Mastering Physician Contract Negotiation in Orthopedic Surgery

Physician contract negotiation is one of the most consequential steps in your transition from orthopedic surgery residency or fellowship into practice. Your first contract sets the baseline for your income trajectory, work–life balance, clinical autonomy, and long-term career opportunities. Yet many residents and fellows spend more time agonizing over their ortho match rank list than over the agreements that will govern the next 3–5 years of their professional lives.

This guide breaks down physician contract negotiation in orthopedic surgery in practical, specialty-specific terms—so you can approach offers, counteroffers, and revisions with clarity and confidence.

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Understanding the Stakes: Why Orthopedic Contracts Are Different

Orthopedic surgery is among the most financially rewarding and procedurally intense specialties. That reality shapes the way physician employment contracts are written and negotiated.

Key features of orthopedic surgery contracts

1. High RVU and procedural focus

   • Orthopedics is typically one of the highest RVU-producing specialties in any system.
   • Contracts often emphasize productivity-based compensation (wRVUs, collections, or net revenue).
   • There can be significant bonuses—but also significant downside if thresholds are unrealistic.

2. Call burden and trauma coverage

   • Orthopedic call can be demanding, especially early in your career and in community or trauma-heavy hospitals.
   • Call compensation, backup expectations, and trauma panel obligations are often poorly defined unless you push for clarity.

3. Subspecialty-specific constraints

   • Sports, hand, spine, joints, trauma, pediatrics, and oncologic ortho each have unique call, clinic, and OR profiles.
   • Contract language may restrict where and how you can build your subspecialty practice (e.g., non-compete radius, access to block time, or clinic marketing).

4. Partnership and equity structures

   • Private practice orthopedic groups frequently use multi-year partnership tracks with buy-ins to the practice and sometimes to ancillaries (ASC, imaging, PT).
   • Terms of partnership eligibility, valuation, and voting rights are often vaguely described in offer letters unless you insist on more detail.

5. Hospital vs. private vs. academic dynamics

   • Academic: Lower base pay, more predictable schedule, academic promotion pathways, complex RVU incentives, research expectations.
   • Hospital-employed: Higher guaranteed salary for 2–3 years, RVU transition, system-level policies, less long-term equity.
   • Private practice: Potentially highest long-term income and autonomy, but higher risk, complex partnership mechanics, and more variability year to year.

Understanding these specialty-specific features is foundational before you dive into line-by-line employment contract review.

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Core Components of an Orthopedic Surgery Employment Contract

When you sit down with an offer, resist the urge to jump straight to the dollar figure. A good physician contract negotiation process starts with understanding the full structure of the agreement.

1. Compensation structure

Common models in orthopedic surgery:

• Straight salary (usually academic or early hospital-employed)

  • Example: $500,000 guaranteed for 2 years, then transition to RVU model.
  • Watch for: How the transition is defined, what “market-competitive” means, and whether base can decrease after the guarantee.

• Salary + RVU incentive

  • Example: $450,000 base + $60 per wRVU over 8,000 wRVUs per year.
  • Watch for: RVU conversion factor, threshold, whether call RVUs count, and whether clinic-only work can feasibly reach targets.

• Production-only (collections-based)

  • Common in private practice after a short guarantee.
  • Example: You receive 40–45% of professional collections after overhead.
  • Watch for: Overhead definition, true historical collections data, payer mix, and whether ancillaries are included or separate.

• Partnership/equity distributions

  • Beyond salary, you may receive profit-sharing from the practice and ancillaries.
  • Ask specifically:
    • How many current partners?
    • What has average partner take-home been (last 3–5 years)?
    • What portion is from ancillaries vs professional fees?

2. Term and termination

Contracts typically run 2–5 years with renewal clauses.

Pay attention to:

• Initial term and whether renewal is automatic.
• Without-cause termination:
  • Standard is 60–90 days’ written notice.
  • Too short can destabilize you; too long can trap you in a bad environment.
• For-cause termination:
  • Should be specific and limited (license loss, exclusion from Medicare/Medicaid, major misconduct).
  • Be wary of vague “unprofessional behavior” clauses without due process.

