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The staffing and management of physician services in a hospital emergency department (ED) is commonly provided by an exclusive contract between the hospital and a physician group or practice management organization. While some hospitals choose to employ or directly contract with individual emergency physicians, this chapter will focus on the more common form of contracting, that is, a hospital and physician group contract for staffing and management of the clinical and professional services.

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When entering a legal contract with a hospital, it is advisable for physician groups to obtain legal counsel. The old adage “The man who represents himself in legal matters … has a fool for a lawyer,” applies to contracting with hospitals. There are numerous legal, compliance, performance, and regulatory issues involved in relationships between hospitals and physicians. While counsel should always be used to ensure that the intent of the parties is legally met in the language of the contract, counsel does not obviate the requirement that the physician group has

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  • Requisite working knowledge of contracts
  • Insight into key contract terms
  • Involvement in the contracting process

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It is imperative for physician groups contracting with hospitals to understand the most basic and key contract terms. This chapter specifically provides the physician group an outline and summary of several of the most critical elements of contracts between emergency physician groups and hospitals.

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An emergency services contract is a (written) document agreed to by at least 2 parties or entities that describes what each party is to do for the other party(ies).1 A service contract has a start date, an end date, and “consideration” (value exchanged). An emergency services agreement (ESA) is used when a hospital desires to outsource its emergency physician services to an outside party in order to provide care and treatment for patients presenting at the hospital's ED. The ESA is designed to create clear and detailed expectations between the parties and describes the specific services that are to be provided, “how much,” “how long,” “where,” and for what consideration (what and how each party will be reimbursed for providing the services).

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A contract documents and governs what happens to the relationship if certain events or promises occur and do not occur. For instance, if in the future, the contracting parties choose to terminate the agreement, the contract should define the obligations of both parties. Well-written contracts provide pathways for resolutions of most disagreements between the parties. Contract related lawsuits between the parties are more often related to poorly written or unclear expectations than to blatant disregard for clearly written responsibilities and understood expectations. Time spent on the front end of a contractual relationship to clearly define and document expectations is well worth the effort and prevents confusion, misunderstanding, and blame later.

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“Negotiating a contract can be the first major test of a relationship or a major challenge in an established relationship. How the parties ...

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