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Physician’s Guide to Contracting with Hospitals and Other Facilities to Furnish Medical Services During the COVID-19 Pandemic

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Physician’s Guide to Contracting with Hospitals and Other Facilities to Furnish Medical Services During the COVID-19 Pandemic

This Guide is intended to provide physicians with guidance on contracting with hospitals or other facilities to furnish medical services during the COVID-19 pandemic.  This publication assumes that a physician is not already employed by or under contract to the hospital or facility.  Physicians may be needed to furnish services in conventionally licensed hospitals and other facilities, or in field hospitals or other facilities used as surge capacity.

This Guide may be of particular assistance to unlicensed physicians who have retired within the past five years and wish to volunteer their services.  A clarification statement issued by the Michigan Department of Licensing and Regulatory Affairs, Bureau of Professional Licensing, provides that an individual who was licensed in Michigan as health professional but has been retired for five or less years may be eligible to provide services and practice in his/her previously licensed profession to assist health care providers during the COVID-19 response and while the State of Emergency is in effect, without the need to submit a licensing application.  The statutory authority for this is MCL 333.16171(c), which provides that “[u]nder the circumstances and subject to the limitations stated in each case, the following individuals are not required to have a license issued under this article for practice of a health profession in Michigan: (c) An individual who by education, training, or experience substantially meets the requirements of this article for licensure while rendering medical care in a time of disaster or to an ill or injured individual at the scene of an emergency.”

Physicians may be needed to supplement the existing medical staff of a hospital or other facility or to staff field hospitals and other temporary facilities used as surge capacity.

There is no single way to document a physician’s relationship with a hospital or other facility in these circumstances.  Some hospitals and facilities may choose to document the affiliation through a letter which is not intended to qualify as a legally binding contract.  Others may choose to document the affiliation more formally through a traditional contractual agreement.  Regardless of the approach taken, physicians need to be aware of certain fundamental issues and whether the agreed upon terms with the hospital or other facility (hereinafter the “Health Care Facility”) are legally enforceable.  

I. PHYSICIAN’S OBLIGATIONS

  1. What services will the physician provide?  Treating patients with suspected or confirmed COVID-19 diagnoses?  Furnishing services to patients who are not suspected of having COVID-19?
  2. Is the Physician required to comply with any Health Care Facility policies, procedures, manuals, or medical staff bylaws which are set forth in documents separate from the agreement?   If so, has the Physician received and reviewed them together with any additional documents referred to in the agreement?
  3. Is the Physician required to provide services pursuant to a scheduled determined by the Health Care Facility? Are provisions made for time off?
  4. Are the procedures for patient referrals and/or prior authorizations clearly outlined in the agreement?                                        
  5. Does the Health Care Facility provide professional liability, commercial, and general liability insurance in an amount acceptable to Physician?  What are the limits of coverage?  Who is responsible to procure and maintain post-termination “tail” coverage?                      
  6. Does the agreement contain a hold harmless or indemnification clause? Note: Hold harmless or indemnification clauses are generally objectionable. Physicians should request professional liability carrier review of any hold harmless indemnification clause or any other clause that appears to place liability upon the physician. Most malpractice or professional liability policies will not cover liability assumed under contract.          
  7. Is the number of hours per week which the Physician is to devote listed and reasonable?                      
  8. Is a reasonable time frame in which to complete patient charts listed within the agreement, manual, or policy?           
  9. Is the standard of care, which the Physician will be held to, listed within the agreement, and is it reasonable? Note: A physician is only legally required to provide that same level of care that a reasonable medical professional under the same circumstances would provide.                          

II. BILLING REQUIREMENTS

  1. Are the billing requirements outlined in the agreement?                           
  2. Is a reasonable time frame for which complete billings are to be filed by Physician listed in the agreement, manual, policy, etc.?                                                                                  

III. COMPENSATION/REIMBURSEMENT

  1. Is the physician a volunteer?  If so, is the Physician entitled to receive any expense reimbursement or benefits?
  2. If the Physician is not a volunteer, what are the compensation and other benefits (e.g., health insurance, reimbursement of dues/CME, etc.) the Physician will receive?
  3. Is the amount of compensation and other benefits due to the Physician clearly listed in the agreement?                           

IV. TERMINATION

  1. Does the term of the agreement contain a definite expiration date?                          
  2. Can the Physician or Health Care Facility terminate the agreement without cause?
  3. Can the Physician or Health Care Facility terminate the agreement for cause? If so, are both the Physician and Health Care Facility subject to the same for cause termination requirements?                                                  
  4. How much notice must be provided to the other party prior to terminating the agreement without cause? For cause?                        
  5. Are the obligations of each party during the termination process and upon termination clearly outlined and reasonable?                                       
  6. Does the agreement clearly state who is responsible for notifying patients of Physician’s termination? Note: If patients are not properly notified, Physicians may be accused of abandonment. Be certain the agreement clearly provides for notification to patients of Physician’s termination.

V. MISCELLANEOUS PROVISIONS

  1. May amendments (i.e., modifications or repeal) be made only upon the mutual written consent of the Physician and the Health Care Facility?                             
  2. Is the agreement assignable, or may duties be delegated, with or without the consent of both parties?                                             
  3. Is the Health Care Facility and its representatives barred from interfering with a Physician’s exercise of professional judgment?
  4. Who is responsible to remit payroll and tax withholdings?  Note: If you are an independent contractor, you are required to remit payroll and tax withholdings. If you are an employee, the Health Care Facility is required to remit payroll and tax withholdings.

This publication is furnished for informational purposes only. It does not communicate legal advice by the Michigan State Medical Society or Kerr, Russell and Weber, PLC. Receipt of this publication does not establish an attorney/client relationship.         

© 2020 Michigan State Medical Society and Kerr, Russell and Weber, PLC.

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