Judges: RICHARD P. IEYOUB
Filed Date: 6/21/2001
Status: Precedential
Modified Date: 7/5/2016
Dear Mr. LaRocca:
We received your request for an opinion on behalf of Hospital Service District Number 2 of St. Mary Parish. The District is considering entering into a contract for medical services with a physician. The contract provides that the District pay moving expenses up to $10,000. The District will pay "start up" expenses for the physician's practice up to $130,200. Additionally, the District will guarantee the physician a gross income of $664,000 over a 27 month period. This figure includes the physician's salary of $375,000 per year, all staff salaries and professional fees, advertising expenses, supplies, building rental, utilities, and malpractice insurance. At the conclusion of the 27 month guaranteed period, the physician will remain in active practice within the District's area for an additional 36 months. If the physician does not stay on at the conclusion of the 27 month period, he must re-pay all advances made by the District. You question if the amount of the contract is excessive.
La.R.S.
In light of the above, it is clear that the contract between Hospital Service District Number 2 of St. Mary Parish and the physician is in furtherance of the broad legislative purpose and power conferred in La.R.S.
The contract at issue guarantees a gross income of $664,000 over a 27 month period. In consideration of this contract, the physician agrees to maintain his medical practice in Morgan City during this 27 month period and further agrees to continue his practice there for an additional 36 months. If the physician fails to do so, he must re-pay the advances made by the District. Our office is not in a position to determine whether or not the figure contained in the contract is in fact a reasonable amount for the services rendered. We cannot determine if the payment to the physician is commensurate with the services provided. We recommend that the District seek guidance from someone within the medical profession for such a determination.
If you have any further questions or comments, please do not hesitate to contact our office.
With kindest regards,
Very truly yours,
RICHARD P. IEYOUB ATTORNEY GENERAL
BY: __________________________ TINA VICARI GRANT Assistant Attorney General
RPI/TVG:crt