Mastering Physician Contract Negotiation for Dermatology Residents

Why Dermatology Contracts Matter More Than You Think

Dermatology is one of the most competitive and financially rewarding specialties, which makes your first employment contract especially high stakes. The jump from the derm match to your first attending role is not just about clinical independence—it’s also about locking in terms that will shape your income, lifestyle, and career trajectory for years.

Most dermatology residents receive little to no formal education on physician contract negotiation. Yet you’re expected to evaluate complex agreements that combine healthcare law, tax strategy, productivity metrics, and restrictive covenants. A poorly negotiated contract can:

• Lock you into below-market compensation
• Limit your ability to change jobs or start your own practice
• Expose you to unexpected liability or financial risk
• Undermine your long-term career goals

This guide breaks down the key components of dermatology employment contracts and provides practical strategies for effective negotiation, including how to approach physician contract negotiation, attending salary negotiation, and employment contract review in a structured, confident way.

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Understanding the Landscape: Types of Dermatology Employment Models

Before you can negotiate, you need to understand what you’re actually negotiating. Dermatology offers a variety of practice models, each with different implications for compensation, autonomy, and risk.

1. Academic Dermatology Positions

Typical setting: University hospitals, academic medical centers, VA systems.

Common features:

• Salary-based compensation with fixed scales
• Lower emphasis on RVU-based productivity
• Strong focus on teaching, research, complex medical derm, and subspecialties (e.g., complex medical dermatology, dermatopathology)
• Public sector or university benefits (pension/retirement plans, excellent health coverage)

Negotiation levers:

• Start date, FTE level, and protected time for research or teaching
• Academic rank and promotion timelines
• Start-up packages for research (for clinician-scientists)
• Clinic support (APPs, scribes, photographer, nursing staff)
• Access to subspecialty or cosmetic procedures if desired for income supplementation

Academic salaries are often less negotiable than private practice but you can negotiate structure (time, support, duties) even when base pay is tied to institutional scales.

2. Private Practice: Employed Dermatologist

Typical setting: Single- or multi-specialty private dermatology group; sometimes PE-backed.

Common features:

• Base salary plus productivity bonus (often RVU- or collections-based)
• Potential pathway to partnership or equity
• Mix of medical, surgical, and cosmetic dermatology
• Wide variability in culture, stability, and compensation

Negotiation levers:

• Base salary and guarantee period
• Productivity formula and thresholds
• Path and timeline to partnership (buy-in, expectations, metrics)
• Non-compete scope and duration
• Cosmetic vs medical derm mix, support staff, and room use

3. Hospital/Health System Employed Dermatology

Typical setting: Large health systems, community hospitals, multi-hospital networks.

Common features:

• Base salary with RVU bonus or hybrid models
• More standardized contracts; institutional legal oversight
• Greater benefits (retirement match, malpractice coverage, CME) but potentially less flexibility

Negotiation levers:

• Starting salary and RVU targets
• Clinic schedule design (number of sessions, procedures vs general clinic)
• Support staff (scribe, MA ratio, nursing)
• Call obligations, outreach clinics, and satellite locations

4. Independent Contractor / Locums

Typical setting: Locums agencies, coverage for clinics or hospitals, part-time or transitional work.

Common features:

• Hourly or per-diem rate with no benefits
• Higher gross pay but you cover own taxes, insurance, retirement
• Great for short-term flexibility or bridging positions (e.g., immediately post residency)

Negotiation levers:

• Hourly/daily rate
• Schedule and location
• Malpractice coverage type and tail coverage
• Travel and housing stipends

Understanding your preferred model and long-term goals (e.g., owning a practice, staying academic, balancing cosmetics) is essential before you dive into detailed contract terms.

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Core Components of a Dermatology Employment Contract

Every dermatology contract is different, but most share several core elements that you must understand before you can negotiate effectively.

1. Compensation Structure: Base Pay, Bonus, and Beyond

Compensation is more than just your starting salary. Dermatology compensation packages often include multiple pieces:

Base Salary

• Guaranteed salary for a defined period (often 1–3 years)
• In early years, emphasis may be on guaranteed pay; later, more weight shifts to productivity
• Compare against regional benchmarks (MGMA, AMGA, specialty societies) and local realities (payer mix, competition)

Productivity-Based Pay

Common models in dermatology:

• wRVU-based: You earn a certain dollar amount per RVU after hitting a threshold.
  • Example: Base salary + $50 per wRVU above 5,000 wRVUs/year.
• Collections-based: You receive a percentage of revenue collected from your work.
  • Example: 30–40% of collections after overhead.
• Hybrid: Lower base salary but higher productivity upside.

