Things to Consider When Negotiating Your Physician Contract

Doctors expect that they will be well-compensated for their years of study and experience. Many physicians make the mistake of assuming that the money aspect will just work out and that they do not need to do anything in negotiating their compensation. Unfortunately, this is common and expected by employers. Not only can this cause a doctor to leave tens of thousands of dollars on the table, but it also can result in the doctor assenting to very unfavorable contractual terms. Many physicians are under the impression that they have to accept the terms of the contract or they will not be able to be employed. That is the furthest thing from the truth. The contract and associated offer are “openings” rather than a final contract. While this blog is not a substitute for advice from a qualified physician employment attorney, here are some of the things that you should look out for. 

Contract Term Length

Beware of the fine print. If a contract says that it is good for three years and automatically renewable after that, this does not mean that the physician gets three years of employment. Some contracts have provisions that will allow for termination of the contract–for any reason or no reason–with a short period of notice before. Even if the employer assures you that this is just “something in the contract” and they swear that they will never terminate you before the three years is up, that is no guarantee. Think about it: people move for a new position and put down roots regularly, only to be terminated two months later. 

Malpractice Insurance

Just because an employer states that it will pay for insurance does not mean that the physician is not responsible for anything. Sometimes, the practice will “pay” for the insurance by then charging it back against the physician’s total compensation. Other employers might require a client to purchase something called “tail coverage.” These are expenses that employees should not have to pay for, as they are considerable and can greatly reduce total compensation.

Moonlighting

Many physicians are engaging in the side hustle, too. Physicians often moonlight by providing telehealth services through another provider. While this may not be of interest to you at the moment, there may be a scenario where you need additional income. 

Non-Compete Provisions 

One thing you may find in a physician employment contract is a “covenant not to compete.” These provisions are often placed in employment contracts–not just for physicians–to prevent employees from going to a competitor, especially if they are taking sensitive information about their former employer with them.

Here is how they might work. You might be told that if you are fired within the first six months of working at the hospital, you could be prevented from working at a practice within a five-mile radius for two years. Depending on where you live, this can be pretty rough. Imagine buying a home, only to be fired six months later. Even if you can get a soft landing at a neighboring practice, if you are prevented from working for them, then you cannot accept the job. You would have to go out further to get employment. Now, in some areas, this might be only slightly annoying, adding just a bit more of a commute. If you are in a rural area, however, such a ban could really extend your commute and impact your career. 

It is important to note that some states ban virtually all non-competes. At the federal level, there is a strong push to eliminate non-competes. If there is a non-compete provision in your employment contract, it may not comply with the law, depending on where you live and what the terms are. Even if the non-compete provision is legal, a seasoned physician contract attorney can work to eliminate the provision.

On-Call Time

Be sure to understand the “on-call time” you will be required to show up for. Oftentimes, contract language can be vague. For instance, if a contract states that your “on-call time” will match or be equivalent to the other physicians in the practice, what does that mean? All you know is that the time split will be fair. What if the on-call time was outrageous? The fact that it is fair makes no difference to you. Make sure that the employer explicitly states how many hours and days per month of on-call time will be required of you.

Contact a Qualified Physician Contract Attorney

It may seem like hiring an attorney to help you negotiate your contract is unnecessary or will cause you to break even, but the best thing you can do when negotiating or re-negotiating your contract is to get advice. Many physicians are humble and underestimate their value. Qualified physician contract attorneys will review the physician’s CV and discuss with them their background, experience, and accomplishments. 

Another thing that a physician contract attorney will do is evaluate the physician’s goals. Is work-life balance important, or is the physician in the season of life that they want to maximize their income? Does the physician want to live in a specific geographic area? Is it important to them to be at a particular practice, or are they comfortable going wherever they get the greatest compensation? Although a physician is capable of doing this on their own, working with a neutral party can help to elucidate what is important to them and what their non-negotiables are when it comes to accepting an employment contract.

Physician contract attorneys can provide you with the exact language for the contract that will be in your favor. They can review terms or conditions that you may not fully understand. And they can arm you with data, such as salary information, that backs up the compensation and terms that you are looking for. 

Contact an experienced physician contract attorney today.