Mastering Physician Contract Negotiation in Preliminary Medicine: A Guide

Negotiating your first physician contract can feel intimidating—especially when you’re focused on matching into a preliminary medicine year and planning the rest of your career at the same time. Whether you’re considering a prelim IM position as a step toward anesthesiology, radiology, neurology, dermatology, PM&R, or another advanced specialty, understanding physician contract negotiation early will protect your future options and your earning potential.

This guide walks you through how physician contract negotiation intersects with the preliminary medicine year, what to look for in contracts (both as a resident and as a future attending), and how to avoid pitfalls that can limit your career mobility.

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Understanding the Preliminary Medicine Year and Why Contracts Matter

A preliminary medicine year (prelim IM) is a one-year, non-categorical internal medicine position. You complete it before starting an advanced residency (e.g., anesthesia, radiology). While many applicants focus solely on matching, the contractual side of this year is crucial for several reasons:

• It’s your first exposure to employment contract review in a formal medical setting.
• The structure of your prelim year can affect your eligibility and competitiveness for your advanced specialty.
• You may need to juggle two contracts at once (one for the prelim year and one for your advanced program).
• The skills you learn now will directly translate into attending salary negotiation and later career moves.

How Prelim IM Contracts Differ from Attending Contracts

It’s important to distinguish between:

1. Residency training contracts (including prelim IM):

   • Typically standardized by the institution
   • Governed by ACGME and institutional policies
   • Less negotiable on an individual basis
   • Focus on training expectations rather than compensation incentives

2. Attending physician employment contracts:

   • Individually negotiable
   • Highly variable between employers and markets
   • Include complex terms about compensation, productivity, call, non-competes, and more
   • Require more intensive physician contract negotiation and legal review

Even though your preliminary year contract itself may not be heavily negotiable, this is the perfect time to learn the language and concepts of contracts so you’re ready when real leverage appears in your attending job search.

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The Prelim IM Contract: What You Can and Cannot Negotiate

Most residents discover that their preliminary medicine year contract feels “take it or leave it.” That’s partially true, but there are still areas you can clarify, question, and occasionally influence.

Standard Features of a Prelim IM Contract

Your prelim IM contract or “resident agreement” typically covers:

• Duration and position type
  • One-year term as a PGY-1 internal medicine resident
  • Clarifies that it is a preliminary (not categorical) slot
• Compensation and benefits
  • Fixed salary (stipend) by PGY level
  • Health, dental, vision, disability, and sometimes life insurance
  • Retirement plan eligibility (e.g., 403(b), 401(a))—often with limited or no employer match
  • CME funds or education stipend, if offered
• Work hours and call
  • Statement of compliance with ACGME duty hour rules
  • Rotations, call expectations, and night float structures (detailed in schedule documents rather than contract text)
• Leave policies
  • Vacation time (often 3–4 weeks)
  • Sick leave
  • Parental and family leave
  • Professional leave for exams or interviews (varies widely)
• Professional obligations
  • Duty to comply with hospital policies, medical staff rules
  • Moonlighting rules (if allowed)
  • Requirements for licensure and training exams (e.g., USMLE Step 3 timing)
• Termination and remediation
  • Conditions for non-renewal or early termination
  • Remediation processes and probation language

What’s Typically Non-Negotiable

In most academic centers and large community programs, you usually cannot change:

• Base resident salary
• Standard benefit package
• Call structure or required rotations
• Core institutional policies (e.g., duty hour tracking, evaluation processes)

These are usually set at the GME or institutional level and apply to all residents.

What You Can and Should Clarify or Discuss

Even if you cannot alter the contract itself, you can often:

1. Clarify schedule flexibility

   • Ask: “How does the program accommodate fellowship/advanced residency interviews during the year?”
   • Confirm whether you can cluster electives to facilitate travel.
   • Ask if there’s a track record of flexibility with Step 3 study time or specific rotations you need for advanced specialties.

