Optum’s decision to close nearly 90 medical offices in New Jersey continues to ripple through the healthcare community, affecting both patients and healthcare professionals. This unexpected move has many providers scrambling to find alternative employment, and practices seeking opportunities to partner with departing Optum providers to expand their patient base.
Along with potential new opportunities, shakeups in the healthcare marketplace such as this create a complex legal landscape.
Employers looking to engage with departing Optum providers must evaluate whether these providers remain subject to Optum’s restrictive covenants, which may include confidentiality, non-solicitation and non-compete provisions. These provisions may be enforceable regardless of Optum’s decision to close certain practice locations and terminate physicians and should not be taken lightly. A former Optum provider’s non-solicitation obligations and patient privacy laws may likely impact how a provider’s transition can be communicated to patients and the general public. If an employer takes an action that violates a former Optum physician’s post-termination restrictive covenants, they subject themselves to potential claims from Optum of interfering with Optum’s valid contractual rights.
For Optum physicians seeking new opportunities due to the layoffs, understanding their obligations under existing employment contracts is paramount. Physicians terminated by Optum may or may not have applicable carve-outs to the restrictive covenants in their employment agreements. Other providers who Optum tries to reassign themselves to its remaining location may have claims that such a reassignment constitutes a breach of their Employment Agreement. In any scenario, provisions relating to solicitation of patients and the physician’s ability to notify their patients of their new practice locations must be carefully handled to avoid potential HIPAA violations as well as contractual violations.
Employers and employees should seek professional guidance to ensure compliance with these provisions to avoid future legal action and enforcement by Optum. For personalized assistance, readers are encouraged to contact the legal team at Frier Levitt, to review existing Optum contracts and ensure legal compliance in hiring newly displaced Optum physicians.
Frier Levitt provides strategic, industry-focused legal counsel tailored to your needs. Contact our team today to learn how we can help you.
Senior Counsel
Associate
Co-Managing Partner