The 10 Biggest Legal Mistakes Physicians Make When Dealing with Practice Support Agreements

By Roger N. Morris, Esq., and Jay M. Johnson, Esq.


Executive Summary

New physicians looking to start their practice face many challenges. The need to earn a living and the desire to pay off loans require more than just the ability to diagnose and treat patients. There is a business side to the practice that commands attention, and the first business decisions that most physicians make involve deciding where to work and for whom. Established practitioners also face career decisions. Many hospitals in medically underserved areas can make offers to new and established physicians that sound tempting on the surface. Indeed, recruitment offers include such practice support as collections guarantees, payment of student loans, the arrangement of employment with a local practice group, and other perks. With any such offer, strings are attached. Given the nature of these practice support agreements and the laws affecting recruitment arrangements, it is important for new physicians to understand their agreements and the legal constraints relating to them. Certainly, making mistakes with practice service agreements can have serious long-term effects on a physician’s career and finances.


Mistake 1        Failing to Involve Legal Counsel

Mistake 2        Failing to Research Each Potential Employer

Mistake 3        Failing to Grasp the Ramifications of Certain Commitments

Mistake 4        Accepting Boilerplate Language in Contracts

Mistake 5        Being Fearful of Negotiation

Mistake 6        Failing to Negotiate the Details

Mistake 7        Failing to Understand Antikickback Constraints

Mistake 8        Failing to Understand Stark Law Constraints

Mistake 9        Failing to Understand the Stark Law’s Effect on Joining a Group Practice

Mistake 10      Failing to Understand IRS Constraints on Benefits

The above has been excerpted from the SEAK text, The Biggest Legal Mistakes Physicians Make and How To Avoid Them.