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Key Elements of Physician Contracts

Key Elements of Physician Contracts

Clearing all the hurdles of the job search process is no small feat, but there is one last important step to ensure your prospective job meets your needs: negotiating the contract. The contract includes important details regarding your compensation, benefits, termination language, work schedule, restrictive covenants, and malpractice tail coverage.


Make sure the compensation you are being offered is commensurate with your skills and experience. It is especially helpful to look at physician compensation reports for certain specialties, such as this report here. And if an employer offers incentive pay, look closely at the stated requirements to receive such pay.

Specific requirements pertaining to productivity, collections, and quality may also affect your compensation and should be included in the contract as well.

Once you have an idea of the salary range being offered, try to guarantee your salary for a sufficient amount of time to allow your practice to build. Most practices take at least 12 months to build sufficient volume.

Work Schedule

It is very important that your work schedule and call coverage are clearly outlined in your contract. Potential employers will often try to give you the flexibility to adequately meet your patient and practice’s needs and any initial promises from your employer about your schedule should be explicitly written in your contract.

If you can, try to find out information about the typical on-call expectations of other physicians within your specialty to ensure that you are not being scheduled for more call coverage than other physicians on similar contract terms. If the needs of your family require a non-traditional work or call schedule, this should be explicitly stated in the contract.

Lastly, you will want to know whether there is additional pay for being on-call or if there are already certain on-call expectations built into your compensation.


Benefits can be worth thousands of dollars a year, so it is important to understand the scope and effective date of the benefits offered. There are several types, including health insurance, relocation, continuing education reimbursement, and retirement. One essential benefit is professional liability coverage. This will protect you in the event a patient is harmed while under your care.

There are typically two types of professional liability coverage offered, “occurrence-based” and “claims-made.” Occurrence-based policies cover you for incidents that happened during the coverage year, regardless of when the claim is filed. Claims-made policies cover only claims filed during the year of coverage, which requires malpractice tail coverage for when your employment term ends.

Malpractice Tail Coverage

Malpractice tail coverage is an extended reporting period endorsement, offered by a physician’s current malpractice insurance carrier. This plan allows an insured physician the option to extend coverage after the cancellation or termination of a claims-made policy.

Make sure that you know which party is responsible for the tail coverage. Usually it is advisable to try to negotiate for the employer to be responsible in the event of a “without cause” termination (which we will discuss later) or if the employer does not renew your contract.

While occurrence-based coverage is often the preferred professional liability coverage, having claims-made coverage along with malpractice tail coverage will essentially cover you the same way.

Termination Language

You may envision working with a certain organization for the rest of your career or maybe only for a couple years. Regardless, it is crucial that you understand the length of your contract and when you can or cannot leave your position.

Nearly all physician contracts will feature conditions under which an employer can terminate employment for cause. Typically, a contract will also feature a “without cause” provision that allows both you and the employer to end your employment without cause if a written notice is delivered beforehand. This notice generally must be delivered anywhere from 60 to 120 days before the termination date depending on requirements outlined in the contract.

Restrictive Covenants

Restrictive covenants, also known as non-competes, are in place so that you cannot practice as a physician within the same “market” as your previous employer for a certain period of time. These restrictions are in place so that the employer can protect their commercial interests.

This prohibited practice area could be anywhere from a couple miles in an urban area to hundreds of miles in a more rural location. The contract should also feature a precise amount of time that the non-compete agreement will last.

Additionally, you should try to make sure that there are certain limits in place as to what situations post-employment restrictions can be enforced.

Navigating the Key Elements

As you can see, there are many different components of the physician contract with numerous variables within each component. Having an attorney review and negotiate your contract can be immensely helpful in this process. Resolve’s attorney team has reviewed over $1 Billion in physician contracts with over 80% of clients seeing an increase in the value of their contracts.

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