5 Steps to Resolve Contract Disputes in Healthcare

In many employment contract disputes, physicians immediately initiate lawsuits when they believe that health systems or hospitals violated their contracts.  However, from the legal standpoint, it is best to take a more gradual, long-term approach.   The best course of action is to stay calm and to find resolutions that do not involve suing or even formally bringing lawyers to the table.  In many instances, the contract disputes appear due to a misunderstanding between the parties and litigation is unnecessary to resolve the issue.  Moreover, if physicians decide to file suit, the process can end up costing millions of dollars and several years to resolve.  Below are five steps that may help resolve contract disputes:

  1. Stay Calm.  In a vast majority of cases, physicians express anger at their employers and this anger becomes the focus of the dispute instead of the employment contract.  When physicians keep their emotions under control, it helps them realize that hospitals are inclined to resolve the issue.
  2. Review the Contract.  This might seem like an easy thing to do, but it not uncommon for physicians to misread the contracts.  There are several common misunderstandings of contracts, one of which is in regards to contract terminations.  Often contracts say that physicians can terminate their employment within 60 days of their current employment terms.  Many physicians understand this to mean that they need to simply give a 60-day notice before terminating their employment.  However, what the contract is actually saying is that physicians can leave within 60 days of their renewal dates.  Additionally, noncompete clauses also cause many misunderstandings.  For example, when a contract states that a physician cannot practice medicine within a 12 mile radius of the hospital, it might pertain not just to the main hospital building, but to all small clinics associated with the hospital, as well as other affiliated hospitals.
  3. Discuss It.  Once it is confirmed that the physician is interpreting the contract correctly, the next step would be to find the right individual or department to address their concerns.  Most hospitals have chains of command that physicians and other employees are required to follow.  In most cases, the first person to contact would be the physician’s immediate supervisor, and often they are unaware of any problems.  Therefore, by simply addressing the problem, it may be resolved at this stage.  However, physicians should prepare for this conversation thoroughly and provide several suggestions as possible solutions.  Also, even if employers do not intend on addressing concerns after the conversation, physicians should still ask themselves if they can deal with the situation at the current stage and determine if suing is worth it to them.  Even at this point, there is another step before filing a suit.
  4. Write Letters.  Physicians’ concerns are taken more seriously if they are put in writing, even though they may escalate the situation.  Physicians shouldn’t make allegations in these letters that are not based on facts.  Rather, physicians should use a courteous manner and use phrases such as “This might be a misunderstanding”, etc.  However, physicians should give their letters to attorneys for review before sending them out.  If the letter doesn’t get any reaction, physicians may consider sending breach-of-contract letters prepared by their attorneys.  If this step doesn’t bring desired results either, physicians should consider filing a lawsuit.
  5. Consider Lawsuit.  Physicians need to weigh all pros and cons first.  It is important to understand that some lawsuits can take months and several thousand dollars where as others can take years and end up costing millions.  Physicians should especially consider if they are going against well-funded hospitals.  Another factor to consider is media coverage.  Since lawsuits become public record, various government agencies may take action as well depending on the allegations which may create additional issues physicians haven’t even considered.

If physicians have gone through all of the steps and still intend to sue, they need to make sure to have a paper trail created which can be used as evidence.  The above steps may be highly useful as a way to create this evidence.