Requires Patient Notification of Departure
Pennsylvania is joining the legislative bandwagon to limit noncompetition agreements for certain health care workers. In a purported effort to retain health care practitioners for the commonwealth and promote continuity of care for patients, Gov. Josh Shapiro signed the Fair Contracting for Health Care Practitioners Act into law on July 17, 2024. In addition to narrowing the scope of noncompetes in certain limited instances, it imposes a separate patient notice requirement following the “departure” of a health care practitioner. The act is not effective until January 1, 2025.
The act applies to specific health care practitioners: medical doctors, osteopaths, nurse anesthetists, registered nurse practitioners and physician assistants. The act:
- Prohibits noncompete covenants for more than one year in length in certain circumstances
- Prohibits the enforcement of a noncompete covenant against a health care practitioner if the health care practitioner is “dismissed”
- Permits an employer to recover certain reasonable expenses “related to relocation, training and establishment of a patient base” but prohibits recovery if the health care practitioner is “dismissed”
- Permits noncompete covenants related to sales or merger of a business entity
- Permits noncompete covenants where the health care practitioner receives by purchase, grant, award or issuance of an ownership interest in a “business entity”
In addition, the act requires an employer to notify “patients seen within the past year” of: (1) the “departure” of a health care practitioner, (2) how to transfer patient records to “departed health care practitioner or another health care practitioner” and (3) “that the patient may be assigned to a new health care practitioner within the existing employer if the patient chooses to continue receiving care from the employer.” An employer is required to provide these notifications within 90 days of the health care practitioner’s departure. However, the notification requirement applies only where the health care practitioner had an “ongoing outpatient relationship with the patient for two or more years.”
The act does not define many terms and is such a hodgepodge of concepts and requirements that it will be a health care employers’ nightmare.
Some unanswered questions include:
- Are reasonable noncompete covenants enforceable where the health care practitioner receives a tiny “ownership interest”?
- Are noncompete covenants effective for more than one year enforceable where an employment agreement is not renewed?
- Is a patient nonsolicitation provision included within the scope of the act?
- Is the patient notice requirement triggered regardless of the reason for the end of the employment relationship? Does the death or retirement of a health care practitioner trigger a potential notice requirement?
- Is there no patient notice requirement where the health care practitioner is employed for only 23 months (i.e. two years)?
- How is patient notice accomplished? Is a website posting sufficient?
- Is there any penalty for noncompliance?
When we ring in 2025, let the litigation begin.
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