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Private Practice Disaster! Please help!

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  • Private Practice Disaster! Please help!

    I am with a small startup practice. I joined about a year or so after a solo guy opened the practice. After about a year and a half, the practice is not doing too well. In a little under a year, I'm in the red between $200-300K and counting with regards to my expenses-vs-collections. I'm now wanting to leave the practice for a myriad of reasons. I am not a partner yet, still just an employee. But the owner is claiming that if I leave without turning a profit, I owe that $200-300K to the practice. There is nothing in the contract that states this and I do not believe it is standard practice although I guess I'm not entirely sure. Who is right here? The owner says that the practice will come after me for the money. What do I do about this situation?

  • #2
    Talk to a lawyer yesterday

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    • #3
      Lawyer up. It would be highly unusual to have something like that in a contract for an employed doc but I wouldn't put it past some people to try to slip it in. The owner is probably trying to scare you but a letter from a lawyer that shows you mean business can clear things up pretty quickly.

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      • #4
        The attorney will need to see how you are paid and how it is reported. The contract can say one thing and the actual practice another.

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        • #5
          When I was looking for job , there was an employed position like this . They would pay me
          a certain salary ( say 200), if I make 100 that year , I owe them some years ( can’t remember the details ), but it was clearly in the offer letter

          next Day , I called them and told them I am
          not coming

          Even if it’s not written in your contract, still spend some money on a good contract attorney to review it , ( don’t spend money on other people who claim to review contract , but are not attorneys ), you will have peace of mind

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          • #6
            Originally posted by Craigslist View Post
            Talk to a lawyer yesterday
            This

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            • #7
              I agree with above, the cost for an experienced attorney in physician contracts to review your legal documents for this position is a must. Please get counsel.

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              • #8
                Seems a bit insane on just first pass, especially if you're an employee and not part of the material decision making that contribute to those costs.

                Some contracts can be funny but that is your first guide, and agree, lawyer yesterday. I'd give the required notice too, this person is toxic, make sure its perfectly by the contract ofc, and maybe also discuss that first with lawyer to make sure its right.

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                • #9
                  Originally posted by Zaphod View Post
                  Seems a bit insane on just first pass, especially if you're an employee and not part of the material decision making that contribute to those costs.

                  Some contracts can be funny but that is your first guide, and agree, lawyer yesterday. I'd give the required notice too, this person is toxic, make sure its perfectly by the contract ofc, and maybe also discuss that first with lawyer to make sure its right.
                  Just a bit? Wow never heard of this sort of contract for an employee.
                  OP what does your contract say?

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                  • #10
                    Originally posted by Jokdoc View Post
                    I'm in the red between $200-300K and counting with regards to my expenses-vs-collections. ... I am not a partner yet, still just an employee.
                    I'm curious... ^^^ why how?
                    $1 saved = >$1 earned. ✓

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                    • #11
                      Wasn’t there just some poster the other day asking for examples of private practice not working out? To OP, agree with other posts—find a good health care attorney who has experience with contracts and payment structures. How much access do you have to the financial records? Could your boss be fudging the numbers to your detriment? Lots of details missing here, perhaps intentionally, but you need a lawyer as others have said.

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                      • #12
                        Originally posted by MaxPower View Post
                        Wasn’t there just some poster the other day asking for examples of private practice not working out? To OP, agree with other posts—find a good health care attorney who has experience with contracts and payment structures. How much access do you have to the financial records? Could your boss be fudging the numbers to your detriment? Lots of details missing here, perhaps intentionally, but you need a lawyer as others have said.

                        Thanks all for the replies. To answer your questions:

                        I indeed hired a lawyer before signing and definitely would not have signed if I saw anything like this in the contract.

                        Well with overhead at about $20K per month, covering things like staff, rent, etc, the expenses rack up quickly. The percentage actually collected from billing for services rendered is extremely low as well. I, as an employee, of course had no say in the expenses and due to extremely poor bookkeeping had no idea they were this high until after over a year with the practice.

                        I absolutely believe that the numbers are being fudged. The owner, also a physician, has about 80-90% of the total patient volume and I believe that I am being saddled with a disproportionate share of the overhead. I do not trust that the financial records are accurate. I do not believe that the owner is acting in good faith which is just one of several reasons I intend to leave. I believe that the owner is doing this because the practice is suffering.

                        But I am of the mind that, regardless of what proportion of overhead is allocated to me, I am not partner and so am not responsible for any losses incurred nor will I benefit from any dividends. If I quit, I walk away clean with no liabilities, just the same way a nurse, secretary or any other employee would.

                        There is nothing in my contract that states that I owe any outstanding overhead expenses upon termination. In fact it expressly states that upon termination there are no further obligations each party has to the other except for obligations accrued during the term of the contract and obligations that the contract expressly states are to extend beyond the term of the contract. The only accruing obligations outlined in the contract are salary/compensation from employer to physician-employee and reimbursements from services rendered by physician-employee to Employer. Nowhere does it say that physician-employee owes employer any unmet overhead. This is a loss to the practice, and I, as an employee, am not responsible for the loss.
                        Last edited by Jokdoc; 02-12-2022, 10:47 AM.

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                        • #13
                          The only other thing I can think of is if he claims to have overpaid you if eg you were entitled to net pay but he bumped it up. Either way though staying isn't going to improve your financial situation if you continue to lose money for several more months/years.

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                          • #14
                            This might be a dumb question from someone that was employed, but why would you be on the hook for paying overhead when you're an employee and not a partner in the business? Especially when you have no say in how the money gets spent in the practice.

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                            • #15
                              Originally posted by Jokdoc View Post


                              The only accruing obligations outlined in the contract are salary/compensation from employer to physician-employee and reimbursements from services rendered physician-employee to Employer. Nowhere does it say that physician-employee owes employer any unpaid overhead. This is a loss to the practice, and I, as an employee, am not responsible for the loss.
                              What is meant by reimbursement from services rendered employee to employer? Is that the actual language of the contract? Are said services specified anywhere in the contract?

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