3. Duties and workload

This is where many new orthopedic surgeons underestimate the importance of detail.

Clarify:

• Weekly clinic sessions vs OR days.
• Typical new patient vs follow-up mix.
• Average patients per clinic day.
• Expected number and type of cases.
• PA or NP support and how they are billed/attributed.
• Call schedule: primary, backup, trauma panel, and holiday rotations.
• Administrative, teaching, and research responsibilities (especially academic).

4. Call coverage and compensation

Call is often undervalued in early offers.

Ask:

• Is call mandatory or voluntary?
• Is call paid separately or included in base?
• If paid:
  • Flat rate per night/weekend?
  • Stipend plus additional pay per case?
• Trauma call specifics:
  • Level I vs II vs III center?
  • Orthopedic trauma fellowship expectation?
  • Number of surgeons on the trauma panel?

If call is bundled into base pay, you can often negotiate a higher salary or reduced call requirement in exchange for setting clearer expectations.

5. Benefits, malpractice, and tail coverage

Key items:

• Malpractice coverage

  • Occurrence vs claims-made.
  • If claims-made, who pays for tail?
    • Tail can easily cost 150–300% of your annual premium, especially in orthopedics.
    • Try to negotiate employer-paid tail if you are terminated without cause, or after a certain tenure.

• Health, dental, vision, life, disability

  • Orthopedic surgery is physically demanding; own-occupation long-term disability coverage is critical.
  • Ask about the policy details, not just “yes/no” presence.

• Retirement plans

  • 401(k)/403(b) match levels and vesting schedules.
  • Additional defined-benefit or cash-balance plans (more common in high-earning groups).

• CME and professional expenses

  • CME allowance (e.g., $3,000–$6,000/year) and dedicated CME days.
  • Board fees, licensure, society dues (AAOS, subspecialty societies), DEA registration.

6. Restrictive covenants: Non-compete and non-solicit

Orthopedic surgery is highly regional and reputation-based. A harsh non-compete can uproot your entire life if you leave a job.

Typical features:

• Geographic radius: Commonly 5–20 miles from each practice location or hospital.
• Duration: Typically 1–2 years post-termination.
• Scope: Often “the practice of orthopedic surgery,” but may try to include broad musculoskeletal care.

Points to negotiate:

• Narrow the radius (e.g., from 20 to 10 miles).
• Limit to your primary practice site rather than every affiliated hospital.
• Reduce duration to 12 months.
• Include exceptions if you are terminated without cause or if you leave for specific reasons (e.g., breach by employer).

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How to Prepare for Negotiation: Data, Mindset, and Strategy

Effective physician contract negotiation before or after your ortho match results is less about being “aggressive” and more about being prepared, informed, and clear on your priorities.

1. Gather relevant compensation data

Use multiple sources:

• National surveys: MGMA, AAMC (for academic), AMGA, specialty society reports.
• Regional data: Your state medical association, local recruiters’ insights.
• Peer conversations: Recent graduates from your residency/fellowship who joined similar settings.
• Recruiters: They have a sense of what similar candidates are getting, but remember they’re paid by employers.

For orthopedic surgery, it’s common to see:

• Higher starting salaries in rural or underserved markets.
• Lower starting salaries but better long-term potential in desirable metro areas.
• Academic positions offering significantly less than private practice but with unique non-monetary benefits.

2. Clarify your personal priorities

Before you respond to any offer, write down your top 5:

• Location stability vs income maximization.
• Subspecialty practice focus (e.g., 80% sports vs general ortho mix).
• Call burden and lifestyle.
• Partnership potential and long-term earning potential.
• Academic/research or leadership opportunities.

Knowing what you care about most will shape where you push hardest during negotiation.

3. Understand timing and leverage

Your leverage is highest:

• When multiple offers are on the table.
• Immediately after an offer is made, before you verbally accept.
• In markets or subspecialties where there is high demand (e.g., ortho trauma, spine, hand).

Avoid:

• Accepting “pending contract” verbally. That can psychologically weaken your position.
• Rushing to sign within 24–48 hours unless deadlines are genuine and you’re fully comfortable.

