Entering into a medical employment contract is a significant milestone in any physician's career. Whether you are a newly graduated medical professional or an experienced practitioner considering a new opportunity, understanding the intricacies of your employment agreement is critical. Physician contracts include complex terms that go beyond basic employment conditions, requiring careful analysis to protect your professional and financial interests.
Contact us by either using the online form or calling us directly at 414-253-8500 for assistance with reviewing or negotiating your physician contract.
Why Physician Contracts Require Specialized Attention
Medical employment agreements are unique because they incorporate legal, financial, and professional practice considerations. The following are the key reasons physicians should seek a thorough contract review:
- Complex Compensation Structures: Physician contracts often include compensation tied to productivity metrics like Relative Value Units (RVUs), bonuses, and performance incentives.
- Non-Compete Clauses: Restrictive covenants may limit your ability to practice within a specific geographic area after leaving the employer.
- Call Schedules and Duties: Agreements may outline on-call responsibilities, patient load expectations, and other clinical duties that directly affect work-life balance.
- Malpractice Insurance: Provisions around coverage, including occurrence-based or claims-made policies, must be clarified.
- Termination Clauses: Understanding the grounds for termination and notice periods can prevent unforeseen disruptions to your career.
Key Elements to Review in a Physician Contract
Physicians should focus on several critical components when analyzing their contracts:
Compensation and Benefits
- Base Salary and Bonuses: Ensure the terms are clear regarding fixed compensation and variable pay such as productivity incentives.
- Benefits Package: Review health insurance, retirement plans, paid time off, and continuing medical education (CME) allowances.
- Tail Coverage: If a claims-made malpractice insurance policy is provided, confirm who is responsible for purchasing tail coverage after employment ends.
Restrictive Covenants
Non-compete clauses are common in physician contracts. Assess these clauses for:
- Geographic scope.
- Time restrictions.
- Specialty limitations.
These clauses should be reasonable and not excessively limit your ability to work in the future.
Termination Provisions
Contracts should clearly define:
- Grounds for termination (with or without cause).
- Required notice periods.
- Severance pay or penalties for early termination.
Duties and Expectations
Clarify all job-related obligations, including:
- Patient load expectations.
- Call schedule frequency and compensation.
- Administrative or non-clinical duties.
Malpractice Insurance
Understanding the malpractice coverage offered is critical. Confirm whether the policy is:
- Occurrence-Based: Covers claims for incidents that occurred during employment, regardless of when the claim is filed.
- Claims-Made: Covers claims made while the policy is active, requiring additional "tail coverage" for claims filed after employment ends.
Key Components of a Physician Employment Contract
| Component | What to Look For |
|---|---|
|
Compensation |
Base salary, productivity incentives (e.g., RVUs), bonus structures, and payment schedule. |
|
Benefits |
Health insurance, retirement plans, CME allowances, vacation and sick leave policies. |
|
Malpractice Insurance |
Type of coverage (occurrence-based vs. claims-made), tail coverage provisions, and who pays for it. |
|
Non-Compete Clauses |
Geographic area, time limitations, and specialty restrictions. |
|
Termination Terms |
Grounds for termination, notice periods, and severance provisions. |
|
Job Duties |
Call schedules, patient load expectations, and non-clinical duties. |
Why You Need a Lawyer for Contract Review
Physicians often overlook subtle but critical legal language in contracts that can significantly impact their careers. Hiring an experienced attorney helps to ensure:
- Clarity: Ambiguous terms are clarified and revised to your advantage.
- Negotiation: Attorneys can negotiate for better compensation, benefits, or reduced restrictive covenants.
- Protection: Legal professionals safeguard against unfair or exploitative terms that could harm your career long-term.
Common Pitfalls in Physician Contracts
Physician contracts often include provisions that may seem straightforward but carry significant implications. Here are common pitfalls to watch for and avoid:
Ambiguity in Compensation Terms
Contracts sometimes use vague language regarding bonuses or RVU-based pay. Without specific details, you may face discrepancies between expected and actual earnings. Insist on transparency and clear formulas for all compensation metrics.