2. Confirm professional leave

   • Number of days allowed for:
     • ERAS interviews (for your advanced spot if not already secured)
     • USMLE or COMLEX exams
     • Specialty board exams later (for some international grads)
   • Whether leave is paid or unpaid and how it interacts with vacation time

3. Ask about moonlighting

   • Whether it’s allowed for prelim residents
   • Requirements: full license vs training license, institutional approval
   • Whether moonlighting counts toward duty hours
   • How malpractice coverage works for moonlighting shifts

4. Clarify housing and relocation

   • Stipends for moving costs, if any
   • Short-term housing options or discounts
   • Start date relative to orientation and when salary actually begins

These aren’t traditional “contract negotiation” levers, but they are practical points you should “negotiate” in the sense of clarifying expectations and advocating for your needs.

Red Flags to Watch for in Prelim IM Contracts

While rare in accredited programs, pay attention to:

• Ambiguous termination language allowing early termination “at will” without clear process
• Vague or nonexistent grievance procedures
• Non-standard clauses related to repayment of benefits (e.g., relocation) if you don’t complete the year
• Any clause that seems like a non-compete or prohibition on training elsewhere the following year

If something looks unusual compared to other residency contracts you’ve seen, consider asking your medical school’s GME office, a trusted faculty mentor, or—if necessary—an attorney familiar with residency agreements.

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Setting Yourself Up for Future Physician Contract Negotiation During Prelim Year

Your preliminary year is not the time for your first and only contract negotiation. It’s training for a career-long process. How you use this year can dramatically strengthen your position when you later negotiate your attending salary and broader employment terms.

Learn the Language of Physician Contracts Early

During your prelim year, expose yourself to the basics of employment contract review:

1. Ask attendings about their contracts.

   • Questions that residents often find insightful:
     • “Did you have a non-compete in your first job?”
     • “How did you negotiate your first attending salary?”
     • “Is your compensation RVU-based, salary-based, or a hybrid?”
     • “Did you use an attorney for your employment contract review?”

2. Familiarize yourself with key contract terms you’ll see later:

   • Base salary and incentive compensation (RVUs, bonuses)
   • Productivity versus collections models
   • Call obligations and stipends
   • Malpractice (claims-made vs occurrence, tail coverage)
   • Non-compete and restriction on outside practice
   • Term length and termination for cause vs without cause

3. Attend workshops or lectures offered by your institution or specialty societies on:

   • Physician contract negotiation
   • Personal finance for residents
   • Transition to practice

These activities cost you nothing but will pay off significantly when you’re no longer on fixed stipend and need to navigate attending salary negotiation in a competitive market.

Build a Portfolio That Enhances Your Future Bargaining Power

Your eventual leverage in negotiations comes not from your ability to “argue” but from the value you bring and your alternatives.

During your prelim IM year, intentionally:

• Strengthen clinical reputation
  • Be the resident attendings want on their teams.
  • Seek strong evaluations and letters of recommendation.
• Develop niche skills relevant to your advanced specialty:
  • For neurology: stroke codes, neuro-focused electives
  • For anesthesiology: perioperative medicine, ICU rotations
  • For radiology: imaging-heavy electives, procedure exposure
• Participate in scholarly projects or QI initiatives
  • Even small projects show initiative and add to your CV.
• Consider leadership roles:
  • Residency committees
  • Safety or quality councils
  • Education or wellness initiatives

Later, as an attending, specific skills, academic productivity, and leadership experience translate into:

• Higher demand in your job market
• More offers to choose from
• Justification for better compensation and more favorable contract terms

Use the Prelim Year to Plan Your Timeline

Many advanced specialties match early (e.g., through ERAS/NRMP for PGY-2+ positions). Use your prelim year to:

• Clarify when you’ll next be negotiating:
  • Fellowship contracts
  • Advanced residency positions (if unmatched or switching)
  • First attending job
• Understand when to:
  • Start researching typical salaries in your specialty and region
  • Engage a professional for employment contract review
  • Prepare financially to transition from training to practice

Treat the prelim year as your on-ramp to real-world physician contract negotiation, not as a buffer year you simply have to get through.