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Step-by-Step: How to Negotiate an Orthopedic Surgery Contract

Step 1: Get the offer and full contract in writing

An email with salary and a “we’ll work out the details” promise is not enough. Ask for:

• Full employment contract
• Compensation plan (if in a separate exhibit)
• Call coverage policy
• Partnership track description (if private practice)
• Any ancillary ownership documents or summaries

Step 2: Conduct a thorough employment contract review

Do your initial pass yourself:

• Highlight unclear terms (e.g., “reasonable,” “as assigned,” “market-competitive”).
• List specific questions: “How many OR days per week?” “What is average case volume for similar surgeons?”
• Note any red flags:
  • Unilateral ability to change compensation plan.
  • Non-compete covering entire metro region.
  • Employer not paying any portion of tail coverage.

Then, involve experts:

• Healthcare attorney with physician contract experience (ideally familiar with your state and with orthopedic groups).
• Optional: A trusted senior orthopedic surgeon mentor can provide “real-world” context.

Step 3: Develop a focused ask list

Rather than sending back a contract full of red ink, prioritize 5–8 key negotiation points. Common, high-yield items for orthopedic surgery:

1. Base salary and/or RVU conversion factor.
2. Call compensation or call frequency.
3. Partnership track clarity: timeline, buy-in structure, and anticipated income post-partnership.
4. Tail coverage responsibility.
5. Non-compete radius and duration.
6. Criteria and timing for salary adjustment after guarantee period.
7. Protected time/resources for building your subspecialty.
8. Signing bonus and relocation support.

You almost never get everything you ask for, so decide in advance what’s “must-have” vs “nice-to-have.”

Step 4: Communicate professionally and clearly

You can negotiate via email, but for major points, a video or phone call followed by written summary works best.

Sample framing:

• “I’m very excited about the opportunity to join your orthopedic team. I’ve reviewed the contract with counsel and had a few specific questions and potential revisions I’d like to discuss to ensure this is a sustainable long-term fit.”
• Then walk through 3–5 major points in priority order.

Avoid framing as:

• “My lawyer says this is unacceptable.”
• “I need everything changed or I can’t work here.”

Keep it collaborative: “How can we adjust this?” not “You must.”

Step 5: Use appropriate benchmarks

When discussing compensation:

• Reference market data generically, not as ultimatums.
  • “Based on current MGMA orthopedics data for this region, similar positions typically fall in the $X–$Y range for total compensation. Is there room to move closer to that range, especially given the call expectations?”
• Tie your ask to your value: subspecialty training, trauma expertise, bilingual skills, or local ties.

Step 6: Get every change in writing

Verbal promises mean little if they contradict the contract. If they say:

• “We never enforce the non-compete.”
• “We always cover tail if someone leaves on good terms.”
• “We’ll probably give you more block time once you’re established.”

Politely respond:

• “Can we add that understanding to the contract language so expectations are clear for both sides?”

If it’s not in writing, don’t rely on it.

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Special Scenarios: From First Job to Attending Salary Negotiation

Your negotiation strategy evolves as you progress from residency/fellowship to early attending and beyond.

1. First job after residency or fellowship

You have less direct leverage but still meaningful bargaining power, especially in orthopedic surgery.

Focus on:

• Fair base salary with realistic productivity expectations.
• Support to build your practice: clinic template, OR time, marketing support.
• Manageable call for your level of experience.
• Exit safety: reasonable non-compete, employer-paid tail if you’re terminated without cause.

Be honest about your long-term plans; if you’re unsure whether you’ll stay >3 years, restrictive covenants and tail coverage become even more critical.

2. Transitioning from hospital-employed to private practice

Here, physician contract negotiation becomes more complex:

• You might accept a lower guaranteed salary for the first 1–2 years in exchange for:
  • Partnership track
  • ASC or imaging equity
  • Higher long-term earning potential
• Clarify:
  • When exactly you become eligible for partnership.
  • How the buy-in is calculated (fixed amount vs valuation formula).
  • How ancillaries distribute profits.
  • Whether you’ll inherit an established patient base.

In these transitions, employment contract review by an experienced attorney is critical because the upside is high but so is the risk if terms are opaque.

