What’s Missing From Your Physician Employment Contract?

By: Chase Howard

The average physician employment contract exceeds twenty pages, not including exhibits. While they all include basic terms related to compensation, length and restrictions, many simply do not contemplate important terms that have serious impacts on physician’s daily lives. A physician’s first employment contract is the most significant financial decision of their lifetime. The same can be said for each subsequent contract, which means that understanding, and negotiating, your contract is the most valuable investment you can make prior to entering into a contract.

To understand what’s in your employment contract, simply read it over a few times. To understand not only how those terms affect you, but also what isn’t in your contract, hire an experienced health care lawyer.

While it’s important to understand what is in your physician employment contract, it’s equally as important to know what is missing from the contract and what to ask in regards to what is included. The below list considers terms that are important both during and after employment.

The following are nine items you should consider when reviewing your physician employment contract:

1. Pro-Rated Compensation – In the event of an early termination, is your compensation or production bonus paid to you on a pro-rated basis? Many employers will withhold such compensation after termination.
2. Administrative/Supervision Duties – Aside from providing quality medical care, what else is expected of you? Are you responsible for any administrative or marketing duties? Are you responsible for supervising mid-level providers? These issues tend to come up during the term of the contract, leading to disagreements and disputes about responsibilities.
3. Partnership Track – While asking for partnership in your first employment contract may not be reasonable, it is perfectly reasonable to ask your potential future employer about the requirements for partnership or ownership. Rather than wait for three years to conclude and negotiate a new contract, set some guidelines to discuss the possibility of partnership with a loose timeline to follow.
4. Tail Coverage – Many contracts contemplate which party is responsible for the cost of professional liability insurance. Not as many discuss “tail” coverage. More significantly, few consider which party should be responsible based on the type of termination, or even if there is a breach of contract.
5. PTO and CME – While many contracts provide a detailed list of benefits, it is rare to see whether or not a physician can use PTO or CME time off/funding during a termination notice period.
6. Definitions – No two contracts are the same. Accordingly, every employer has different definitions and meanings for certain terms. Getting a clear understanding about confusing terms can be the difference between a pleasant employment experience and an unexpected early termination.
7. Pending Litigation – Do you want to enter into a company with lingering and existing problems that may impact your career early on?
8. Intellectual Property/Invention – You want to ensure that anything you create, develop or invent on your own time and with your own funding remains yours and will not become property of the employer.
9. Day to day – Simple things such as lunch schedule, goals and expectations of the employer, training on EMR and systems, marketing, chart audits and other every day tasks that are over looked. Asking questions about these items helps ensure a smooth day to day for the physician and employer.

While these are simply a few considerations, many more terms and items in an employment contract can impact the success of a physician.