Overly Restrictive Non-Compete Clauses
While non-compete clauses are enforceable in many jurisdictions, they should not unreasonably hinder your future career. Unreasonable geographic or time limitations can make it difficult for you to find work in your specialty after leaving a practice. Consider negotiating these clauses for more lenient terms or removal.
Unclear Call Responsibilities
Call schedules significantly affect your quality of life and work-life balance. Contracts that lack specificity about call frequency, compensation, or expectations can lead to unforeseen burdens. Ensure these details are included in the agreement.
Insufficient Malpractice Coverage
Failure to understand malpractice insurance provisions can leave you exposed to financial liability. If your employer provides only claims-made insurance, ensure tail coverage terms are explicitly addressed. Negotiating employer-paid tail coverage can save you significant costs.
Types of Malpractice Insurance in Physician Contracts
| Type | Description | Key Considerations |
|---|---|---|
|
Occurrence-Based |
Covers claims for incidents that occurred during the policy period, regardless of when filed. |
Generally more expensive but does not require tail coverage. |
|
Claims-Made |
Covers claims made while the policy is active. |
Requires tail coverage after employment ends to protect against future claims. |
|
Tail Coverage |
Additional coverage purchased to extend protection for claims filed after a claims-made policy ends. |
Negotiate for employer-paid tail coverage to avoid personal financial burden. |
Termination Without Cause Provisions
Physicians should closely examine termination clauses to ensure fairness. Employers often include provisions allowing termination without cause with short notice periods, leaving you with minimal time to transition. Seek a reasonable notice period or severance to cushion unexpected job loss.
Steps to Effectively Review a Physician Contract
To help ensure your physician contract aligns with your professional goals, follow these steps:
- Understand the Terms Fully: Review every section carefully, especially clauses on compensation, non-competes, and malpractice insurance.
- Consult a Lawyer: An attorney with experience in physician contracts can help you interpret the terms and negotiate improvements.
- Negotiate Before Signing: Address any concerns before signing the agreement. Employers are often willing to revise terms to attract qualified physicians.
- Document Everything: Retain copies of the contract and any written communications related to changes or agreements.
- Plan for the Future: Consider how the contract aligns with your long-term career goals, including potential changes in location or specialty.
Contact an Attorney for Physician Contract Review
Physician contracts are more than just employment agreements—they define the trajectory of your career. To safeguard your professional interests and help ensure a fair and equitable arrangement, seek the guidance of a knowledgeable attorney. Contact Heritage Law Office by using our online form or calling us directly at 414-253-8500. Let us help you secure a contract that aligns with your goals and protects your future.
Frequently Asked Questions (FAQs)
1. Why is it important for physicians to review their employment contracts carefully?
Physician employment contracts often contain complex legal and financial provisions that can significantly impact your career. A thorough review helps to ensure that terms like compensation, malpractice insurance, and non-compete clauses align with your goals and protect your interests.
2. What are the most critical clauses in a physician employment contract?
Key clauses include:
- Compensation and benefits (e.g., RVU-based pay, bonuses, and health insurance).
- Non-compete agreements.
- Malpractice insurance (claims-made vs. occurrence-based coverage).
- Termination provisions and notice periods.
- Job duties and call schedule expectations.
3. Can non-compete clauses in physician contracts be negotiated or removed?
Yes, non-compete clauses can often be negotiated. An experienced attorney can help reduce the geographic scope, shorten the time restriction, or even eliminate the clause entirely if it is deemed overly restrictive.
4. What happens if my employer provides only claims-made malpractice insurance?
If your employer provides claims-made malpractice insurance, you may need to purchase tail coverage to protect against claims filed after your employment ends. Negotiating employer-paid tail coverage is a common and beneficial strategy.
5. Should new physicians consult an attorney before signing their first contract?
Absolutely. New physicians may lack experience with employment agreements and can inadvertently agree to unfavorable terms. An attorney can provide guidance, explain legal jargon, and negotiate terms that better suit your career and financial goals.