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Transitioning from Residency Contracts to Attending Contracts

When you move from training into your first job as an attending, the stakes change dramatically. Instead of a standardized residency agreement, you will now face a complex employment contract where negotiation can alter your income by six figures over time and shape your daily life for years.

Key Components of an Attending Physician Employment Contract

While details differ by specialty and setting, most attending contracts cover:

1. Compensation Structure

   • Base salary
   • Productivity incentives (RVUs, collections, quality metrics)
   • Signing bonus and relocation assistance
   • Retention or loyalty bonuses
   • Student loan repayment programs

2. Workload and Schedule

   • Clinical hours and FTE (full-time equivalent) definition
   • Call responsibilities (in-house vs home call, frequency, call pay)
   • Clinic vs procedural balances
   • Telemedicine expectations

3. Benefits

   • Health, dental, vision, disability, and life insurance
   • Retirement plans (with employer match or contribution)
   • CME time and funds
   • Vacation and paid time off
   • Parental leave and sick days

4. Practice Restrictions and Autonomy

   • Non-compete clauses: geographic radius and duration
   • Non-solicitation of patients or staff
   • Outside activities (moonlighting, consulting, speaking)

5. Malpractice Coverage

   • Claims-made vs occurrence coverage
   • Who pays for tail coverage if you leave
   • Coverage limits and carrier

6. Contract Term and Termination

   • Length of contract (1–3 years common for initial agreements)
   • Renewal mechanisms (automatic vs explicit renegotiation)
   • Termination for cause vs without cause
   • Notice periods (commonly 60–180 days)

Every one of these components is amenable to physician contract negotiation to some extent.

Fundamentals of Successful Attending Salary Negotiation

When you start your attending job search—typically late in your final year of residency or fellowship—approach negotiation systematically:

1. Research Market Data

   • Use multiple sources: MGMA, AAMC, specialty society data, Doximity, colleagues in similar regions.
   • Focus on total compensation, not just base salary.
   • Adjust for region, practice type (academic vs private vs employed), and subspecialty.

2. Clarify Your Priorities

   • Rank what matters most:
     • Higher base salary vs. better lifestyle
     • Geographic location vs. academic opportunities
     • Loan repayment vs. retirement contributions
   • Decide where you’re willing to compromise.

3. Get Professional Employment Contract Review

   • Hire an attorney experienced in physician contract negotiation, not general business law.
   • Ask for:
     • A written summary of key issues
     • Specific suggested language changes
     • Risk assessment of clauses you’re uncertain about (e.g., non-competes)

4. Negotiate the Package, Not Just the Number

   • If base salary seems fixed, look at:
     • Sign-on bonus
     • Relocation reimbursement
     • CME funds
     • Call compensation
     • Tail coverage responsibility
     • Protected time for research or teaching
   • Many employers have more flexibility on “one-time” or non-recurring costs than on ongoing salary lines.

5. Be Professional and Data-Driven

   • Phrase your requests around:
     • Market benchmarks (“Based on MGMA data for this region and specialty…”)
     • Value you bring (“Given my fellowship training in X and ability to expand your Y service line…”)
   • Emphasize that you’re looking for a long-term fit, not just a higher pay check.

Common Mistakes New Attendings Make in Contract Negotiation

From the perspective of someone coming out of a preliminary medicine year and advanced training, avoid these missteps:

• Focusing only on starting salary, ignoring workload, call, and non-compete terms
• Signing without independent review by a physician-focused attorney
• Overvaluing a large signing bonus while accepting a lower ongoing salary
• Underestimating the cost and risk of malpractice tail coverage
• Ignoring vague language like “reasonable duties as assigned,” which can expand your obligations over time
• Assuming “this is just the standard contract” means “non-negotiable”

Your prelim year will train you to read contracts critically; apply that same discipline here.

