Last Updated: Apr 8, 2021
On April 7, 2021,the restrictive covenants bill (House Bill 681) was approved by the House Health Committee (here's how members of the House Health Committee voted). The Pennsylvania Medical Society (PAMED) Board will be reviewing the language of the legislation to determine if it is a bill that we can support, ensuring that the legislation considers both small independent and employed physicians.
At its annual meeting, PAMED’s 2020 House of Delegates referred a resolution (Res. 20-405) to the PAMED Board for study. The resolution asked the PAMED Board to consider how restrictive covenants are used by independently practicing physicians, versus those practicing in a hospital or health system, and the effect they have on physician employment and patient access to care. Based on its findings, the resolution also asked the PAMED Board to provide guidance as to how best to approach either the abolition of all such contractual clauses or what parameters are important to include in a proposal that would be fair to all physicians equally.
The Board discussed this issue at its Feb. 3, 2021 meeting, and agreed that PAMED should continue to aggressively educate legislators on how restrictive covenants can undermine the relationship between patients and their physician. PAMED will also work to advance a legislative proposal that recognizes the difficulties employed physicians face when signing employment contracts by addressing geographic reach and duration of time of a restricted covenant.
At the same time, the PAMED Board felt that the interest of small independent physician practices must be equally protected. PAMED staff will continue to work with the legislature to ensure any legislation addressing restrictive covenants is both reasonable and balanced.
The bill now goes to the full House of Representatives for consideration, the timing of which is at present uncertain. PAMED will keep its members up-to-date on this legislation and legislative efforts regarding the issue of restrictive covenants.