CPRP Offer Negotiation and Contracts Questions and Answers

Question 1

A highly-qualified physician candidate agrees to the primary compensation terms but expresses strong opposition to the 15-mile, two-year non-compete clause in the proposed contract.
What is the most appropriate initial action for the recruitment professional?

Accepted Answer

Consult with legal counsel and organizational leadership to understand the rationale and potential flexibility of the clause.

Answer

Immediately reject the candidate's request, stating the clause is a non-negotiable organizational policy.

Answer

Advise the candidate to seek their own legal counsel to review the clause's enforceability.

Answer

Offer the candidate a higher signing bonus to compensate for their acceptance of the clause.

Question 2

What is the primary purpose of including a 'severability clause' in a physician employment agreement?

Accepted Answer

To ensure that if one part of the contract is deemed legally unenforceable, the remainder of the contract remains valid and in effect.

Answer

To outline the specific conditions and notice period required for either party to terminate the agreement without cause.

Answer

To specify that the physician is responsible for the cost of 'tail coverage' for their malpractice insurance upon departure.

Answer

To establish a formal process for resolving disputes through mediation or arbitration before pursuing litigation.

Question 3

A medical group is presenting several compensation plan options to a new physician. Which of the following models places the most direct and immediate financial risk on the physician if patient volumes are lower than projected?

Accepted Answer

A compensation model based purely on a percentage of the physician's net collections.

Answer

A two-year guaranteed salary with a quality-based annual bonus.

Answer

A base salary plus a productivity bonus based on Work RVUs (wRVUs) generated.

Answer

An income guarantee model where the organization covers any shortfall relative to a target income for the first year.

Question 4

When negotiating medical malpractice insurance, what is the most significant practical consequence for a physician whose employment agreement includes a 'claims-made' policy?

Accepted Answer

Upon termination of employment, the physician or employer must purchase an extended reporting endorsement ('tail coverage') to remain protected from future claims.

Answer

The physician has permanent coverage for any incident that occurred during their employment, regardless of when a claim is filed.

Answer

The annual premiums for this type of policy are typically much higher for the employer than an 'occurrence' policy.

Answer

The policy can be easily transferred to a new employer in a different state without any changes.

Question 5

A hospital provides a monthly stipend to a resident physician, conditioned on the resident joining the hospital's staff after completing training. To ensure the arrangement complies with the Stark Law physician recruitment exception, which of the following is a critical requirement?

Accepted Answer

The total amount paid must be documented in a signed agreement before any payments are made and must not be contingent on the volume or value of anticipated referrals.

Answer

The stipend payments must not begin until the final year of the resident's training program.

Answer

The agreement must contain a clause requiring the resident to refer patients to the hospital during their training period.

Answer

The stipend must be structured as a loan that is 100% forgivable on the physician's first day of employment.

Question 6

After a successful site visit, what is the most effective and efficient next step in the offer process before investing time and legal fees in drafting a full employment agreement?

Accepted Answer

Present a formal, written Offer Letter or Term Sheet that outlines the key business terms for the candidate's review and signature.

Answer

Schedule a follow-up call to verbally discuss the general compensation range and benefits package.

Answer

Send the candidate the organization's standard 25-page employment contract for their initial review.

Answer

Arrange a dinner meeting between the candidate and the hospital CEO to finalize the offer details in person.