Mastering Your Physician Contract: Essential Tips for New Graduates

Why You Should Never Rush: The Critical Importance of Thoroughly Reviewing Your Physician Contract

Entering the job market after residency or fellowship is one of the most pivotal transitions in your career. You’ve worked for years to reach this point, and now you’re finally holding something that seems to validate all that effort: a written offer for your first attending position.

That document—your physician contract—is not just “paperwork” to get out of the way so you can start seeing patients. It is a legally binding agreement that will shape your daily work, income, schedule, and even where you can practice in the future. Rushing through it—or worse, signing it without a proper Contract Review—can lock you into terms that are difficult and expensive to fix later.

This guide explains why you should never rush this step, what to look for, how to approach Negotiation Tips strategically, and how to use effective Career Guidance to protect your long-term interests in Healthcare Employment.

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Understanding the Critical Role of Physician Contracts

What Is a Physician Contract?

A physician contract (also called an employment agreement or professional services agreement) is a legally binding document between you and a hospital, group practice, academic institution, telehealth company, or other healthcare employer. It typically covers:

• Employment status (employee vs. independent contractor)
• Duties and work expectations
• Compensation structure and bonuses
• Benefits and malpractice coverage
• Call responsibilities and schedule expectations
• Non-compete and non-solicitation obligations
• Termination provisions and notice requirements
• Dispute resolution methods

In practical terms, this contract defines how your professional life will function day-to-day and how your relationship with the employer may end. It has major implications for your well-being, work-life balance, and financial security.

Why Rushing Your Contract Review Is So Dangerous

1. Protecting Your Rights and Long-Term Interests

Physician Contracts are written to define rights and obligations for both parties—but they are almost always drafted by the employer’s legal team, not yours. That means the initial version will naturally favor the organization.

If you sign without a thorough review:

• You might accept a lower salary or weaker benefits than market standards.
• You could agree to inflexible schedules or heavy call burdens that lead straight to burnout.
• You may waive important rights (like certain due process protections) without realizing it.

A careful Contract Review lets you identify and correct terms that work against your best interests.

2. Clarifying Expectations and Avoiding Costly Misunderstandings

Ambiguity is the enemy of a good contract. If key expectations are vague or unwritten, you are at risk for conflict later. Common areas where unclear language causes trouble include:

• “Reasonable” call schedule (reasonable to whom?)
• “Productivity expectations” without defined benchmarks
• “Other duties as assigned” with no limit on scope
• “Full-time” without specifying hours or sessions

When expectations are not explicit, you and your employer may interpret them very differently. A thorough review helps you push for precise, measurable, and written terms.

3. Strengthening Your Negotiation Position

Review and Negotiation Tips go hand-in-hand. Understanding the full implications of your contract allows you to:

• Compare the offer to MGMA or specialty-specific benchmarks.
• Identify what is standard in your geographic and specialty market.
• Prioritize which terms matter most (e.g., salary vs. location vs. schedule vs. partnership track).
• Request changes with clear, data-backed reasoning.

You typically have the most negotiation leverage before you sign, not after. A rushed decision sacrifices that leverage.

4. Reducing Risk of Legal and Financial Problems

Once signed, your physician contract is enforceable in court or arbitration (depending on the dispute clause). If you do not understand what you agreed to, you might:

• Owe large tail malpractice premiums when you leave.
• Face legal action for violating non-compete or non-solicitation clauses.
• Lose out on expected bonuses because the metrics were misunderstood.
• Be abruptly terminated under “without cause” language, with limited recourse.

A methodical review reduces the chance you’ll be blindsided later.

5. Fully Understanding Termination and Exit Options

Many residents focus mostly on salary and overlook termination sections. This is a mistake. The termination clauses dictate:

• How easily you can exit a bad job.
• How easily you can be fired (with or without cause).
• What notice period you must serve (often 60–180 days).
• What ongoing obligations you have after leaving (non-compete, repayment of bonuses, malpractice tail).

Your career mobility—and ability to escape an unhealthy environment—depends heavily on these provisions.

