6 questions to ask before signing a physician employment contract

Whether you are signing your first physician employment contract out of residency or fellowship, or making a mid- or late-career change, the AMA has gathered great advice to help ensure that you do not overlook contractual details that can have a big impact on your earnings, benefits and well-being. 

The first season of the “AMA Making the Rounds” podcast focused on the complexities that doctors confront while negotiating a physician employment contract. Throughout the six-part series, Wes Cleveland, a senior attorney for the AMA, offers a road map for successful contract negotiations.

What are the parts of a contract a physician must consider and how should they approach them? Cleveland offers advice on those questions in transcripts from the “Making the Rounds” podcast, one of the original AMA podcasts that offer compelling research, discussions, opinions and more.

1. What should you look for in pay and benefits?

   1. The key elements to physicians’ compensation, according to Cleveland, include possible signing bonuses, relocation expenses, fringe benefits and compensation methodologies, which translate to how you will get paid as an employee.

2. What should you know before you sign?

   1. An employer’s long-term and short-term business plan, leadership stability, employee turnover and your non-clinical obligations, as a potential employee, are aspects of employment of which you should have an understanding before you sign a contract.

3. What type of restrictive covenants are in place?

   1. Post-employment, a restrictive covenant provision, often referred to as a “noncompete” clause, places limits on where you can practice medicine and for how long. Understanding what triggers that provision is a necessity.

4. What is covered in the letter of intent?

   1. The letter of intent will outline elements of employment, such as the duration of the initial employment term.

5. What is your employer expecting of you?

   1. There should be no ambiguity. Understanding when you are going to be on-call, how much direct patient care you will be providing and, even, what constitutes full-time employment should be spelled out in your contract.

6. How should residents approach interviews and negotiations?

   1. During the contract negotiation stage, Cleveland recommends residents make a list of things they’d like to have and things they must have. Be prepared to give away a few of your like-to-haves during negotiations.

The AMA Transition to Practice series has guidance and resources on deciding where to practice, negotiating an employment contract, managing work-life balance, and other essential tips about starting in practice.

The Annotated Model Physician-Group Practice Employment Agreement (PDF) and Annotated Model Physician-Hospital Employment Agreement (PDF), both free to AMA members, help you understand contracts. Each resource teaches you to:

• Read and understand what contracts look like.
• Define common contract terms.
• Understand compensation models and benchmark data.
• Recognize fair benefits and compensation packages.
• Explain the business/legal consequences of contracts.
• Discuss working conditions, liability insurance and restrictive covenants in your contract.
• Understand what happens if the contract is terminated.

Find out more from the author of the guide to hospital employment contracts, Elizabeth A. Snelson, president of Legal Counsel for the Medical Staff PLLC.

“I know employment contracts are boring,” Snelson told the AMA in a recent interview. “But if you don’t get yours the way you want it, it could clash dramatically with what you thought you’d be doing with your life.”

Learn more with the AMA about understanding physician employment contracts.