Key questions to ask:

• How are RVUs credited? For procedures, cosmetics, pathology?
• Are cosmetic procedures included in productivity formulas?
• What is the historical productivity of dermatologists in the group or role you’re filling?
• Is there a ramp-up period with lower expectations?

Sign-On Bonus and Relocation

• Sign-on bonuses are common in competitive dermatology markets.
• Relocation stipends are often negotiable; clarify:
  • How much?
  • Lump sum vs reimbursement?
  • Repayment obligations if you leave early?

Benefits and Perks

• Health, dental, vision insurance
• Retirement plans (401k, 403b, 457b) and employer match
• Disability and life insurance
• CME stipend and days off (common: $2,500–$5,000 annually and 3–5 CME days)
• Licensing, board fees, and professional dues
• Parking, cell phone stipend, cosmetic procedure discounts

During attending salary negotiation, compare not just base salaries but total compensation, including benefits, bonus potential, and tax-advantaged retirement contributions.

2. Workload, Schedule, and Call Expectations

Dermatology contracts should clearly state:

• Clinic hours: Number of half-days or sessions per week
• Expected patient volumes: New vs follow-up, procedures, cosmetics
• Procedural time: Dedicated blocks for surgeries (e.g., excisions, Mohs if applicable)
• Call responsibilities:
  • Inpatient consults, after-hours calls, shared call pool?
  • Frequency and compensation (if any) for call
• Satellite clinics: Travel time, frequency, and compensation for outreach locations

Clarify whether administrative time is protected and whether it is included in RVU targets.

3. Malpractice Insurance: Occurrence vs Claims-Made

Malpractice coverage is a crucial part of employment contract review:

• Occurrence-based coverage:
  • Covers you for incidents that occur during the policy period, regardless of when the claim is filed.
  • More expensive but no need for tail insurance.
• Claims-made coverage:
  • Covers you only if the policy is active at the time the claim is filed.
  • When you leave, you often need to purchase “tail” coverage to protect against future claims.

Key questions:

• What type of malpractice policy is provided?
• Who pays for premiums now—and for tail coverage later?
• What are the coverage limits? (e.g., $1M/$3M per occurrence/aggregate)

Tail coverage for dermatology can be substantial. Negotiate:

• Employer-paid tail coverage upon termination without cause or non-renewal
• Shared responsibility formulas for tail if you leave within a short period (e.g., 1–3 years)

4. Term, Termination, and Renewal

Your contract will state:

• Initial term: Commonly 1–3 years
• Renewal: Automatic renewal vs. renegotiation at the end of term
• Termination clauses:
  • Without cause: Either party can end the agreement with notice (e.g., 60–180 days)
  • With cause: Immediate termination for defined reasons (e.g., license loss, fraud, exclusion from payers)

Pay attention to:

• Length of notice period—too long can trap you; too short can create instability
• Whether certain departures trigger repayment of sign-on bonus or relocation money

5. Non-Compete and Restrictive Covenants

Non-compete clauses are among the most consequential parts of dermatology contracts, especially in saturated markets.

Common features:

• Geographic radius: E.g., 5–20 miles from each practice location
• Duration: Typically 1–2 years
• Scope: Medical dermatology only, or medical + cosmetic + surgery?

Issues to consider:

• If the group has multiple offices, does the non-compete apply to every location or only where you work?
• Is there any buy-out option to void the non-compete?
• Does the non-compete apply if the employer terminates you without cause?

Because dermatology is so location-dependent (referrals, patient base, reputation), a restrictive non-compete can seriously limit your options. This is an area where skilled physician contract negotiation and legal review can often narrow the scope or provide escape routes.

6. Partnership Track and Equity

If the position advertises a path to partnership, get details in writing:

• Time to partnership eligibility (e.g., 2–3 years)
• Objective criteria (productivity, citizenship, quality metrics)
• Buy-in structure:
  • Fixed amount vs valuation-based
  • Financed internally vs external loans
• What does partnership actually mean?
  • Share of profits, real estate, ASC ownership, cosmetic suites, lab or dermatopathology revenue?

Ambiguous partnership promises are a frequent source of frustration among dermatologists. Insist on clarity early, even if exact financial terms will be set closer to the partnership decision.

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Step-by-Step Strategy for Successful Physician Contract Negotiation

With the key components understood, here’s how to approach the negotiation process itself.

Step 1: Do Your Homework on Market Norms

Before your first conversation:

• Review national compensation benchmarks (MGMA/AMGA if accessible through program or mentors)
• Talk to:
  • Recent graduates from your dermatology residency
  • Local dermatologists in similar practice models
  • Faculty who have transitioned to private or hospital practice
• Understand regional realities:
  • Urban vs rural
  • Academic vs private
  • Payer mix (commercial vs Medicare/Medicaid)

Having a realistic range in mind will help you anchor your attending salary negotiation and recognize when an offer is significantly below market.

