Eskenazi Medical Group is eliminating noncompete clauses for its more than 100 physicians, according to a Fox 59 report.
Indiana legislators passed a bill that bars noncompetes among primary care physicians earlier this year, which will go into effect July 1.
"Although the new bill does not require it, EMG leadership has decided to immediately remove the noncompete clause from all new and existing employment contracts so that, going forward, no EMG employee will be subject to a noncompete," Curtis Wright, MD, CEO of Eskenazi Medical Group, said in an internal memo obtained by Becker's. "This will be accompanied by a simple amendment that deletes all references to the noncompete and buy-out provisions found in Section 4 and Exhibit A of the EMG employment contract."
Eliminating noncompetes for physicians has been met with cheers and criticism.
Kenneth Dau-Schmidt, a labor law professor at IU Maurer School of Law, told Fox 59 removing non-competes could mean a 4 percent wage boost for physicians as recruiting and retaining talent would become more competitive. He also said organizations without noncompetes may be more attractive to physicians.
Indiana Hospital Association's Brian Tabor told Fox 59 removing noncompetes adds risk for hospitals spending significant resources to recruit and retain physicians. The burden is especially stark for rural hospitals, which already have steep financial challenges and likely won't be able to win "bidding wars" over physicians, according to the report.