March 20, 2019

Do noncompete clauses force doctors to 'ghost' their own patients?

Daily Briefing

    Physicians' contracts increasingly include noncompete clauses intended to protect their employers' business interests—but some physicians and legal scholars say the clauses can effectively prevent patients from seeing their preferred doctors, Michelle Andrews reports for the New York Times.

    Just updated: Your cheat sheets for understanding health care's legal landscape

    The rise of noncompete clauses in health care

    A survey published last year of nearly 2,000 primary care physicians in five states found nearly half have noncompete clauses in their contracts. The clauses, also called "restrictive covenants," may prohibit doctors who leave to start their own practice or move to a competing practice from seeing their former patients.

    For example, Sandra Kamnetz, vice chair of clinical care for the Department of Family Medicine and Community Health at the University of Wisconsin's School of Medicine and Public Health, said UW Health recently hired three primary care physicians whose previous contracts prohibit the doctors from seeing former patients for a two-year period.

    The Iowa Clinic, a large multi-group specialty in Des Moines, required its urologists to sign contracts barring them from practicing within 35 miles of their former employer, and from seeing former patients.

    The Iowa Clinic CEO Ed Brown told Andrews that the noncompete clauses ensure the practice can provide continuity of care, which benefits both patients and other physicians in the practice. Brown said, "Noncompetes are good for the patients because they help to provide stability within a practice and ensure continuity of care."

    When patients are caught in the middle of noncompete disputes

    But some critics argue that noncompetes can cut patients off from their preferred providers. Judy Conti, government affairs director at the National Employment Law Project, said, "When doctors want to move from one practice to another, if they've got good therapeutic relationships with their patients, you'd think that public policy would want them to continue to treat these patients that trust them."

    Andrews spoke with Don Cue, a two-time prostate cancer survivor, who had been a longtime patient of Mark Kellerman, a former urologist at The Iowa Clinic. Cue was told Kellerman was no longer available when he called to get a urine culture and antibiotics to treat a bladder infection.

    Later, Cue learned that Kellerman had been fired and was planning to start a new practice with two other former Iowa Clinic urologists—but under the terms of Kellerman's contract, he would be unable to see former patients such as Cue for at least a year.

    "As a patient, 'scared' is too strong a word," Cue said, "but my feeling is, 'What do I do now?'"            

    After Kellerman and his colleagues were let go, Andrews reports that five other urologists—who also were subject to noncompete clauses—followed.

    Charlie Wittmack, a lawyer at Hartung Schroeder who is representing Kellerman and the other two physicians who were let go, said the terminations were "tragic" for patients. "These are people who have prostate cancer or are in extreme pain because of kidney stones or have blood in their urine," Wittmack said.

    According to Andrews, the doctors are suing for wrongful termination and asking the court to rule the restrictive covenant provisions in their contracts are unenforceable.

    Are noncompetes actually enforceable in health care?

    More broadly, legal experts say it's not clear whether these noncompete clauses can be enforced, particularly in instances where they disrupt patient care.

    To be enforceable, Andrews reports, the clauses generally must be "reasonable," and they must be "narrowly drawn so that they protect an employer's legitimate business interest."

    David Clark, a partner at Epstein Becker Green, said, "No court is going to deny a patient who wants to go see a doctor of her choice."

    The specific rules governing noncompete agreements vary widely across the country. Some states, including Massachusetts and Colorado, won't enforce noncompete clauses against physicians, according to Clark. In Texas, noncompete agreements must allow doctors access to a list of their patients from the past year and access to those patients' medical records, Clark said.

    Texas medical board rules also require that "when a physician leaves, the practice is required to cooperate with a physician who wants to put up a notice that says this is where that physician can now be contacted," according to Kathy Poppitt, a partner in the health care and government and internal investigations practices at King & Spalding.

    The issue also has garnered federal attention. According to Andrews, the Trump administration in a report encouraged states to evaluate the effects of noncompete clauses on patient care access and the supply of providers in a region or specialty before declaring them enforceable (Andrews, New York Times, 3/15).

    Just updated: Your cheat sheets for understanding health care's legal landscape

    book

    To help you keep up with the ever-changing regulatory environment, we recently updated our cheat sheets on some of the most important—and complicated—legal landmarks to include a brand new one-pager on the new tax law.

    Check out the cheat sheets now for everything you need to know about MACRA, the Affordable Care Act, antitrust laws, fraud and abuse prevention measures, HIPAA, and the two-midnight rule.

    Get the Cheat Sheets

    Have a Question?

    x

    Ask our experts a question on any topic in health care by visiting our member portal, AskAdvisory.

    X
    Cookies help us improve your website experience. By using our website, you agree to our use of cookies.