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Acupuncture Today – May, 2007, Vol. 08, Issue 05

Hospital Integration: The Art of Contracting

By Kristen E. Porter, PhD, MS, MAc, LAc and Elizabeth Sommers, PhD, MPH, LAc

Several of our past columns have provided start-up information for creating a position in a hospital or health care setting. We've discussed identifying circles of connections, considering your options, negotiating your fees and developing your strategy.

Once complete, you have paved your inroads to a new position as a staff acupuncturist at the facility. The final step before pounding this new pavement is the often dreaded "contract negotiation." Hospitals have huge legal teams working for them and we recommend you seek the advice of an attorney, as we are not qualified to give legal advice. This column will share some of our experiences in negotiating contracts with more than 20 different hospitals and health care institutions in the past decade.

What is a contract and why do we want one? Webster's defines a contract as "a binding agreement between two or more persons that is enforceable by law." A contract is characterized by mutually agreed-upon obligations and expectations. Hospitals often have templates for agreements, although acupuncture may be new to their scope; providing an initial draft might allow you to expedite the often lengthy process. Be patient, plan for two or three drafts passed back and forth over a period of four to six weeks. Thus, choose a date for your contract that starts approximately two months after the commencement of your negotiations.

In any negotiation process, remember the underlying spirit of both parties to get to a "yes." The hospital legal team is solely focused on protecting the rights of the entity; therefore you will be expected to take the lead in advocating for yourself. Choose your battles, as they say, and understand in advance what your contract priorities are, where you are willing to bend and where you must stay rooted.

Some general negotiating tips:

  • Don't let legalese language intimidate you; highlight terms or phrases you don't understand and ask questions.

  • Do your research. Know relevant facts and figures, including other acupuncture arrangements the hospital already might be engaged in.

  • Consider your bottom line and where you are willing to compromise.

  • Build trust. The relationship is crucial and will aid in the process.

  • Listen. Remember, the contracting process can set the tone for your ongoing relationship with your employer.

  • Don't get emotionally involved. Leave your ego at the door and be cautious to subdue any reactive or defensive inclination.

  • Create an agenda or checklist to keep meetings on time and structured.

Components to consider in your acupuncture contract:

  1. Period of Performance. The dates the contract will be in effect. The hospital might be inclined to suggest a short-term introductory contract, but take into consideration the return you need to make your investment worthwhile. Committing to a three-month contract, for example, might not provide the financial benefit to cover your program development time.

  2. Scope of Service. Define what you are providing and spell out what is allowed. Many hospitals will place exclusions on adjunctive treatment such as moxibustion or intradermals. Have these conversations in advance and be as specific as possible in the contract as to what provision of care is agreed upon.

  3. Statement of Work. Where and when are you providing care? Define how your treatment hours are utilized. For example, "Patients' appointments will be available upon the half hour with the use of two treatment rooms. New clients require two treatment time slots." A successful strategy in corporates "creating buy-in" among providers and educating patients, so don't forget to include additional hours needed for staff meetings or outreach/education presentations in the contract.

  4. The Three S's: Supplies, Space, Support.

    Supplies: Who provides, orders and pays for them? Many contracts include a supply share, whereby the hospital provides general medical supplies (like paper towels, paper drapes, cotton swabs, etc.), while the practitioner provides acupuncture-specific supplies. Supplies might be reimbursed separately, or may be included in the practitioner's pay. Include in this discussion, and in the contract, precisely who will be responsible for the disposal of biohazards.

    Space: Are you a paid staff person or are you engaging in a rental agreement for space? What is the space you agree upon (number of treatment rooms, etc.)? Can you treat inpatients? What about outpatients? See your own clients here?

    Support: Creating a successful program depends on a team approach. Your contract should specify what support is expected from the hospital. This might include administrative support for scheduling and confirming appointments, clinical support to check vital signs or translation support for non-English-speaking clients. Are you getting referrals? Are you being invited to attend grand rounds or other hospital-supported educational meetings? Are you collecting client/patient payment? Are you billing insurance?

  5. Your Responsibilities. The hospital will want to be assured you will maintain your licensure, abide by OSHA regulations and engage in continuing education and, therefore, might stipulate specific hospital-based training that is required. (This often includes activities such as learning how to utilize the hospital's computerized patient chart system.) Specific inoculations often are required, including HBV vaccine, annual TB test and MMR vaccine. Malpractice requirements typically are a personal $1 million to $3 million policy and might include naming the institution as an additional insured on your policy. This is easily done with most malpractice vendors, but might come with an additional cost.

  6. HIPAA. Language to confirm that you will adhere to all federal and state laws and regulations, including the Health Insurance Portability and Accountability Act (HIPAA) and its regulations. Typically, in an integrative setting, communication among providers is considered an added benefit to improve patient care. Find out how the facility addresses intra-agency provider communication. Include specific wording in the contract to allow this, such as, "Where concerns of client health or safety arise, communication between 'you' and the appropriate staff at the 'agency', as conferring health care providers will be expected and should be anticipated by all parties involved, including the client(s) in question."

  7. Use of Name. Hospitals often want to limit and protect the use of their name by other parties. Therefore, it's not uncommon for a clause to be included that requires you to obtain written approval prior to use. Use of the hospital name might be advantageous to include on your personal marketing materials to add credibility to your practice.

  8. Financial Agreements. Spell out the terms of your agreement. Are you an employee or an independent contractor? Do you receive a salary, a percent commission or an hourly wage? Are benefits offered? Who is responsible for charging patients or third-party payers? How are sick time and vacation time addressed?

  9. Termination Rights. How, when and under what circumstances the contract can be terminated. The hospital will be purely protecting itself; how will you protect your investment in the program development? Spell out how much notice is required, including any penalties, compensation upon termination, and acceptable reasons for termination. It should be discussed how both parties will address low-enrollment issues, including who regularly will analyze the utilization of the program. Upon termination, what contact, if any, can you have with your patients and are you bound by any type of "non-compete" agreement, which might prohibit you from practicing within a certain distance for a specific length of time? Lastly, include a process for making amendments to the contract if needed during the performance period.

  10. Ink the Deal. A space provided for signatures of both parties. Use blue pen whenever possible and sign two copies of the contract, so you both retain an original.

Congratulations. You've just created your first contract and will wow them at the negotiating table with your proactive and professional strategy. We always recommend creating a support structure for your professional development and this is no exception. Using the aid of a business coach, an attorney or a consultant specializing in hospital integration often is well worth the minimal investment. Don't let failing to plan predict planning to fail. Your preparation is an investment in your success, as well as the successful integration of services in new settings.

Click here for more information about Kristen E. Porter, PhD, MS, MAc, LAc.

Click here for previous articles by Elizabeth Sommers, PhD, MPH, LAc.

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