Not all relationships go the distance, and that is sometimes the case for physicians who have contractual arrangements with hospitals, health systems, private equity-backed managed practices or other entities. But with the proper planning, experts say, physicians can successfully unwind or change their relationships with other entities in a way that works for both parties.
The AMA has compiled expert resources to help physicians unwind these existing arrangements .
The central AMA resource, “Unwinding Existing Arrangements: How to Evaluate Contractual Agreements” (PDF), covers, in depth, the most consequential physician rights and responsibilities that need to be considered when it’s time to end the relationship. The AMA also offers a model checklist (PDF) that quickly summarizes key areas such as:
- Billing practices.
- Limitations on patient relationships.
- Professional liability coverage.
- Noncompete, nonsolicitation and exclusivity.
- Practice infrastructure.
- Ownership, use and creation of materials.
- Governmental or payer-reporting obligations and other timing considerations.
To help physicians prepare for this rigorous evaluation process, the AMA has also developed a snapshot (PDF) of the topline issues to consider. It highlights these five key considerations.
Available options
You may be unhappy with the current arrangement, but what would the next step be? Would you like to return to independent practice, explore venture capital or private equity investment (PDF), or investigate taking part in an accountable care organization (PDF), a clinically integrated network or an employer model?
Costs
Figure out the short- and long-term costs—positive and negative—of unwinding the arrangement. For example, can you still have an ongoing relationship with established patients? Can you still practice in the same location? That could depend on who may own the patient medical record moving forward. Your ability to practice in a certain geography or enter into contracts can be affected by preferred (or “exclusive”) provider relationships with the organization from which you are separating.
Then you have to account for any new costs for staff, infrastructure or compliance. And don’t forget that there could be bonuses or penalties to quality-reporting programs affected by the move. It will be time for a frank conversation with colleagues in the physician group about everyone’s financial risk tolerance.
Patient portability
Your patients like you and most will want to maintain their relationship with you, but if you are suddenly out of network following a break-up, then their loyalty could be put to the test. Other issues, such as data retention and communications to patients about the unwinding of a relationship, can help or hinder the transition depending on how well they are handled.
Contractual considerations
Contractual provisions, such as noncompete agreements, that require physicians to leave a market if they are no longer employed or affiliated with a health system can be a big sticking point when trying to break away from an existing arrangement.
Physicians seemingly hemmed in by a noncompete clause might have room to negotiate if they want to keep working and living in the same area, especially if the medical services they provide are unique. This may especially be the case if it is the other party—for example, the health system—that wants to dissolve the relationship. State laws also vary on which noncompete clauses can be enforced. In addition, doctors need to understand exclusivity provisions, as well as whether the unwind will have any impact on medical staff privileges.
Timing
The choice of when to leave can significantly affect compensation and other factors important to unwinding the arrangement. Physicians who understand the contractual, financial and external factors that are driving the pressure to unwind a relationship are in a better position to smartly maneuver their way through the process.
The guidance in these three documents was developed in response to rapid industry consolidation that has yielded a circumstance in which physician practice ownership is no longer the majority arrangement. According to data (PDF) drawn from the AMA’s Physician Practice Benchmark Surveys, as of 2024, just 35.4% of physicians were practice owners, while 57.5% were employed and 7.1% were independent contractors.
"Understanding contractual provisions and implications can help physicians navigate the unwinding process strategically to limit financial impact and disruption to their practice,” the central resource notes. “Physicians would be well served to actively review their agreements with Health Organizations so they are able to make the best decision about the manner and timing of the unwinding process.”
