Practice Owners: Registration is available for a free consultation, get your session locked in!

Your practice insight for the week

Contracts!

Not exactly the most exciting part of running a healthcare practice. Whether you’re setting up a provider agreement with a payer, hiring staff, or leasing office space, having rock-solid contracts in place is what separates thriving practices from ones that are constantly putting out fires.

Contracts in healthcare define the terms and conditions of your relationships with everyone involved in your practice. From the insurance companies you bill to the staff you hire, the right contract protects your interests and ensures everyone is on the same page. A well-written contract should define the responsibilities of each party, establish payment terms and timelines, set clear guidelines for termination and dispute resolution, protect sensitive information and patient data, and keep you compliant with healthcare regulations (like HIPAA, Stark Law, Anti-Kickback Statute, etc.).

Every practice deals with multiple contract types. Here are a few common types of agreements:

Provider agreements are contracts between your practice and payers (like insurance companies, Medicare, and Medicaid). They outline reimbursement rates, covered services, and billing procedures. If the terms aren’t favorable, or worse, unclear, you could end up providing services that don’t get reimbursed.

Employment contracts cover compensation and benefits, work hours and call schedules, non-compete and non-solicitation clauses, and termination terms. Whether you’re hiring staff or bringing on another physician, employment contracts need to be clear to avoid conflict down the road.

Service agreements define the scope of work, payment structure, confidentiality, and termination rights with third-party vendors like billing companies or IT firms.

Lease agreements for office space and equipment have long-term financial implications. Monthly costs, maintenance obligations, and exit terms need to be clear to avoid expensive surprises.

Feeling a little on the “whelmed” spectrum? We’re great listeners

Schedule a call today

Not all contracts are created equal

Some terms protect you, others not so much. Pay close attention to key provisions like the scope of services, compensation and payment terms, termination clauses, confidentiality, and dispute resolution. If the contract doesn’t clearly define what’s included and excluded, ambiguity leads to conflict. When and how are you getting paid? The contract should outline reimbursement rates, and billing timelines. Define the length of the contract and the exit strategy. Can either party terminate early? What’s the notice period?

If the contract involves sensitive patient information, it likely needs to comply with HIPAA and other privacy laws. Also, make sure the contract defines how disputes will be handled. Some contracts require arbitration, which can limit your legal options.

Healthcare contracts aren’t just about business terms, they’re tightly regulated. A few missteps can lead to compliance violations or even legal penalties. Always have contracts reviewed by healthcare-specific legal counsel. Generic contract templates won’t account for Stark Law, the Anti-Kickback Statute, or HIPAA compliance. Keep a paper trail of contract negotiations, amendments, and final agreements. If something is disputed later, you’ll want a record of what was agreed upon.

Contracts aren’t written in stone

Almost everything is negotiable. But you need to approach negotiations strategically. Do your homework. Research the other party. What’s their typical reimbursement rate? Are they known for long payment cycles or legal disputes? Knowledge is leverage.

Set clear objectives

What are your non-negotiables? Is it higher reimbursement rates, better termination terms, or more flexibility in work hours? Know what you’re willing to give up, and what you’re not.

Stay flexible

A win-win outcome is better than burning bridges. If you can’t get higher pay, maybe you can negotiate better termination terms or faster payment timelines. Communicate clearly. Misunderstandings in contracts usually come from poor communication. Be direct, clarify terms in writing, and avoid vague language.

Common contract pitfalls

Watch out for unclear termination terms, weak payment terms, excessive liability, and one-sided terms. Contracts with long payment cycles or vague reimbursement language can hurt your cash flow. If the other party can terminate easily but you can’t, that’s a problem. Make sure termination terms are balanced.

Wrapping up

Contracts might not be the most glamorous part of running a practice, but they are the backbone of your business. A well-negotiated contract helps protect your income, your reputation, and your practice’s future. Take the time to understand the terms, negotiate from a position of strength, and get legal advice. Because in healthcare, the contract you sign today could make or break your practice tomorrow.

Disclaimer: The content provided herein is intended for educational purposes only and does not constitute financial or legal advice. This content is not intended to create, and receipt of the launch guide does not constitute, an attorney-client relationship. While efforts have been made to ensure the accuracy of the information presented, it may not necessarily reflect the most current legal developments or regulations and does not provide a complete representation of all associated legal and compliance considerations for any given topic. Therefore, readers are encouraged to seek professional legal advice or consult with appropriate professionals regarding specific legal issues or concerns related to their individual circumstances.