Physician Employment Contract Review: Critical Red Flags You Need to Know
Physician employment contracts are fundamentally different from standard contracts. This guide covers non-compete scope, productivity-based compensation, malpractice tail coverage, call schedules, and other physician-specific red flags that could cost you your career.
Physician-Specific Red Flags
Watch for: non-competes (2-3 year geographic restrictions), productivity-based pay (incentives to overbook), malpractice tail coverage (who pays when you leave), call schedules (night/weekend expectations), RVU targets (revenue generation pressure), credentialing delays (delay before patients assigned), termination without cause (90-day notice, but what happens to your practice).
Non-Compete Clauses for Physicians
Physician non-competes are aggressive: 2-5 year restrictions, 50+ mile radius, broad specialty definitions. This restricts where you can practice after leaving. Negotiate: shorter duration (1 year max), smaller radius (10-20 miles), narrow specialty definition, geographic exceptions (academic centers, military).
Compensation & Productivity Clauses
Physician pay often includes: base salary + productivity bonus, RVU targets (relative value units - a metric of billable services), incentive structures (more patients = more pay). Red flags: unrealistic RVU targets, clawback of bonus if you leave mid-year, productivity penalties if you take vacation.
Malpractice & Tail Coverage
Critical for physicians: Does employer cover malpractice insurance while employed? Who pays "tail coverage" (insurance after you leave - can cost $20K-100K+)? Standard: Employer covers during employment, you pay tail upon departure. Negotiate: Employer covers tail, or provides tail coverage fund.
Termination & Credentialing
Physician termination issues: Notice period (typically 90 days, but enough time to transition patients?), credentialing timeline (how long before new employer credentials you?), patient panel assignment (when do you get patients?), restricting privileges (does old employer prevent you from getting privileges at new location?).
Frequently Asked Questions
How bad are physician non-competes?
Very bad if overly broad. 2-3 year, 50+ mile radius means you can't practice medicine for years in your region. Negotiate aggressively: 1 year max, 10-20 miles, narrow specialty definition.
Who pays malpractice tail coverage?
This is critical. Standard: You pay (can be $20K-100K+). Better: Employer pays. Best: Employer provides tail coverage fund. Negotiate this heavily - it's a major expense.
What RVU targets should I expect?
Depends on specialty. Ask: What did previous physician in this role achieve? What's the range (high/low performers)? Are targets realistic? Unrealistic targets = pressure to overbook or work unsustainably.
Related Articles
Ready to Review Your Contract?
Upload your employment contract now — get your free risk assessment in 60 seconds. Full report for $19.
Drop your contract here
PDF, DOCX, DOC · Free preview · $19 full report