Step 2: Separate Offer Evaluation from Negotiation

When you receive a contract:

1. Read it fully first without marking anything.
2. Make a list of:
   • Non-negotiable red flags (e.g., extreme non-compete, unpaid tail)
   • High-priority items (salary, hours, non-compete scope)
   • “Nice to have” items (CME increase, minor schedule tweaks)

Focus negotiation on 3–6 key points. Trying to change everything at once can make an employer defensive and stall progress.

Step 3: Bring in Professional Help: Employment Contract Review

Dermatology contracts are complex enough that professional employment contract review is almost always worth the investment, especially for your first job.

Options:

• Healthcare attorney with specific experience in physician contracts and ideally dermatology
• Contract review services oriented to physicians, sometimes bundled with financial planning
• State medical societies may offer discounted legal review

What a good reviewer will do:

• Translate dense legal language into plain English
• Identify risky clauses (termination, non-compete, tail coverage)
• Provide a prioritized list of recommended changes
• Suggest alternative language to propose

You still lead the negotiation, but you do so with a clearer understanding of risk and leverage.

Step 4: Frame the Conversation Professionally

Approach negotiation as a collaborative problem-solving discussion, not a confrontation.

Tactics:

• Start by expressing enthusiasm for the role and the team.
• Use neutral, data-driven language:
  • “Based on regional benchmarks and discussion with mentors, I was expecting a base salary closer to X.”
  • “The current non-compete radius of 25 miles from all clinic sites feels broad; would you consider narrowing it to the primary location and a 10-mile radius?”
• Offer reasoned alternatives instead of just saying “no.”

Timelines matter: Start your physician contract negotiation before you’re under intense time pressure (e.g., moving deadlines, visa timelines) when possible.

Step 5: Know What to Push Hard On—and What to Let Go

High-yield areas in dermatology:

• Malpractice/tail coverage: Extremely important; aim for employer-paid tail or shared cost under reasonable conditions.
• Non-compete: Narrow scope and radius; seek exceptions if they terminate you without cause.
• Compensation structure: Especially RVU/collections thresholds and how cosmetics are handled.
• Termination notice: Reasonable notice period (often 60–90 days).

Lower-yield or more symbolic areas:

• Extra days of PTO (often modestly flexible)
• Modest CME increases
• Minor clerical edits

Choose your battles to preserve goodwill and increase chances of real improvements.

Step 6: Get Every Key Promise in Writing

Verbal assurances like “We’d never enforce that non-compete” or “You’ll easily make partner” are meaningless unless they’re reflected in the written contract or attached addenda.

For example:

• Partnership language: “Physician will be eligible for consideration for partnership after 2 full years of employment, provided that criteria X, Y, Z are met…”
• Cosmetic time: “Practice will provide Physician with at least one half-day per week dedicated to cosmetic procedures once patient panel supports…”

If it matters to you, put it in writing.

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Dermatology-Specific Pitfalls and Opportunities

Dermatology has unique features that make some contract terms especially important.

Cosmetic Dermatology: Revenue and Resource Allocation

Cosmetic services can significantly increase your earning potential, but only if:

• You have reliable access to procedure time and rooms
• You have clarity on:
  • Who pays for product/injectables
  • How revenue is allocated
  • Whether cosmetics count toward RVUs or productivity bonuses

Questions to ask:

• How many cosmetic sessions per week do current dermatologists actually run?
• Is there competition for cosmetic room time and staff?
• Are you expected to build your own cosmetic practice from scratch, or is there existing demand?

Clarifying this up front prevents misalignment between expectations and reality.

Mohs Surgery, Dermatopathology, and Subspecialty Roles

For dermatologists with additional training:

• Mohs surgeons:
  • How are Mohs cases scheduled and allocated?
  • How is Mohs productivity credited (RVUs, collections, facility fees)?
  • Are you expected to build a practice or joining a busy existing pipeline?
• Dermatopathologists:
  • Is dermpath time split with general derm?
  • How is dermpath productivity measured and compensated?

Subspecialty work often justifies different compensation structures and schedule accommodations. Make sure the contract reflects this.

Private Equity and “Roll-Up” Dermatology Practices

Private equity involvement in dermatology has accelerated, with groups consolidating practices and emphasizing growth and efficiency.

Consider:

• Who actually owns the practice and real estate?
• How stable is the payer mix and referral base?
• Are there growth expectations that might pressure visit volumes or shorten appointments?
• Are you being offered equity, profit interests, or phantom shares—and under what conditions?

