Resident Rules of the Road: Chapter 6 & 7 Summary: “Fair Business Practices” and “Unfair Business Practices”

Originally Published: AAEM’s Rules of the Road for Emergency Medicine Residents, 7th Ed. Chief Editors: Tom Scaletta, MD FAAEM; Michael Ybarra, MD FAAEM; Leana Wen, MD MSc. AAEM and AAEM/RSA. Milwaukee, WI. 2010.

Chapter Summary by: Muhammad Alghanem, MSIV, MSIV Medical Student, Midwestern University – Chicago College of Osteopathic Medicine

Summary Series Editors: Muhammad Alghanem, BS, and Andrew W Phillips, MD MEd

Ingrained in the Mission Statement ( and Vision Statement ( of the American Academy of Emergency Medicine (AAEM) are the values of fair business practices in the field of emergency medicine.

AAEM stands so strongly for these values that it has created Certificates of Workplace and Employer Fairness. Information about these can be found here:

A few of the points that one should understand and consider include:

Corporate Practice of Medicine: In terms of the setup of an emergency physician group, corporations (as opposed to partnerships) are recommended as the organization legal entity for both liability purposes and for controlling business debt and expenses. Such a setup requires an attorney and financial advisors to help with everything from bylaws to contracts. Being a corporation does not mean that a group is not democratic or unfair. However, more than half of emergency physicians work for contract management groups (CMG’s) or smaller non-democratic groups, which are for-profit and may be even be publicly traded in the stock market. The drive for profit in these groups can often lead to reduced salary for emergency medicine physicians, insufficient staffing for emergency departments, and groups that may not have the interests of EM physicians or patients in mind.

Compensation: It is important for an Emergency Physician (EP) to understand how his/her compensation is calculated. Formulas can include many variables including the number of patients seen, the number of nights, weekends or holidays worked, as well as “documentation quality, clinical services rendered, and patient satisfaction.”

Due Process: Due process protects an employee or worker from termination without cause. A contract that allows for sudden termination could mean that an EP is giving up his/her right to a fair hearing and the right to appeal such a decision. Reasonable criteria for just cause for termination may include “chemical impairment, incompetence and unprofessional behavior.”

Restrictive Covenants: Non-compete clauses in contracts unfairly limit when and where emergency physicians can work after a contract ends. With a contract turnover of almost 10% per year, restrictive covenants limit competition for the finest emergency doctors in a community. This practice hurts patients when physicians who are invested in their communities are forced to leave. Non-compete clauses are not enforceable in many jurisdictions.

Fee Splitting and Closed Books: Open book accounting means that billing and financial records of a physician group are made available to group physicians to review. Closed book means just the opposite, where physicians who work for these groups don’t have access. AAEM takes a strong stand against closed book accounting practices. When an EP sees a patient, billing is made under his/her name and provider identification number. It is important that the physician has access to this information so that s/he is not unwittingly involved with incorrect billing errors and charges. Furthermore, having access to financial information allows the physician to understand how much the medical group may be skimming from potential income and ensure that s/he is not involved in unethical or illegal practices such as fee-splitting. Fee-splitting is when professionals share fees for referrals. This could happen when a medical group takes more than “fair market value” for the “management services” that they provide.

Reasonable Workloads: The Resident Rules of the Road notes that it takes a working physician an average of 24 minutes to do everything that it takes to see a patient in the emergency room from speaking with a patient and family to making decisions, writing orders, and completing required documentation. This data means that each emergency medicine physician can have “a maximal clinical workload of 2.5 patients per physician per hour (PPH).” Doing more than this is a “financially motivated decision” that comes at the cost of care quality, patient satisfaction, and burdening emergency medicine physicians into becoming burned out and dissatisfied with their profession. These factors can ultimately negatively affect the reputations of emergency departments in their respective communities.

Each of the above points is supported by various groups including the American Academy of Emergency Medicine, the American College of Emergency Physicians, the American Medical Association, the National Practitioner Data Bank, individual state and federal laws, the Joint Commission on Accreditation of Healthcare Organizations and more. For more information on fair and unfair business practices, take a look at your copy of AAEM’s Rules of the Road for Emergency Medicine Residents. We are not attorneys or financial advisors. Working with an experienced attorney and financial advisor is strongly advised.