Question 1

Non-Compete Clauses

Accepted Answer

Restrictions on where and when you can practice after leaving. Non-compete clauses (also called restrictive covenants) limit where you can practice after leaving an employer. Key factors to evaluate:  • Radius: How many miles from the employer's facilities? Under 15 miles is generally reasonable; over 30 miles may be overly restrictive. • Duration: How long does the restriction last? 12 months is common; over 24 months is aggressive. • Scope: Does it apply to your entire specialty or just a subspecialty? Broader restrictions are more concerning. • Trigger: Does it apply only to voluntary departure, or also if you're terminated without cause? • Enforceability: Non-competes vary in enforceability by state. Some states don't enforce them at all.

Question 2

Compensation Structures

Accepted Answer

Understanding base salary, RVUs, and productivity bonuses. Your compensation typically includes several components:  • Base Salary: Your guaranteed annual compensation. Compare to publicly available specialty benchmarks for your region. • wRVU Production: Work Relative Value Units measure clinical productivity. Bonus structures often pay per wRVU above a threshold. • Quality Bonuses: Tied to patient satisfaction, quality metrics, or citizenship activities. • Signing Bonus: Often $10,000–$50,000+, may require repayment if you leave early. Watch the "clawback" terms. • Loan Repayment: Some employers offer student loan repayment as part of the package. • Fair Market Value: Compensation must comply with Stark Law and Anti-Kickback Statute requirements.

Question 3

Malpractice & Tail Coverage

Accepted Answer

Who pays for your professional liability insurance? Malpractice insurance is critical to understand:  • Claims-Made vs. Occurrence: Claims-made policies cover you only if the policy is active when a claim is filed. Occurrence policies cover any incident during the policy period, regardless of when the claim is filed. • Tail Coverage: If you have claims-made insurance and leave, you need "tail coverage" to protect against future claims from past incidents. This can cost 1.5–2x the annual premium. • Who Pays: Ideally, the employer funds tail coverage. If you are responsible, this creates a significant financial barrier to leaving. • Limits: Standard limits are $1M per occurrence / $3M aggregate, but this varies by specialty and state.

Question 4

Term & Termination

Accepted Answer

Contract length, renewal terms, and how either party can end it. Understanding how your contract starts and ends:  • Initial Term: Typically 1–3 years. Longer terms provide more stability but less flexibility. • Auto-Renewal: Many contracts auto-renew for 1-year periods. Know how far in advance you must give notice to prevent renewal. • Without Cause Termination: Either party can typically end the contract with 60–180 days notice. Longer notice periods work in your favor. • For Cause Termination: Immediate termination for specific reasons (loss of license, criminal conviction, etc.). Review the list carefully. • Severance: What happens financially when the contract ends? Consider asking about severance if terminated without cause.

Question 5

Due Process & Dispute Resolution

Accepted Answer

How disagreements and termination disputes are handled. Protecting your rights in disputes:  • Arbitration vs. Litigation: Many contracts require binding arbitration, which can limit your legal options. Understand the implications. • Governing Law: Which state's laws govern the contract? This matters for non-compete enforceability. • Peer Review: For clinical disputes, is there a fair peer review process? Do you have the right to a hearing? • Cure Period: If you allegedly breach the contract, do you have an opportunity to fix the issue before termination? • Attorney's Fees: Which party bears the cost of legal proceedings?

Question 6

Red Flags to Watch For

Accepted Answer

Common contract provisions that should raise concerns. Watch for these potentially problematic provisions:  • Unilateral amendment: Employer can change terms without your consent. • Non-compete tied to any termination: Even if you're fired without cause. • No cap on call obligations: "As reasonably required" can mean anything. • Assignment clause: Employer can transfer your contract to another entity. • Intellectual property: Everything you create belongs to the employer, including research. • Vague productivity requirements: Undefined expectations that could be used against you. • Integration clause without review period: Signing away rights to rely on verbal promises.

Question 7

Benefits & Insurance

Accepted Answer

Health insurance, disability, CME, retirement, and other benefits. Benefits can represent 20–40% of your total compensation value:  • Health Insurance: Does the employer cover family premiums? What's the annual deductible and out-of-pocket max? • Disability Insurance: Short-term and long-term disability coverage is critical. Own-occupation policies protect your ability to practice your specialty specifically. • CME Allowance: Typical CME budgets range from $2,000–$5,000/year. Check whether it covers conference travel, registration, and materials. • Retirement/401(k): Look for employer match percentages and vesting schedules. A 4–6% match is competitive. • PTO & Vacation: Understand how many weeks of PTO you receive and whether CME days count against vacation. • Relocation Assistance: Some employers offer $5,000–$15,000+ for relocation. Check if it has a clawback provision.

