Mistakes to avoid when negotiating a physician contract

May 20, 2019

 Job offers, new paid side gigs, and opportunities to do consulting work are all quite exciting. So exciting, in fact, that you may want to enthusiastically agree to a verbal offer and quickly sign any document the employer or client sends your way. A thorough review when negotiating a physician contract or agreement is imperative, though.

Here are five physician contract mistakes you can easily avoid.

These common mistakes apply to several settings – clinical work, nonclinical jobs, employed positions, and 1099 work.

0 Not having a contract

This is item number zero because it needs to happen before your contact review actually takes place. You must actually have a contract in order to benefit from it down the road.

Verbal and informal written agreements are binding, but they leave out important details and are fodder for differences in interpretation. Our work as physicians involves high stakes. A professional license, reputation, significant income, and other factors are involved. Having a contract protects these.

There are a few situations in which it’s acceptable to consider doing work as a physician without a contract:

  • You’re being hired as an intern or fellow for a short-term program.
  • The work is in a field or setting in which contracts aren’t standard.
  • You’ve previously done work as a contractor for this particular client, they’ve always paid on time, and you’ve never had disagreements with them.
  • A relatively small payment is being provided to you for a well-defined, one-off gig such as taking a survey.

1 Focusing solely on monetary compensation

There is much more to negotiating a physician contract than salary. From a compensation standpoint, benefits, bonuses, time off, and on-call requirements will all affect how much you earn for each hour of time you dedicate to the job.

Aside from compensation, many aspects of the agreement addressed in your contract can tangentially have an impact on your salary in the future and your ability to earn money by working for other organizations in the area.

There should be an element in your contract that says something along the lines of “Employer will pay the employee at a rate of $X per year.” But don’t scan the document for this line and sign just because X meets or exceeds your expectations.

2 Signing a physician contract because it’s “standard”

Recruiters may tell you that the contract they’re sending is standard for the company. That all their physicians sign it. Or that it’s really just a formality and that it just gets filed away.

Sure, the initial document they send you is probably the standard one they send to all new physicians. Keeping it consistent across all employees makes things easier for them. But you’re not every other physician. The “standard” language may not apply to you or be acceptable to your personal situation. It’s okay to ask for changes.

To avoid the mistake of signing a contract because it’s standard, start by looking at it broadly.

  • Does it support what you want in your professional life?
  • Does it align with what you expected based on your interviews before the offer?

If you can answer yes to those questions, then focus on the details. It is likely that all aspects of the contract are “standard” aside from your actual job duties or the statement of work. This includes components relating to:

  • Term, termination, and contract renewal
  • Raises and rate adjustments
  • Privacy and confidentiality
  • Ownership of work made during employment
  • Requirements after leaving the company

These and other provisions that are customary for the employer need to meet your needs, as well as theirs.

3 Agreeing to a change without getting it in writing

You might be told yes to a request verbally, only to find that it’s not reflected in the contract draft you’re sent. Your request is a lot less likely to pan out if you don’t take action to get it in writing before signing anything.

A recruiter’s main job is to fill a position. Sometimes there is pressure for them to do it quickly. Often, they’ll be monetarily rewarded once you’ve signed on. As a result, there may be a sense of resistance when you request changes to the proposed contract.

You might make a request for an adjustment to the offer or agreement and be met with a response similar to this:

That’s something we can definitely discuss, but let’s get everything signed so we can start the credentialing process.

You might be told that a change is possible, but be asked to hold off on your request until you’ve actually signed the contract in its current state. Chances are slim this conversation and the associated change will ever happen if there is a contract already in place. If you’re valued by the company, they’ll hold off for a moment while the necessary discussion takes place.

4 Overlooking clauses that affect your exit from the organization

Once you’ve gotten a job offer, you’re naturally excited to be starting your work with the company. Parting ways with them is probably the last thing on your mind. But you should take a moment to consider what will happen when you want to – or need to – move on.

The contract will likely include language that lays out a few items related to this.

The term (ie, timeframe) that the contract is valid and whether it renews automatically

The contract might hold for a few months or a few years. Be sure the length of time fits with your plans for your own career path and any personal factors that might impact your ability to keep working for the company in the future.

The length of notice required by either party to terminate the contract

The advanced notice you need to give if you leave your position will impact your transition at that time. Two weeks is much different than 90 days. Physician contracts – more so than those for other workers – often have long advanced notice requirements. Be sure you’re aware of what the requirement will be.

Though a written agreement may specify the amount of notice you need to give to terminate the contract, it might not do the same for the employer or it might state that no notice is needed from the employer. If this is the case, consider requesting that the employer agree to give the same notice to you that you’re agreeing to give to them.

Reasons the contract can be terminated immediately

There will be various reasons listed that the contract could be terminated immediately. For example, if you lose your license to practice medicine or you fail to comply with the terms of the agreement. Many times, these are specific and sensible. But be wary of broad, sweeping terminology that might allow the employer to terminate the contract for any reason at any time.

Your duties to the employer after the contract ends

Once you leave your position or finish your consulting work, your responsibility to the employer or client may not technically be over. Some contracts will state that you must respond to communications from them in a timely manner or make your best effort to provide requested information after your employment is over.

5 Letting restrictive clauses restrict you

Physician employment contracts are teeming with restrictive clauses, including:

  • Non-competition
  • Non-solicitation
  • Non-dealing
  • Non-poaching
  • Exclusivity

You need to consider how each of these might affect you in the future. As mentioned previously, it can be difficult to think about quitting a job that you haven’t even started yet, but it’s necessary.

Non-competition clauses can be especially limiting for physicians after leaving a company. Read the details of your contract carefully and make sure that you’ll have the freedom to pursue another job in your field and in your geographic area without excessive restriction.

States differ with regard to what restrictions are valid, so your location (or the state in which you’ll be working) is also something to consider.

Negotiating a physician contract doesn’t need to be a daunting task and doesn’t always require a lawyer. Learn the ins and outs. Your comfort level in reviewing a contract and requesting changes will increase dramatically.

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