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8 Physician Employment Contract Items You Need To Know About

Discussion in 'Doctors Cafe' started by Mahmoud Abudeif, Jul 30, 2021.

  1. Mahmoud Abudeif

    Mahmoud Abudeif Golden Member

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    Unless you start your own practice after training, you will be signing an employment contract. The contract is critical in bridging the expectations of you and your employer. It also gives you the chance to lay out what you want from your employment.

    Your contract is composed of a number of important clauses and provisions, and it is possible that not all of them will work in your best interest. If you see any of these 8 concerning contract items when reviewing your contract, it is probably time to negotiate.

    8 physician employment contract items you need to know about

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    1. Unclear work expectations

    There are many potential pain points in any working relationship. They include:
    • work schedules
    • office locations
    • call obligations
    • patient allocation
    • research time

    In many cases, the contract will have ambiguous parameters for your actual hourly work expectations. It may state something as simple as “full-time” or give a minimum hourly range per week.

    Like many contractual clauses, these hourly/shift expectations should be clearly outlined with objective parameters in your contract. You do not want to be blindsided by shifts that last four hours longer than you originally expected. And you don’t want to be required to work on holidays when you planned to have those days off.

    Work expectations may seem basic. That is why they often go overlooked and why they deserve to be given close consideration.

    2. Unreasonable non-competes

    Most physicians who have been through the employment contract negotiation process have been warned about non-compete clauses. A non-compete restricts you from working within a certain geographic area after your contract terminates.

    A typical radius would be anywhere from 2 to 50 miles. However, this will be highly dependent on the setting of your place of employment (i.e. rural vs. urban). If a non-compete restricts you from practicing within a large radius (50 to 100 miles), especially in a densely populated area, then you should consider negotiating these terms.

    Also, the duration and scope of restriction should be reviewed to ensure they are in line with market standards. Some states have prohibited non-competes on physicians. In that event, the non-compete should be removed from your contract entirely.

    3. Delayed benefits

    Benefits are a huge part of what draws many physicians to an employed position. In your contract, an employer should offer you a benefits package that includes all or most of the typical components, including:
    • health insurance
    • disability insurance
    • paid leave
    • a retirement plan

    These benefits should take effect when you begin your employment, but, in some cases, there can be a delay before you are eligible for certain benefits. Going without insurance coverage for any span of time can be incredibly risky therefore COBRA costs should be a topic of negotiation.

    4. Where is the tail coverage?

    There is a chance you will get sued after the termination of your employment for an incident that occurred while you were employed with the same organization. If your former employer did not offer you tail coverage in your contract, it is your responsibility to pay for this insurance.

    The cost of tail coverage will vary depending on specialty. However, many times, it is more valuable than a signing bonus and should be reviewed carefully as part of the compensation package.

    5. Unrealistic incentives

    Most employers use some variation of a production bonus structure to reward your productivity. Production bonus systems can be based on the following:
    • Work Relative Value Units (wRVUs)
    • billings, or
    • collections

    There are pros and cons to each of these systems. It is important, however, to ensure that the targets provided are attainable and fair. Having access to market data is extremely useful when negotiating these terms.

    6. Termination language is unclear

    Every contract will feature a termination section that will spell out potential causes for the termination of your employment. This section should not be so extensive as to overwhelm you with what might get you fired. However, it should provide a realistic view of the reasonable causes.

    This sets a clear expectation for how you should practice within the organization’s framework. And, in the event of your termination, it may be useful in filing a wrongful termination suit. The contract should provide termination procedures for both parties to be equitable.

    7. Indemnification clauses

    An indemnification clause is a contract clause where one party is responsible for losses incurred by another party – in this case, the organization employing you. Indemnification clauses are important. They should be reciprocal for both parties in the contract.

    Your employer will not want to be responsible for losses caused by your negligent actions. And, you should not assume the risk for their negligence either. Try to negotiate your way out of a one-sided indemnification clause which may make you responsible for damages which your malpractice insurance cannot cover.

    8. Intellectual property

    Do you have an interest in developing intellectual property? What about creating a social media following? Your contract terms should be clear about whether the employer has any right to the ownership and revenue derived from the creation of intellectual property by you during the term of your employment.

    The bottom line

    Whether you are negotiating your first employment contract or your 10th, it is important to read the fine print of the contract and seek expert legal advice if any part of it is unclear.

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