Question 8

Loan Repayment & Clawbacks

Accepted Answer

Signing bonuses, loan forgiveness, and repayment obligations. Financial incentives often come with strings attached:  • Signing Bonus Clawback: Most signing bonuses require repayment if you leave within 1–3 years. Understand the repayment schedule — is it prorated or full repayment? • Loan Repayment Programs: Employer loan repayment is typically paid over time (e.g., $10K–$50K/year). If you leave early, remaining payments stop. • Tax Implications: Signing bonuses and loan repayment are taxable income. A $50K bonus may net closer to $30K–$35K after taxes. • Relocation Repayment: Some contracts require repaying relocation assistance if you depart within 1–2 years. • Retention Bonuses: Bonuses tied to staying for a set period. Understand what events trigger clawback — voluntary departure, termination without cause, or both? • Forgiveness Schedules: The best arrangements prorate repayment obligations so that the amount owed decreases over time.

Question 9

Preparing for Conversations

Accepted Answer

How to approach contract discussions with employers and attorneys. Being prepared for contract conversations is an investment in your career:  • Ask Questions, Don't Demand: Frame concerns as inquiries — "Can you help me understand the rationale for this clause?" is more productive than "I want this removed." • Know Your Benchmarks: Before any conversation, research publicly available compensation data for your specialty and region. Data-driven discussions are more effective. • Prioritize Your Issues: Identify your top 3–5 concerns. Trying to change everything signals inexperience and can stall the process. • Get It in Writing: Verbal promises not captured in the contract are generally unenforceable. If something is agreed upon, ask for it to be added to the agreement. • Speak with an Attorney: A healthcare attorney who understands physician contracts can identify issues you might miss. The cost ($500–$2,000) is small relative to a multi-year agreement. • Mind the Timeline: Don't rush. Ask for adequate time to evaluate — a reasonable employer will give you 2–4 weeks to consider an offer.

Question 10

Contract Discussion 101

Accepted Answer

A step-by-step guide to preparing for physician employment contract discussions. Preparing for contract conversations is a skill — and one of the highest-ROI activities in your career:  • Many Terms Are Discussable: Base salary, signing bonus, call schedule, PTO, CME budget, tail coverage, non-compete terms — all are worth exploring. Employers often expect some discussion. • Leverage Your Unique Value: Subspecialty training, bilingual skills, willingness to take call, or practice in an underserved area all strengthen your position. • Use Data, Not Emotion: Reference publicly available benchmarks, regional market data, and competing offers to support your requests. Objective data is far more persuasive than personal arguments. • Discuss the Whole Package: If the employer can't move on salary, ask about improvements elsewhere — extra PTO days, higher CME budget, a shorter non-compete, or employer-paid tail coverage. • Know Your Priorities: Before discussions begin, decide what terms matter most to you. Having clear priorities helps you focus on what's important. • Timing Matters: Have discussions after you have a written offer but before you sign. Once you sign, your leverage decreases. • Maintain Goodwill: Keep the tone collaborative. Phrases like "Is there any flexibility on…?" or "Would the organization consider…?" maintain positive relationships. • Get Agreements in Writing: If the employer verbally agrees to changes, verify they're reflected in the final written contract before signing. • Consider the Long Game: A slightly lower salary with better non-compete terms or partnership track may be worth more over 5–10 years than the highest starting offer.

Question 11

First Contract Checklist

Accepted Answer

Essential items to evaluate when reviewing your first physician contract. If this is your first contract, use this checklist to help you cover the essentials:  • Total Compensation: Add up base salary, bonuses, benefits value, and loan repayment to get the full picture. • Call Schedule: How often are you on call? Is there additional compensation for call duties? • Productivity Expectations: Are there minimum wRVU thresholds? What happens if you don't meet them? • Partnership Track: If applicable, what are the requirements and timeline for partnership? • Moonlighting: Are you permitted to work additional jobs or locum tenens positions? • Credentialing Timeline: Understand that hospital credentialing can take 3–6 months and plan accordingly. • Start Date Flexibility: Confirm the start date gives you enough time for credentialing, licensing, and relocation. • Exit Strategy: Even on day one, understand how you can leave the position and what it will cost you.

ContractMD

Know Your Contract Terms

Contract Types Guide

Non-Compete Clauses

Compensation Structures

Malpractice & Tail Coverage

Term & Termination

Due Process & Dispute Resolution

Red Flags to Watch For

Benefits & Insurance

Loan Repayment & Clawbacks

Preparing for Conversations

Contract Discussion 101

First Contract Checklist

Noncompete Laws by State

Compare States Side-by-Side

Red Flag Checklist

Salary Benchmarks

Clause of the Week

ContractMD Blog

Ready to check your own contract?

ContractMD

Know Your Contract Terms

Contract Types Guide

Non-Compete Clauses

Compensation Structures

Malpractice & Tail Coverage

Term & Termination

Due Process & Dispute Resolution

Red Flags to Watch For

Benefits & Insurance

Loan Repayment & Clawbacks

Preparing for Conversations

Contract Discussion 101

First Contract Checklist

Noncompete Laws by State

Compare States Side-by-Side

Continue Learning

Red Flag Checklist

Salary Benchmarks

Clause of the Week

ContractMD Blog

Ready to check your own contract?