During the course of managing a medical practice, various other contractual agreements can arise. One example would be if the practice brings in a nonphysician provider, such as a dietitian or physical therapist, to offer services on a limited basis. Another example would be if the practice hires someone to market the practice or design a website.

These are examples of independent contractor arrangements and generally should be covered by service agreements. Service agreements need to include the term of the agreement, scope of services, duties and responsibilities of the provider, fees and payment terms, termination clauses, and confidentiality (nondisclosure) agreement, to name a few. Because physicians have a responsibility to keep patient information private, it is critical that a written agreement is created with all service providers who may have reason to access confidential patient information. In addition, these agreements identify that the service provider is an independent contractor and not considered an employee.

If there are going to be independent contractors working with the medical practice, it's important to have written agreements with them which define the scope of their work, the time that will be required from these independent contractors, their rate of pay, and the timing of these payments.

In some cases, the practice hires a billing company. The billing of medical claims is a very specialized practice, and it is critical that a comprehensive contract for these services is in place. The key points of a medical billing contract include the term of the contract, the fee associated with the service (usually stated as a percentage of collections where allowed), the minimum base fee for the service (applicable for startup practices), a list of what services are covered and what services are not covered (often, collection follow-up after the first 90 days is not covered), confidentiality clauses, responsibilities of the billing company as well as of the provider, and termination issues for each party.

The minimum things that a medical practice needs to consider for each and every contract is:

• An attorney needs to review the contract for issues that would not be obvious to the physician or manager.

• A healthcare consultant or accountant should review the contract for the tax and financial impact of the commitment.

• The insurance agent should review the agreement for insurable issues.

• The agreement must have a defined term; defined deliverables (product or service); defined relationship of the parties (eg, lessee, lessor, contractor); breach of contract language; and termination language, and be legal in the state in which it is executed.

Read the contracts yourself, and ask your advisors about any items that you don't understand. Often, the most restrictive items in an agreement prepared by a vendor are only one sentence. Evergreen clauses, for example, can state that after the initial term of the agreement, it automatically renews for a similar term—with a stated percentage increase in fee—unless notice is received 90 days before the end of the term. If you miss this simple statement, you could be bound for another year at an inflated cost unexpectedly.

It's also important to have an employee manual and to instruct employees on the right of privacy for each patient, and what they can and cannot discuss with patients. It should also discuss employees' rights as to sexual harassment and other legal issues involved with employment law.