Do You Really Understand Your Contract?

6 minute read

6 minute read

Employment contracts are definitely a big and complicated topic, and for that reason many residents or physicians with new contracts choose to work with attorneys that specialize in physician contract review.

Employment contracts are usually written in legal language that few speak, and are designed to protect the employer (sometimes at the expense of the physician). This post will give you a primer about physician employment contracts, but don't hesitate to contact a professional if you have any doubts regarding your contract!

1. Knowing the nature of physician employment contracts

Contracts are agreements between two parties to fulfill duties and convey value to the other party in return. Physician employment agreements can be especially complex. They are legal documents that set the stage for your financial future.

The institution that drafts the contract inherently creates it with its own interests in a primary position. As this is the inherent nature of contracts, you should analyze your contract critically to avoid unwanted restrictions or lack of desired incentives. Understanding the fundamental nature of contracts is important as you go on to evaluate, review, and negotiate your offer.

2. Understanding the offer

While many physicians will focus mostly on the offered income, it is not the only important aspect in the contract! Focusing on income alone, while understandable, can lead to a less comprehensive view of the offer. While you’re sure to take into account the financial components like compensation and benefits, don’t forget about the intangible factors like location, reputation, partnership opportunities, and favorable call and other duties. Considering the entire contract holistically will help you in your negotiations and your decision to accept.

As you go through the offer, make sure you do so with a magnifying glass in order to ensure that you truly understand all of the fine print. The devil is in the details, and the risks are high if you don't understand what you're signing! There may be language about things that you might not think about or pick up on, related both to financial details and job requirements. And make sure to review business issues as well, like practice buy-in, profit-sharing, and non-compete clauses.

Don't hesitate to ask questions of an attorney if you have any, since much of the contract will be difficult to understand unless you have tons of business experience or coursework in contract law. A physician contract review attorney will also be able to let you know how your contract compares with others that they have seen, which will give you a leg-up in negotiations. If there is less room for negotiation in your contract, it is still worthwhile to have your contract laid out so that you have no surprises later.

3. Negotiating the offer

Don't hesitate to ask for more time to review! Don't give in to the urge to sign your contract right away in order to appear agreeable. The consequences of not carefully reviewing and negotiating your contract may change the course of your entire career.

As you decide what points to negotiate, make sure to carefully consider what you are and are not willing to compromise on. If you are working with a physician contract attorney, they can help you decide which elements may be worth attempting to negotiate and what precise offers or counteroffers to make. An experienced attorney can help soften or remove language about things like non-compete, time-to-partnership, and buy-in costs.

If you haven't heard about what a physician non-compete clause is, it's best to learn about it before you sign your next contract. If you're a physician, it could impact who you are able to work for should you choose to leave your current practice.

What is a Physician Non-Compete Clause?

A physician non-compete clause puts limits on where you can work should you leave your practice. In essence, it is designed to protect the employer from you joining a close competitor immediately after your departure from their practice. Most generally bind you to not working in a certain geographical area for a specified amount of time (ex. prohibited from practicing within a 15 mile radius for 2 years). This can greatly affect your future plans and should be carefully reviewed by yourself or a physician contract attorney.

The Devil is in the Details

Whenever signing a contract, particularly one as in depth as a physician contract, there can be many details to wade through. There are the obvious things like compensation and benefits, but there will most likely be a physician non-compete provision lurking in your contract. Just so you understand, the physician non-compete provision can vary by state and, depending on where you live, your state might not even recognize a non-compete clause within a physician contract. With the amount of details involved, getting your physician contract reviewed before signing on the dotted line is an important risk mitigation practice.

Responsibilities & Duties

Nearly all physician contracts provide a list of required duties and responsibilities. This section is often overlooked by physicians, as you may view is at simply a job description. And after working as a resident and possibly a fellow, the description may seem fairly self-evident.

But instead of viewing it as the duties and responsibilities section, a better way to consider it is as a list of affirmative obligations because they are the core functions of both the job you are being hired to do and how you will be expected to do it.

What are your obligations to your employer?

These provisions set forth the physician’s duties and responsibilities to the employer. What you are required to do, where, and how they will be expected to perform go beyond a simple job description to being a crucial aspect of any physician employment agreement.

It is imperative to read through every provision of this section as it is very difficult to get out of these affirmative obligations once you have signed without being held in breach of contract. A detailed list of the specific proposed duties should be negotiated and clearly articulated in the employment contract.

These duties can include appointment hours, hospital rounds, office duties, call schedule, medical record documentation, and review of tests and lab results.

What else you should consider

Additional questions to think about as you determine the employer’s expectations are the availability of nurses and support staff, and whether call coverage is equally divided among physicians. As a newer physician, you may be expected to carry a heavier call burden unless that expectation is not clearly debunked.

In addition to determining exactly what you are obligated to do, you should examine what you are allowed to do outside your employment contract. Contracts may specify some level of exclusivity, regarding teaching, doing research, or providing expert testimony.

A contract may provide that if you do perform outside work such as teaching or research that any compensation you earn for those services goes to your employer rather than you. If you want to perform outside work, make sure that your contract’s language provides that the compensation will actually go to you and not to your employer.

If you are in doubt regarding any aspect of your affirmative obligations, using the services of a contract attorney will ensure that both you and your employer are clear on the duties and responsibilities that you will be expected to perform as a condition of employment.

To help you better understand this part of your physician contract or the offer as a whole, contact one of our advisors today. Contact us to get a custom quote.