Review notice provision in your physician agreements

Many agreements provide that if a physician elects to leave the group they must provide certain notice to the group. This notice requirement applies in the event of retirement or simply a voluntary termination and serves to provide the practice with adequate time to recruit another physician. Quite often a practice does not impute any penalty to a physician who fails to provide adequate notice. Without such corresponding penalty the notice provision it likely to have no real affect. If a group requires that a doctor provide 1 year’s notice prior to retirement, for instance, what penalty, if any, will that doctor incur if he gives only 30 days notice? One method of addressing this is via a prorated penalty for each month that the doctor was to have provided notice but didn’t. For instance, if a physician is to provide 180 days notice of his desire to voluntarily terminate his employment or retire but provides only 90 days, then he will receive only 50% of the amount otherwise due him under the practice agreements.

About the Author

Reed Tinsley CPA

This article is written by Reed Tinsley, a Houston, TX-based CPA with over 30 years of experience advising physicians and medical practices across Texas and the United States. Reed holds certifications as a Certified Valuation Analyst (CVA), Certified Healthcare Business Consultant (CHBC), and Certified Financial Planner (CFP), specializing exclusively in the healthcare sector. He is a published author, nationally recognized speaker, and trusted advisor to physicians on accounting & tax, practice management, and financial planning. Schedule a Free Consultation.