Securing a fair and comprehensive employment agreement is critical for both Medical Doctors (MDs) and Doctors of Osteopathic Medicine (DOs). Whether you’re a physician entering a new role or an employer drafting a contract, understanding the nuances of these agreements ensures clarity, protects rights, and fosters a positive professional relationship.
In this guide, we’ll break down the essential components of an employment agreement for MDs and DOs, offer actionable negotiation strategies, and highlight common pitfalls to avoid.
Why Employment Agreements Matter for Physicians
Employment agreements for physicians are more than just formalities—they’re legally binding documents that define your professional journey. For MDs and DOs, these contracts outline compensation, responsibilities, malpractice coverage, and post-employment restrictions. A well-structured agreement:
- Safeguards against misunderstandings.
- Ensures compliance with state and federal regulations.
- Protects both parties’ interests in case of disputes.
While MDs and DOs share similar scopes of practice in many states, their employment agreements often follow comparable structures. However, osteopathic physicians may negotiate terms related to osteopathic manipulative treatment (OMT) if applicable.
Also Read: The Fine Print of Family Ties in Healthcare Compliance
Key Components of an MD or DO Employment Agreement
1. Position and Responsibilities
Clearly defined roles prevent future conflicts. This section should specify:
- Job Title and Specialty: e.g., “Cardiologist” or “Primary Care DO.”
- Clinical Duties: Patient load, call schedules, and administrative tasks.
- Practice Locations: Whether multiple sites (e.g., hospitals, clinics) are involved.
Pro Tip: Ensure the agreement allows flexibility for evolving healthcare needs, such as telemedicine services.
2. Compensation Structure
Compensation models for physicians vary widely. Common structures include:
- Base Salary: A guaranteed annual income.
- Productivity-Based Pay: Bonuses tied to Relative Value Units (RVUs) or patient revenue.
- Profit-Sharing or Equity: For roles in private practices or partnerships.
Example: A DO might earn a 250,000 basesalaryplus 15500,000 annually.
3. Benefits and Perks
Beyond salary, benefits significantly impact job satisfaction. Key inclusions:
- Health, Dental, and Vision Insurance
- Retirement Plans: 401(k) or 403(b) with employer matching.
- Paid Time Off (PTO): Vacation, sick days, and continuing medical education (CME) leave.
- Signing Bonus or Relocation Assistance: Common for high-demand specialties.
Negotiation Insight: Employers may offer student loan repayment assistance to attract early-career physicians.
4. Malpractice Insurance
Malpractice coverage is non-negotiable for physicians. Contracts should specify:
- Type of Coverage: Claims-made vs. occurrence policies.
- Tail Coverage: Who pays for extended reporting if the policy ends.
Critical Note: Without tail coverage, you could face liability for past treatments after leaving the job.
5. Termination Clauses
Termination terms dictate how either party can end the agreement. Key details:
- Notice Period: Typically 60–90 days.
- With-Cause vs. Without-Cause Termination: Define acceptable reasons for immediate dismissal (e.g., license revocation).
Red Flag: Avoid vague language like “failure to perform duties,” which could be misused.
6. Non-Compete and Restrictive Covenants
Non-compete clauses restrict where you can work post-employment. Key considerations:
- Geographic Scope: A 10-mile radius is reasonable; 50 miles may be excessive.
- Duration: 1–2 years is standard.
State Laws Vary: California bans non-competes, while Texas enforces them strictly. Consult a lawyer.
7. Confidentiality and Intellectual Property
Protecting patient data and practice innovations is critical. Ensure the agreement:
- Complies with HIPAA regulations.
- Clarifies ownership of research, patents, or medical protocols developed during employment.
Negotiation Strategies for MDs and DOs
1. Consult a Healthcare Attorney
Never sign a contract without legal review. Attorneys specializing in physician agreements can:
- Identify unfavorable terms.
- Ensure compliance with Stark Law and Anti-Kickback Statutes.
2. Prioritize Your Needs
Rank negotiation points by importance:
- Must-Haves: Malpractice tail coverage, fair non-compete terms.
- Nice-to-Haves: Signing bonus, extra CME funding.
3. Benchmark Compensation
Research salary data from sources like MGMA or AMGA to ensure competitive offers.
4. Push for Clear Metrics
If bonuses are tied to productivity, demand transparent formulas (e.g., $50 per RVU).
5. Limit Liability
Negotiate caps on potential damages for contract breaches.
Common Pitfalls in Physician Employment Agreements
1. Vague Language
Ambiguities in duties or compensation can lead to disputes. Insist on specificity.
2. Ignoring State Laws
Non-competes, licensing, and malpractice rules vary by state. Verify enforceability.
3. Overlooking Restrictive Covenants
A poorly negotiated non-solicitation clause could bar you from contacting former patients.
4. Failing to Plan for Termination
Understand severance terms and what happens to benefits upon exit.
5. Verbal Promises
Get all terms in writing. Oral assurances hold no legal weight.
Final Checklist Before Signing
- ☑ Reviewed by a healthcare attorney.
- ☑ Compensation aligns with industry standards.
- ☑ Malpractice tail coverage addressed.
- ☑ Non-compete terms reasonable and enforceable.
- ☑ Termination clauses fair to both parties.
Conclusion
An employment agreement for MDs or DOs is a cornerstone of a successful medical career. By understanding its components, negotiating strategically, and avoiding common traps, physicians can secure contracts that support their professional and financial goals. Always invest in legal counsel to ensure your rights are protected—this isn’t just paperwork; it’s the foundation of your future in medicine.
Also Read: AHCA Exemptions in Florida: Key Issues for Healthcare Providers
