In Pennsylvania, a new law comes into effect on January 1, limiting it to one year for the first time non-competition agreements preventing doctors and other health care workers from from leaving an employer to working for a competitor.
But experts say the legislation is not expected to change significantly on the ground.
This is because it still allows health care systems and other employers to implement the ban doctors, physician assistants, nurses and nurse anesthetists from taking up employment with competitors for up to one year.
The Fair Contracting for Health Care Professionals Act, signed into law by Gov. Josh Shapiro in July, also does not limit the geographic scope of non-competitive entities, making it hard for physicians to change employers without having to relocate on a larger scale. And the law leaves existing restrictions resulting from contracts signed in previous years in force.
That means the law doesn’t support Lorraine Rosamilia, a dermatologist in central Pennsylvania. Rosamilia drives an hour each way from State College to DuBois, Pennsylvania for her new job because she had a two-year, 30-mile non-compete clause with her previous employer.
“I’m driving 50 miles, which is about an hour, to a smaller townso that I can still live in my community where my children go to school and my husband has a business,” Rosamilia said.
She left her old job because she didn’t like how big the system had become. “It got to the point where their main concern was the number of people seen per day rather than the quality of care provided,” said Rosamilia, vice president of the Pennsylvania Medical Society.
Now some of the 5,000 patients she had on the State College campus are struggling with the consequences of not being able to continue practicing there.
“I can’t go to the grocery store without someone telling me that my melanoma skin test was canceled and never rescheduled, or that they were supposed to have surgery that they were never scheduled for, or that they’re three days late. months with the appointment date. injections they need because no one will approach them for refills,” Rosamilia said.
A national issue
Pennsylvania’s passage of a law restricting non-competes occurred at a time when the U.S. Federal Trade Commission was attempting to ban such non-competes restrictions across the country in all industries, saying yes particularly harmful to low-wage workers because contracts prevent them from taking better-paid jobs.
FTC adopted the ban in Aprilbut in August it was met with fierce opposition from businesses and a federal judge in Texas blocked the federal government from enforcing it.
From 37% to 45% of doctors are bound by non-compete agreements, according to the American Medical Association. There is no detailed report on their use in Philadelphia, although written comments submitted to the FTC by physicians in Pennsylvania and New Jersey made clear that the stakes were high.
One doctor said he left a neglected area of rural Pennsylvania and headed to New Jersey to escape the ban on competing.
What is particularly irritating for doctors is that employers also impose non-compete obligations on them specialists who do not bring their own patients health care systems, such as hospital physicians and intensivists, who provide services only in a hospital setting care. Radiologists work in similar conditions.
In an area with a high concentration of hospitals, there may be many potential employers within a few miles. For example, an analysis by The Inquirer found, there are nearly 20 general hospitals within 10 miles of Philadelphia City Hall.
The Road to Pennsylvania Law
The road to a new law in Pennsylvania began before the FTC tried to ban anti-compete laws nationwide.
Dan FrankelDemocratic representative from Allegheny County, introduced a bill in August 2023 providing that banned all non-compete agreements for health care workers. Another version of the bill this year he allowed them two years and up to 45 miles.
A lawyer representing the interests of health care systems said it was important to allow some version of a non-compete clause.
The goal “is to allow health care systems to protect their investment so that you don’t have employees, doctors who are just jumping back and forth for more money,” said Erin J. McLaughlin, an attorney who works in Pittsburgh and Newark. New Jersey, offices of Buchanan Ingersoll & Rooney.
Missing details in Pa. law
The law states that employers cannot enforce a non-compete clause against a doctor who has been fired, but it does not define “dismissal.”
That creates uncertainty about how to handle terminations for various reasons, such as whether a doctor was fired for cause or not, Karen Davidson, an independent attorney representing physicians, said in the Philadelphia County Medical Society’s newsletter.
The law allows for the enforcement of non-compete obligations against physician owners in the event of a sale of the practice. This is intended to protect practice buyers from losing their physicians after the sale closes.
However, the law is not clear what happens when doctors sell their shares of the practice’s equity when they want to leave. Can sales documents contain a non-compete clause, even if the physician has a very small stake? “It’s not clear,” McLaughlin said.
Rosamilia, a dermatologist in central Pennsylvania, described this law as a distraction. She likes that the Pennsylvania Health Care Cost Containment Council has been called in to study the impact of noncompetes on patients and doctors.
“Hopefully this will allow us to look at how noncompetes impact access to health care, quality of care, Pennsylvania-based or non-Pennsylvania-based physicians,” she said.