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Practical Step-by-Step Strategy: From Prelim IM to Your First Negotiation

To tie it all together, here’s a practical roadmap you can follow from your preliminary medicine year through your first job.

During MS4 / Application Season

• Learn the basics of residency contracts and what’s standard.
• When ranking programs, explicitly ask:
  • How they handle advanced specialty interviews for prelims
  • Support for STEP 3 and visa issues (for IMGs)

After Matching into a Preliminary Medicine Year

• When you receive your prelim IM contract:

  • Read every section once quickly, then again slowly.
  • Clarify any confusing terms with the GME office.
  • Confirm policies on leave, interviews, moonlighting, and termination.

• If you also matched into an advanced program:

  • Compare start/end dates between prelim and advanced positions.
  • Confirm there is no gap or overlap that could jeopardize your training sequence.

During Your Prelim Year

• Prioritize:

  • Excellent clinical performance and strong relationships with faculty
  • Exposure to different practice settings (academic vs community)
  • Attending lectures on finance and contracts

• Start learning about:

  • Typical compensation patterns in your future specialty
  • Common physician contract negotiation pitfalls (via articles, podcasts, or workshops)

During Final Year of Residency / Fellowship

• Begin job search 9–12 months before graduation.
• Narrow geographic and practice setting preferences.
• Gather market salary data for your specialty and region.
• Collect multiple offers when possible to enhance negotiation leverage.
• Engage an attorney for employment contract review of your top offers.
• Negotiate thoughtfully, focusing on the full package and long-term fit.

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Frequently Asked Questions (FAQ)

1. Can I really negotiate anything in my preliminary medicine year contract?

In most cases, individual negotiation of terms like salary or benefits is limited for prelim IM positions, especially in large academic health systems. However, you can and should:

• Clarify leave policies for interviews and exams
• Ask about scheduling flexibility for electives
• Understand moonlighting opportunities and conditions
• Verify how termination and remediation processes work

Think of this as less about changing the contract and more about ensuring transparent expectations and maximizing what flexibility does exist.

2. When should I first hire an attorney for physician contract negotiation?

For most residents, the optimal time to first hire an attorney is for your initial attending job contract or, for some, a complex fellowship/advanced residency agreement if it contains non-standard language or significant financial terms.

Residency contracts (including prelim year) are usually standardized enough that formal legal review is not required, though you can always ask mentors or your medical school GME officers to help you interpret them.

3. How do I know if I’m getting a fair attending salary offer?

Assess fairness by:

• Comparing the offer to regional and specialty-specific benchmarks (MGMA, specialty societies, Doximity, colleagues)
• Evaluating total compensation, not just base salary:
  • Bonuses
  • Call pay
  • Retirement contributions
  • Loan repayment
• Considering workload:
  • RVU expectations or panel size
  • Call frequency
  • Administrative support

A somewhat lower salary in a highly desirable location with lighter call may still be reasonable; context is everything. Professional employment contract review can help you interpret whether the trade-offs are sound.

4. Are non-compete clauses common, and should I accept them?

Non-competes (restrictive covenants) are common in many states and practice settings, particularly in private groups and hospital-employed positions. Whether you should accept one depends on:

• State law (some states heavily restrict or ban physician non-competes)
• Geographic radius and duration (e.g., 5 miles for 1 year vs 25 miles for 3 years)
• Your future plans—especially if you want to stay in the same city long-term

You may not be able to eliminate a non-compete, but you can often negotiate its scope. This is one of the most important areas for attorney-led employment contract review.

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By approaching your preliminary medicine year with an eye toward future physician contract negotiation, you transform a one-year training requirement into a strategic foundation for your entire career. Learn the language, observe how attendings navigate their contracts, and begin building the professional value and confidence that will serve you well when it’s time to negotiate your own attending salary and employment terms.