Are There Any Exceptions To Physician Non-Compete Agreements?

Physician non-compete agreements only apply to physicians who are licensed by the Texas Medical Board, which means that they do not apply to chiropractors or other providers who have been licensed by boards which are separate from the Texas Medical Board.

How Does Stark Law Apply To Non-Compete Agreements In Texas?

Stark Law is an anti-kickback federal law. The statute prohibits medical providers from referring Medicare and Medicaid patients to facilities and service providers with whom the providers have a financial relationship. This relates to non-compete agreements in that payments made by a hospital to a physician to induce her to join a medical practice are appropriate so long as they don’t create a financial relationship under the Stark Law. However, certain criteria must be met, including the imposition of restrictions that would unreasonably limit the physician’s ability to practice medicine in the geographic area serviced by the hospital and a prohibition against any violation of anti-kickback laws.

Another criteria is a prohibition against the violation of any anti-kickback laws, which would come into play if the buyout provision is substantially below what the market would typically dictate. For example, if the typical buyout for a certain medical provider in a certain area is $200,000, and to get around that the hospital had a $25,000 buyout, then that could potentially be a violation of Stark Law, as the buyout would be substantially lower than the market value; as a result, it would essentially be treated as a kickback in value.

Why Do I Need A Highly Experienced Attorney To Draft, Revise, And Advise On A Physician Non-Compete Agreement?

In addition to the ever-changing non-compete laws that apply to general agreements in Texas, physician non-compete agreements have a layer of requirements that apply if a doctor falls within the requirements of the statutes. For example, we recently advised a psychiatrist who was being asked to sign a non-compete agreement, and many of the issues that we outlined were absent or deficient in the non-compete with which he was presented. Under such circumstances, we often advise clients that it’s better to address these issues early on versus trying to address them once the employment has ended. This is because addressing them early on will result in a better and clearer understanding of the rules that will apply post-employment.

For more information on Exceptions To Physician Non-Compete Agreement, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (281) 277-3066 today.