What spine, orthopedic surgeons should know about noncompetes in 2023

Spine

Physicians across all specialties have had their eyes on noncompete clauses as state and federal policies change. 

Noncompetes have been a point of contention for some orthopedic surgeons this year. In September, four orthopedic surgeons settled a lawsuit against Grand Rapids-based Orthopaedic Associates of Michigan over a noncompete clause. The surgeons alleged OAM's clause forced them to leave Kent County when they wanted to move to work with a Trinity Health affiliate as employed physicians. However the practice allegedly insisted on enforcing its noncompete.

Noncompetes can put independent practices into a tough spot if surgeons don't examine contracts thoroughly, Bruce Prager, MD, of Orthopedic Center of Arlington (Texas).

"If the hospital becomes the owner of the practice it can be in several different forms: own the entire practice 100 percent or own some portion of the practice — the non-physician employees, the lease and the EMR," he told Becker's. "Either way the physician loses control and needs to have some safeguard in effect. This could be some contract that covers a certain number of years. The physician needs to make sure there is no noncompete clause. If not then the hospital can unilaterally force the doctors to move at the end of the contract leaving them with nothing but their names."

The majority of physicians — 87% polled by Doximity — support the Federal Trade Commission's proposed rule that would ban employers from imposing noncompetes.

Seven states are targeting noncompetes — California, Connecticut, Indiana, Maryland New Jersey, New York and Wisconsin. Some states enacted laws prohibiting them, while others introduced legislation aimed at them.

L. Dade Lunsford, MD, a neurosurgeon at the University of Pittsburgh, told Becker's that noncompete laws can negatively affect patients just as much as physicians. 

"It is certainly widespread among regional competing medical centers and is a known component of current contracts," Dr. Lunsford said. "Many have specific geographical restrictions so that a violation would be employment by a competitor within a certain mileage of any hospital or healthcare facility of the currently employed physician. This requires some physicians to move outside of a wide region in hospital systems that have multiple healthcare entities scattered over a wide geographic region. Thus, when a physician resigns, the noncompete enforcement can be very disruptive not only to providing healthcare for that doctor's patients but disruptive to his family as they will need to move. Hospitals believe that the patients cared for by their doctors belong to the hospital, not the doctor providing care. In fact, most patients still select their healthcare providers based on the doctor, not the doctor's employer."

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