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Key Elements of Physician Contracts You Must Review Carefully

Below are the core contract components every physician should scrutinize before signing, especially in the post-residency and early-career job market.

1. Compensation, Productivity, and Benefits

Base Salary and Structure

• Confirm the exact base salary, payment frequency, and pay start date.
• Clarify whether it’s a straight salary, salary plus bonus, or heavily productivity-based (e.g., RVU, collections, or capitation).
• Ask if base salary is guaranteed for a set period (e.g., first 1–2 years) or subject to change based on performance.

Actionable tip: Request a written example showing how your total compensation would be calculated at different productivity levels (e.g., 75th percentile, average, below average).

Incentives and Bonus Plans

Common bonus structures include:

• RVU-based: Payment per work RVU above a threshold.
• Collections-based: Percentage of money collected for your services.
• Quality metrics: Tied to patient satisfaction scores, readmission rates, or other hospital-defined metrics.

Key questions:

• What is the RVU or collections threshold before bonus begins?
• Are thresholds realistic for a new physician building a panel?
• How often are bonuses calculated and paid?

Benefits Package

Your benefits may represent a significant part of your total compensation:

• Health, dental, and vision insurance (for you and dependents)
• Retirement plans (401(k), 403(b), pension; employer match)
• Paid time off (PTO), holidays, sick days
• Parental leave policies
• Short- and long-term disability coverage
• Life insurance

Actionable tip: Ask for a total compensation summary including the estimated dollar value of benefits to compare offers more accurately.

Malpractice Insurance and Tail Coverage

Explicitly identify:

• Who pays the malpractice premiums (you or the employer)?
• Is the policy claims-made or occurrence-based?
• If claims-made, who is responsible for tail coverage when you leave—and what does it typically cost?

Tail coverage can cost tens of thousands of dollars, especially in high-risk specialties. This is a major financial risk if it falls on you.

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2. Work Hours, Call, and Clinical Duties

Work Schedule and Workload Expectations

The contract should spell out:

• Number of clinical days per week and hours per day
• Location(s) of work—clinic, hospital, outreach sites
• Inpatient vs. outpatient duties
• Telemedicine expectations, if applicable

Avoid vague terms like “reasonable work hours” without specific definitions. If it’s not written, it’s not guaranteed.

Call Responsibilities

Clarify:

• Call frequency (e.g., 1:4, 1:6) and how it may change.
• Inpatient vs. outpatient call; home vs. in-house call.
• Compensation for call (if any) and how it’s calculated.
• Post-call expectations—clinic the next day or protected time?

If your call burden substantially increases later without adjustment to compensation or staffing, you may regret not having firm language in the agreement.

Scope of Practice and Non-Clinical Duties

Your contract should define:

• Clinical responsibilities (procedures, service lines, patient mix).
• Expected involvement in:
  • Teaching (residents, students)
  • Research
  • Administrative duties (committees, leadership roles)

Clarify whether non-clinical time is protected or simply “expected” on top of clinical volume.

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3. Restrictive Covenants: Non-Compete and Non-Solicitation Clauses

Restrictive covenants can profoundly affect your geographic and professional freedom after leaving a job.

Non-Compete Clauses

Typical elements include:

• Geographic scope (e.g., 10–50 miles from any employer site).
• Duration after departure (commonly 1–2 years).
• Activities restricted (any practice of medicine, or only specific specialty?).

Risks:

• Being unable to practice in your preferred city or region if the job doesn’t work out.
• Having to relocate your family to continue practicing in your specialty.

Actionable tip: Request narrower, more reasonable limits:

• Reduce radius, restrict to specific locations (primary worksite only).
• Limit to your specialty rather than any clinical activity.

Non-Solicitation Clauses

These restrict your ability to:

• Recruit staff from your former employer.
• Reach out to patients or referral sources if you change jobs.

Ensure the language is specific and time-limited, and understand that violating these clauses may trigger legal action.

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4. Employment Duration, Renewal, and Termination

Contract Term and Renewal

Common structures:

• Fixed term (e.g., 1–3 years) with automatic renewal unless either party provides notice.
• At-will employment (more common in some states and systems).

