Berry Moorman

David Foy Gives Presentation to Detroit Area Ophthalmology Residents

David Foy Gives Presentation to Detroit Area Ophthalmology Residents

David Foy Gives Presentation to Detroit Area Ophthalmology Residents

On March 24, 2014 David Foy made a presentation “Anatomy of an Employment Contract” to Detroit Area Ophthalmology residents from Beaumont Health System, Henry Ford Health System, and Kresge Eye Institute.  A copy of Mr. Foy’s Pre-Employment Due Diligence and Pre-Purchase Due Diligence Checklists may be found here.

PRE-EMPLOYMENT DUE DILIGENCE:

  1. Preliminary Considerations
  • Google the Practice and Doctors or Dentists – 4 Star review * * * *
  • Review State of Michigan License Lookup for issues
  • Ask colleagues about the reputation of the Practice and Staff
  • Staff retention/turnover
  • Patient census
  • Location, location, location
  • Growing Practice or winding down
  • Is this a stepping stone or are you looking for a home?
  1. Contracts/Legal Documents
  2. Employment Agreement – Key Terms.
  3. Term of Agreement – “for cause” versus at-will.
  4. Compensation and bonuses (is calculation/formula based on billings or revenues and overhead). Opportunity to review or audit? Bonus history? How are new patients assigned?
  5. Health/welfare, retirement & fringe benefits.

(1) Health Insurance, Dental Insurance, Eye Care (review waiting periods, co-pays, coverages and exclusions).

(2) Life Insurance.

(3) Short-term/long-term disability Insurance (review waiting periods and coverage). Any gaps in coverage?

(4) Pension/Retirement (review waiting period and vesting requirements).

(5) Vacation, personal, sick time.

(6) CME.

(7) Moving expenses.

(8) Cell phone/pager.

(9) Car allowance. (Don’t bet on this)

  1. Licenses, DEA certifications, & memberships (paid or unpaid).
  2. Staff fees and parking.
  3. Non-Compete and Confidentiality Provisions.

(1) Duration.

(2) Geographical limitation.

(3) Scope (i.e. type of practice/specialty).

  1. Medical Malpractice/Professional Liability Insurance.

(1) Occurrence or claims based.

(2) Indemnification and Hold Harmless.

(3) Tail Coverage.

  1. Stock Purchase Agreement.
  2. Buy-Sell Agreement.

 

PRE-PURCHASE DUE DILIGENCE:

  1. Valuation of Business
  2. Corporate/Tax Status, i.e., P.C., Limited Liability Corporation, Partnership or Corporation (S or C corporation).
  3. Owned or Leased Property (review of mortgage or lease terms including leased equipment).
  4. Appraisal of real estate (if owned) and equipment.
  5. Patient demographics.
  6. Patient Insurance (private/Medicare/Medicaid).
  7. Examination of Financial Records and systems.
  8. Accounts receivable (collection history).
  9. Accounts payable.
  10. Financial statements, including tax returns.
  11. Bank Records.
  12. Overhead.
  13. Professionals/staff profiles (hire dates, resumes, employment applications, employment contracts, salaries and benefits). Personnel files. Independent contractors.
  14. Stock register and minute book, if applicable.
  15. Articles of Incorporation/By-laws, Partnership Agreement or Articles of Organization and Operating Agreement, depending on entity status.
  16. Business and professional licenses and permits.
  17. Patient files – how maintained (HIPAA Compliance).
  18. Insurance coverages.
  19. Litigation pending and threatened.