Practice Management Q&A

January 18, 2008

Noncompete agreements; retiring from an underserved area; fraud investigations

Can a broken promise negate a noncompete?

My employer reneged on his promise to offer me a partnership after three years as an associate. Instead, he offered me a productivity bonus, and I accepted it. For the next four years I stayed with the practice, and now I want to find a new job. Am I still bound by the original noncompete agreement I signed when I joined the practice? It says I can't work in the area for two years after I leave.

Perhaps. It depends on the answers to these three questions:

(2) Is the original contract still in force? If evidence shows that the arrangement between you and your employer was consistent with the original executed employment contract-with the only modification being the bonus in place of the partnership offer-a court may hold that the contract terms are still in force. That means you have to observe the noncompete agreement. This evidence could be in the form of letters, documents, or even just the fact that the employment relationship between you and your employer did not change substantially during your seven years with the practice.

(3) Did your employer breach the original contract when he failed to offer you the partnership? If you can show that he did, you can argue that he shouldn't be allowed to benefit from the agreement's other provisions, like the noncompete. However, most contracts state that an offer of partnership is at the employer's "sole discretion." In other words, he has the right not to make the offer without a breach of contract. Moreover, you may have undermined your breach-of-contract case by accepting the situation-and the productivity bonus-for the past four years.

Retiring in an underserved community

For the past 32 years I've been the only specialist in my field in the region. How can I break the news of my upcoming retirement without alarming my patients about the lack of care in the community?

You probably can't avoid alarming them, especially if the nearest specialist is so far away that it's hard-or maybe impossible in some cases-to get the treatment they need. Nevertheless, they'll have to come to terms with the situation and work with their primary care physicians to come up with a plan for how they can best have their medical needs met.

When a fraud investigator demands records

Can the government demand access to health records usually protected under HIPAA to investigate healthcare fraud?

Yes. The HIPAA privacy rule permits you to disclose records to government health oversight agencies for audits and investigations. You may also release records to such agencies without patient authorization for civil and criminal investigations and licensure or disciplinary hearings.

In this issue, the answers to our readers' questions were provided by: Barry B. Cepelewicz, MD, JD, Meiselman, Denlea, Packman, Carton & Eberz, White Plains, NY; William H. Maruca, Esq., http://www.foxrothschild.com, Pittsburgh; Kathryn Moghadas, CHBC, Associated Healthcare Advisors & TopCat, Fern Park, FL.

Send your practice management questions to: PMQA Editor, Medical Economics, 123 Tice Blvd., Woodcliff Lake, NJ 07677-7664, or send an e-mail to mepractice@advanstar.com (please include your regular postal address).