Hospital-Doctor Clawback Provisions in Employment Contracts

Hospital-Doctor Clawback Provisions in Employment Contracts

Polk & Associates CPA, Michigan CPA, Healthcare, Manufacturing, Real EstateIncreasingly, physicians is solo or small practices are giving up entrepreneurship in favor of becoming hospital employees. The first legal step, usually involves negotiating an entering into an employment agreement with the hospital.

One of the more significant provisions in a hospital/physician employment agreement is the treatment of “clawbacks,” or recoupment of moneys paid by an insurance company.  Typically, there will be two agreements, one between the physician and insurance companies, which existed prior to the contemplated hospital employment. The second will be between the hospital and the various insurance companies. These two agreements will always call for a clawback in the event payments need to be reversed for some reason such as medical necessity, or a coding discrepancy. Either the provider can write a check or have the money deducted from further payments.

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