Hi, My name is Robert Chelle with Chelle Law, and my firm assists physicians with employment contract issues. Continuing in my series of casual chats on a specific topic, today I’m going to talk about how long are most physician contracts. It varies greatly, but usually, somewhere between one to three years is a normal initial length of a physician contract. However, and this is the important part, is that nearly every physician contract, except for a J one agreement, can be terminated without cause which means either party can terminate the agreement with a certain amount of notice to the other. Kind of the entry standard is between 60 to 90 days. So, even if a physician has, let’s just take, for example, a two year contract, if it has a six-day without cause termination clause in it, it’s a 60-day contract effectively.
Average Physician Contract Length
There are also some considerations if the physician decides to terminate the agreement without cause. One, are there any repayment responsibilities? Let’s say a physician has a three-year initial term and they were given a signing bonus, relocation assistance, maybe student loan repayment. There usually would be some kind of language that states that if they terminate the contract before the end of the initial term, they would owe some kind of repayment on those bonuses. And usually, it’s prorated. It’s not an all-or-nothing thing. For instance, since we’re using a three-year term, they would say one third is forgiven each year. So, if you had a $30,000 signing bonus, $10,000 on year one would be given, then $10,000 on year two. And then let’s say you left sometime in between the second and third year. Then you would owe them back $10,000, who pays for malpractice insurance.
An Employment Agreement Term for Doctors
If the contract is terminated without cause, the restrictive covenants will apply. To be honest, the initial term is not that important. Most contracts also have language in them that states that the contract will automatically renew for one-year terms after the initial term expires. That’s pretty standard as well. Rarely would a contract just end. It would always automatically renew. If the contract just has a fixed term, meaning, it will not automatically renew. Then, usually somewhere between 60 to 90 days before the end of the term, the parties would meet and then discuss whether they want to continue on or not. Especially as a physician, continuity of care is important and that’s why they have notice termination provisions in the contract, so that a physician can’t one day state, Hey, I’m leaving.
Physician Employment Contracts
I won’t be in tomorrow. Obviously, if they have patients scheduled, or if they need to offload all of the patients, new providers, some kind of notice needs to be provided to make that a smooth transition and assure that continuity of care is being provided to the patients. So, as far as how long a contract is, as I said before, one to three years. However, almost any physician can get out of the contract with a certain amount of notice. If you have any questions about a physician contract, maybe you’re entering into a new agreement, you’re coming out of training, or perhaps you’re in a current agreement and you want us to take a look at the contract. We’re happy to do that.