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.