Healthcare Law Blog

New Resident Legal Issues

Leaving medical school and entering residency is a daunting transition in the career of a new physician, presenting a new set of legal rules and requirements, including employment contracts and malpractice liabilities. We recommend familiarizing yourself with your program’s relevant manuals and policies and seeking legal advice when necessary.

Employment Contracts for Residents

Physicians, including residents, work under contractual guidelines to protect both the doctors and the healthcare organizations they serve. As a resident, your first employment contract will detail your salary, bonuses, responsibilities, and other important terms. Here are some key points to understand:

- Resident Physician Employment Agreement: This is a modified version of the standard physician contract, specific to residents. It is usually the first contract you will sign in your medical career.

- Standard Terms: The agreement includes terms, provisions, and clauses about your relationship with the hospital, and it is generally non-negotiable. This portion of the agreement includes the start/end dates of your residency, location of your work, shifts, and schedule.

- Compensation: The agreement will include details of your salary. Depending on your hospital, they may offer a resident stipend towards your third year of residency to encourage residents to remain at the hospital once certified and licensed. PTO, sick days, vacation days, insurance, and other benefits will often be included here.

-Termination Clause: The agreement will discuss your rights and obligations, as well as the hospital’s, should the hospital terminate your employment or should you wish to leave before the contract ends.

- Other provisions: Typically, the agreement will include clauses such as severability, supervening law, assignment, agency, and so forth. Confidentiality clauses and explanations about the state and federal privacy laws will also be available. Though resident employment agreements typically are non-negotiable, it is still important to review the terms and provisions carefully to ensure that it meets the standard for other residents and programs in your state.  

Liability and Malpractice

Residents, like any physician, can be liable for medical malpractice. As of 2018, approximately 30% of medical malpractice lawsuits name medical residents for medical professional liability.[1] The standard of care for residents varies and is not well-defined, leading to legal debates and varying standards applied in different courts across the country. 

Though malpractice insurance may cover most of the claim, any malpractice lawsuit will be public record and potentially follow you throughout your career. Residents must any lawsuits to their state medical board, which may delay licensure processes after residency.

Disciplinary Action

Medical residents are expected to adhere to their program’s rules and regulations. If accused of competency or conduct issues, residents may be subject to disciplinary action. Common disciplinary actions include:

• Administrative notice
• Verbal warnings
• Written reprimands
• Probation
• Suspension
• Termination

When you apply and recertify your licensure each year, the application may require disclosure of disciplinary actions.

Privacy and Confidentiality

Residents are obligated to maintain privacy and confidentiality through the Health Insurance Portability and Accountability Act (HIPAA) and the HIPAA Privacy Rule. HIPAA covers protected health information in any medium. The HIPAA Privacy Rule establishes national standards to protect individual medical records and other identifiable health information through electronic sources. Common HIPAA pitfalls include:

1. Unnecessary disclosure of protected health information
2. Disposing of protected health information in an insecure manner
3. Reviewing medical records without medical cause
4. Denying patients access to their own health records
5. Delaying access of health records
6. Failing to encrypt health information on portable electronic devices
7. Failing to notify patients of breaches of HIPAA privacy rights within the required 60 day window

The Department of Health and Human Services’ Office of Civil Rights may hold both the resident and the employer liable.

[1] “Medical Malpractice Lawsuits Involving Surgical Residents,” Journal of the American Medical Association Surgery, January 2018, 153(1): 8–13, https://jamanetwork.com/journals/jamasurgery/fullarticle/2652345.

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If you face legal challenges or need advice, contact a healthcare attorney at McBrayer experienced in representing medical residents, fellows, and other health professionals.

Valerie Michael is an Associate in McBrayer's Lexington office. Ms. Michael focuses her area of practice on healthcare law handling a wide variety of matters, such as healthcare professional licensure defense and compliance and regulatory issues. She also handles civil and criminal Medicare and Medicaid fraud cases, facility licensing, and certification. Ms. Michael can be reached at vmichael@mcbrayerfirm.com. 

Nancy Ngo is a 2024 Summer Associate with McBrayer's Louisville office.

Services may be performed by others. This article does not constitute legal advice.