3. Renegotiating as an established attending

After 2–3 years of strong performance, your leverage increases considerably.

Use data:

• Your case volume, RVU production, and collections relative to your peers.
• Patient wait times and referral demands.
• Contributions to on-call coverage and trauma panels.

Attending salary negotiation at this stage might include:

• Higher RVU conversion factor or collection percentage.
• Additional bonus tiers for exceeding certain thresholds.
• Reduced call frequency or separate call stipends.
• Protected time for leadership, program building, or academic work.

Aim for a collaborative tone: “Given the growth of my practice and contribution to the service line, I’d like to revisit my compensation structure to better align with current performance.”

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Practical Examples and Red Flags in Orthopedic Contracts

Example 1: Hidden downside after the guarantee

Offer:

• Year 1–2: $600,000 guaranteed.
• Year 3+: wRVU-based: $50/wRVU, with 10,000 wRVU threshold.

Questions to ask:

• How many wRVUs do current surgeons produce annually?
• How long did it take them to reach 10,000 wRVUs?
• How much block time and clinic support will you have initially?

If average is 9,000 wRVUs but threshold is 10,000, your effective pay may fall sharply after the guarantee. This is a common trap.

Example 2: Problematic non-compete

Clause:

• 2-year non-compete within 25 miles of any facility owned or managed by the employer, covering “any practice of medicine.”

Problems:

• Overly broad in geography and scope.
• Could effectively force you to relocate your family if things don’t work out.

Negotiate:

• Limit to 10–15 miles from your primary practice location.
• Shorten to 12 months.
• Narrow scope to “orthopedic surgery” only.

Example 3: Tail coverage burden

You are offered:

• Claims-made malpractice.
• Employer pays premiums during employment, but you must pay for tail if you leave for any reason.

Risk:

• If you depart after 2–3 years, tail could cost $70,000–$150,000+, depending on state and coverage limits.

Possible compromise:

• Employer pays full tail if they terminate you without cause.
• Tail cost is shared based on tenure (e.g., employer pays 50% after 3 years, 75% after 5 years).
• Larger signing bonus explicitly intended to offset potential tail exposure (if they refuse to budge).

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FAQs: Physician Contract Negotiation in Orthopedic Surgery

1. When should I start learning about physician contract negotiation during training?

Ideally by PGY-4 or early PGY-5 for residents, and within the first half of fellowship for fellows. As you approach the ortho match or fellowship match, ask graduates where they went, what their contracts looked like, and what they wish they had negotiated. Early exposure makes the details far less overwhelming when the first real offer arrives.

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

Yes, in most cases. Physician employment contracts are complex, and small clauses (especially around non-compete, malpractice, and termination) can have six-figure or career-shaping implications. Choose an attorney who focuses on healthcare and physician contracts, ideally in your practice state. The cost is usually a fraction of even one month of your future income.

3. How much can I realistically negotiate as a new graduate?

You may not be able to double your salary, but you often can:

• Move base salary or signing bonus upward within a reasonable range.
• Adjust call expectations or secure better call pay.
• Clarify and improve partnership track language.
• Narrow non-compete clauses.
• Improve tail coverage terms or exit protections.

Employers expect some level of physician contract negotiation. Professional, data-driven requests rarely jeopardize the offer if made respectfully.

4. What’s more important: first-year salary or long-term potential?

For orthopedic surgery, long-term potential usually matters more, assuming your first-year salary is fair and sustainable. A slightly higher starting salary is far less valuable than:

• A realistic, transparent path to partnership or leadership.
• Access to OR time and subspecialty-appropriate cases.
• Reasonable restrictive covenants that don’t trap you.
• A culture that supports you clinically and personally.

Evaluate the entire package: income trajectory, lifestyle, professional growth, and exit flexibility.

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Physician contract negotiation in orthopedic surgery is not just about money—it’s about aligning your skills, values, and long-term goals with a practice environment that lets you thrive. Approach each offer systematically: understand the contract, gather data, clarify your priorities, negotiate thoughtfully, and put everything in writing. Doing so early in your career can transform a “good job” into a truly sustainable and rewarding orthopedic practice.