Private equity-affiliated roles aren’t inherently bad, but they warrant even more careful employment contract review to understand long-term implications.

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Integrating Contract Negotiation Into Your Derm Match Timeline

For residents nearing graduation, physician contract negotiation lives alongside fellowship decisions, board exams, and sometimes relocation.

When to Start Looking

• Late PGY-3 / Early PGY-4 (or equivalent):
  • Begin networking and exploring regions and practice types.
• 12–18 months before graduation:
  • Actively pursue interviews for your first attending role.
• 9–12 months before graduation:
  • Receive offers and begin serious employment contract review.

Starting earlier gives you:

• More leverage (you’re not desperate)
• More choice of geography and practice model
• Time to compare multiple offers

Visa Issues for International Medical Graduates (IMGs)

If you’re on a J-1 or H-1B:

• Ensure the employer understands and supports your visa needs.
• Confirm in writing:
  • Sponsorship details
  • Legal support (who pays for immigration attorney fees)
  • Any obligations tied to J-1 waiver positions (e.g., underserved areas, service years)

Visa constraints can limit geographic flexibility, which makes the non-compete clause and termination terms even more critical.

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Putting It All Together: A Practical Checklist

Use this high-level checklist when reviewing any dermatology employment contract:

Compensation

• Base salary competitive for specialty, region, and practice type
• Clear productivity formula (RVUs or collections) and realistic thresholds
• Defined handling of cosmetic revenue and procedures
• Sign-on bonus and relocation terms, including repayment conditions
• Total comp (salary + benefits + retirement) benchmarked

Schedule and Duties

• Defined clinic hours and sessions per week
• Expected patient volumes reasonable and consistent with peers
• Procedure/Mohs/cosmetic time clearly addressed
• Call obligations, outreach clinics, and travel clarified

Malpractice and Liability

• Type of malpractice coverage (occurrence vs claims-made)
• Limits appropriate and standard
• Tail coverage responsibility defined and ideally employer-funded in key scenarios

Term, Termination, Non-Compete

• Initial term length and renewal terms reasonable
• Without-cause termination notice period balanced (often 60–90 days)
• Non-compete radius, duration, and locations limited and reasonable
• Non-solicit and non-disparagement clauses not overly broad

Partnership and Career Growth

• Partnership track described with timeline and criteria
• Buy-in or equity details transparent or at least framework defined
• Opportunities for academic affiliation, teaching, or leadership if desired

Miscellaneous

• CME funds and days adequate
• Licensing, board fees, and dues covered
• Visa/immigration support for IMGs clearly specified
• Any verbal promises captured in written form

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FAQ: Dermatology Physician Contract Negotiation

1. How much room is there to negotiate a dermatology contract?

There is usually more room than residents expect, especially in private practice and hospital-employed settings. Base salary, signing bonus, non-compete scope, and malpractice/tail provisions are commonly negotiable. Academic positions tend to have less flexibility on salary but more on duties and protected time. Even when numbers are fixed, structure (schedule, support, expectations) is often negotiable.

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2. Do I really need a lawyer for my first dermatology contract?

While not legally required, having an attorney or professional contract review service with experience in physician employment contracts is highly recommended. Dermatology agreements involve subtle legal and financial risks (especially around non-competes and tail coverage). A few hundred to a couple thousand dollars spent on expert review can prevent far larger losses and constraints later.

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3. What is a reasonable non-compete for a dermatologist?

“Reasonable” varies by state and local legal standards, but for dermatology:

• Duration of 1–2 years is common.
• Radius of 5–15 miles from your primary practice location is more typical than broad, multi-county restrictions.
• Ideally, restrictions should not apply if you’re terminated without cause.
  Work with your attorney to narrow any overbroad non-compete to something you could live with if you needed to change jobs within the region.

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4. How should I compare multiple dermatology job offers?

Create a comparison table that includes:

• Base salary and productivity formula
• Estimated total compensation at realistic productivity
• Schedule, patient volume, and procedure/cosmetic time
• Non-compete scope and malpractice/tail details
• Partnership path, if applicable
• Quality of life factors: location, culture, mentorship, EMR, support staff

It’s common for a slightly lower-paying job with better lifestyle, growth potential, or partnership prospects to be more attractive long-term than a higher base salary with restrictive covenants and heavy workload. Consider your 5–10 year career vision, not just year one income.

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Navigating physician contract negotiation in dermatology is a core professional skill, not a one-time hurdle. Approaching employment contract review thoughtfully—leveraging data, mentorship, and expert legal help—positions you to transition from the derm match to a fulfilling attending role with the financial security, autonomy, and flexibility you’ve worked so hard to earn.