise plans". What that means is that any employer provided coverage actually gets reduced dollar for dollar by any group or franchise plan benefits received. AMA is a group plan. What that means is IF you receive money from the AMA then your employer plan gets to reduce their payment by exactly the same amount that you received from the AMA plan. If that is the case, is it a good deal to buy something that replaces something else? This situation is not unique to AMA but rather it is true across all medical association plans.

 

[Mandelin Rain]

I think he's coming from the standpoint of being his own employer.

There's still a few of us holding out.

 

[MD Financial Services Scott]

I think he's coming from the standpoint of being his own employer.

There's still a few of us holding out.

I get it, that is a place you have to look from as well. The issues we continually see are that they have the phrase of you have to be "Totally AND Continually" disabled to become benefit eligible. Total is a big word as that means 100%, it does not mean something less than "Total". So, if one becomes disabled and unable to do part of their job then they are not "totally" disabled, thus not claim eligible. Think a procured based individual, if they can't do procedures but can still have clinic time then they are not totally disabled thus they cannot become eligible for benefit payout. The other word, Continuous, means that if you do become Totally disabled and are out for 70 days (just to pick a number), get told or decide to go back to work on a limited or light duty then that action alone breaks the "Continuous" so if you then say, gosh I am not ready yet to be back that is fine but now you have to start back at day zero. All individual and even most employer plans will have a clause which allows you an attempt to go back to work. Most employer group plans are 30 days of break from the "Continuous" clause to still be considered "continuous", most individual plans double the elimination period to collect the days you are considered disabled, thus 180 for the 90-day elimination period. In addition, most other contracts say a disabled day is one where you have at least 15 or 20% loss of income, 100% is not needed.

Here is the reality, no carrier can really sell a product so much less than another carrier because how would their morbidity be less than other carriers unless there are terms in the policy which prevent claim capacity thus improving that carrier's morbidity.

 

[sirspamalot]

I get it, that is a place you have to look from as well. The issues we continually see are that they have the phrase of you have to be "Totally AND Continually" disabled to become benefit eligible. Total is a big word as that means 100%, it does not mean something less than "Total". So, if one becomes disabled and unable to do part of their job then they are not "totally" disabled, thus not claim eligible. Think a procured based individual, if they can't do procedures but can still have clinic time then they are not totally disabled thus they cannot become eligible for benefit payout. The other word, Continuous, means that if you do become Totally disabled and are out for 70 days (just to pick a number), get told or decide to go back to work on a limited or light duty then that action alone breaks the "Continuous" so if you then say, gosh I am not ready yet to be back that is fine but now you have to start back at day zero. All individual and even most employer plans will have a clause which allows you an attempt to go back to work. Most employer group plans are 30 days of break from the "Continuous" clause to still be considered "continuous", most individual plans double the elimination period to collect the days you are considered disabled, thus 180 for the 90-day elimination period. In addition, most other contracts say a disabled day is one where you have at least 15 or 20% loss of income, 100% is not needed.

Here is the reality, no carrier can really sell a product so much less than another carrier because how would their morbidity be less than other carriers unless there are terms in the policy which prevent claim capacity thus improving that carrier's morbidity.

tl'dr

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