Know:

• When the contract starts and ends.
• How renewal works and what changes can be made at renewal.

Termination With Cause vs. Without Cause

Your contract will usually include:

• With cause termination: For serious issues like loss of license, exclusion from Medicare, criminal behavior, etc. These should be clearly defined.
• Without cause termination: Either party can end the relationship for any reason, often with 60–180 days’ written notice.

From a Career Guidance perspective, without-cause termination cuts both ways: it gives you an exit path from a bad fit, but also allows the employer to end the relationship relatively easily.

Notice Period and Obligations

Pay close attention to:

• Length of notice you must give to resign.
• Whether the employer can waive your notice but still enforce non-compete and tail obligations.
• Whether any sign-on bonuses, relocation assistance, or loan repayments must be repaid if you leave before a certain time.

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5. Professional Development, CME, and Academic Growth

Early-career physicians often underestimate how important ongoing professional development support will be over time.

Continuing Medical Education (CME)

Clarify:

• Annual CME time (days) and CME budget (dollars).
• Whether conferences, board review courses, and specialty society meetings qualify.
• Reimbursement procedures (pre-approval vs. reimbursement after the fact).

Licensure, Dues, and Credentialing

Ask who pays for:

• State medical license(s)
• DEA registration
• Board certification and maintenance of certification fees
• Hospital privileging and credentialing expenses
• Specialty society dues

These costs add up quickly, especially if you carry multiple licenses.

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6. Dispute Resolution and Arbitration

Many Healthcare Employment contracts include dispute resolution clauses specifying:

• Whether disputes must go to arbitration or can be taken to court.
• The governing state law and venue (which can impact your rights).
• Whether each party pays their own legal fees or if the losing party covers both sides.

While you may not be able to negotiate every detail, you should at least understand:

• What process you’re locked into if something goes wrong.
• Whether the structure is reasonably fair or heavily biased toward the employer.

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Real-World Examples: How Rushed Contract Review Can Backfire

Scenario 1: The Overlooked Productivity Structure

Dr. Smith, a new hospitalist, was thrilled by an offer that listed a “competitive base salary with productivity bonuses.” He skimmed the Physician Contract and signed quickly.

After six months, he discovered:

• A large portion of his “expected income” was tied to RVU targets that were unrealistic for his census and shift pattern.
• Patients were distributed unevenly, and he often got lower-acuity cases with fewer billable RVUs.
• His actual income was 20–25% below what he had expected.

If Dr. Smith had done a careful Contract Review and asked for concrete projections and historical data (e.g., typical RVUs per FTE), he could have negotiated either a higher guaranteed base or more realistic thresholds.

Scenario 2: The Non-Compete Trap

Dr. Jane, a family medicine physician, accepted a job in a suburban multispecialty group near her hometown. She did not fully understand the non-compete clause, which prohibited her from practicing primary care within a 50-mile radius of any clinic owned by the organization for two years after leaving.

Two years into the job, she experienced persistent culture clashes and leadership changes. She wanted to join another group just 10 miles away—but:

• The non-compete clearly applied to that location.
• The cost and legal risk of challenging the clause were significant.
• Her practical options were to move away or accept a long commute to practice outside the restricted area.

Thorough review, early in the hiring process, might have led her to request a narrower radius or different structure—or to decline the job entirely in favor of a less restrictive opportunity.

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A Step-by-Step Strategy for Thorough Contract Review and Effective Negotiation

1. Slow Down—Never Sign on the Spot

Even if the offer seems perfect, resist pressure to sign quickly. A reasonable employer will expect you to:

• Take several days to a couple of weeks to review.
• Consult an experienced healthcare attorney.
• Ask questions and propose revisions.

If an organization discourages or rushes your review, that is itself a red flag.

2. Engage a Physician-Experienced Attorney

Not all attorneys are familiar with Physician Contracts. Look for:

• A lawyer who regularly handles healthcare employment agreements.
• Someone who understands your specialty and regional norms.
• Fixed-fee or clearly defined pricing for contract review.

They can:

• Spot red flags you might miss.
• Explain practical implications of each clause.
• Suggest negotiation language and realistic alternatives.

This is an investment in your long-term Career Guidance and financial stability.

3. Use Peer and Mentor Input Strategically

Discuss your offer with:

• Senior colleagues in your specialty.
• Former fellows or attendings in the same region.
• Mentors who have reviewed multiple contracts.

Ask them about:

• Typical salary, bonus, and call expectations in your area.
• Common pitfalls or “tricks” they’ve seen in Healthcare Employment agreements.
• What they would do differently if they were signing their first contract again.

4. Create a Personal Contract Review Checklist

A checklist helps ensure you don’t overlook crucial sections. Include:

• Employment status, duties, and schedule
• Compensation and bonus formulas
• Benefits, CME, and development support
• Call and coverage expectations
• Non-compete and non-solicitation terms
• Term and termination clauses
• Malpractice and tail coverage
• Repayment obligations (sign-on, relocation, loans)
• Dispute resolution and governing law

Use it to compare multiple offers on equal footing.

5. Prioritize and Negotiate with Data

You don’t need (or want) to negotiate every line item. Instead:

• Identify your top 3–5 priorities (e.g., geography, schedule, non-compete scope, salary).
• Use national data (e.g., MGMA, specialty societies) to support your requests.
• Be professional, specific, and solution oriented:
  • “Given my training and local benchmarks, I’d like to discuss raising the base salary to X.”
  • “Can we narrow the non-compete to a 10-mile radius from my primary clinic site only?”
  • “I’d like explicit language guaranteeing two days of protected administrative time per month.”

Employers expect some negotiation; doing so respectfully signals that you understand the business side of medicine.

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FAQs: Physician Contract Review, Negotiation, and Career Protection

Q1: Do I really need an attorney to review my first physician contract?
While it’s not legally required, it is strongly recommended. A healthcare-focused attorney can identify hidden risks, clarify complex clauses, and suggest Negotiation Tips that can significantly improve your terms. The cost of a review is usually small compared with the long-term financial impact of salary, benefits, non-compete restrictions, and malpractice obligations.

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Q2: How long should I take to review a physician contract before deciding?
Aim for at least one to two weeks for proper Contract Review. During this time, you should:

• Read the contract carefully at least twice.
• Make a list of questions and concerns.
• Consult with an attorney and trusted mentors. If an employer demands a same-day or 24-hour decision, consider that a warning sign about their culture and respect for physicians.

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Q3: What if there’s something in the contract I don’t agree with—will I lose the offer if I ask to change it?
Reasonable negotiation is expected in Healthcare Employment. Most employers anticipate some back-and-forth, especially regarding non-competes, call schedules, and compensation details. The key is to:

• Prioritize a few key changes.
• Make well-reasoned, data-informed requests.
• Remain professional and flexible. If an employer refuses any discussion or reacts negatively to polite negotiation, that may signal a poor long-term fit.

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Q4: Are verbal promises from the recruiter or department chair enforceable if they’re not written into the contract?
Generally, no. In most cases, the written contract is the controlling document. If a term is important to you—schedule flexibility, partnership track, administrative time, research support—ensure it is clearly stated in the contract or in a written addendum. “We’ll work that out later” is not a reliable safeguard.

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Q5: What are the biggest red flags I should watch for in a physician contract?
Common red flags include:

• Extremely broad non-compete clauses (large geographic radius, long duration, or applying to any medical practice).
• Vague or confusing compensation formulas with heavy reliance on unclear productivity metrics.
• One-sided termination clauses that make it easy for the employer to terminate you but difficult for you to leave.
• Requirement that you pay expensive malpractice tail coverage upon departure without clear cost estimates.
• Pressure to sign quickly without time for review.

If you encounter these, pause and get expert advice before moving forward.

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Thoroughly reviewing your physician contract is not a formality; it is a crucial step in building a stable, satisfying, and sustainable career. By slowing down, engaging expert help, clarifying expectations, and negotiating thoughtfully, you can transform your first (or next) physician contract from a potential liability into a strong foundation for your professional future.