How long should a physician take to respond to a job offer? As always, it depends. Let’s go through the job interview process, and then maybe we’ll discuss when would be the right time. Suppose a physician is coming out of training or perhaps in a current job and looking for a better opportunity. In that case, there are several ways you can find a new job. There could be advertisements. Some recruiters will actively reach out to physicians and see if they’re interested in a new position if you have a colleague saying, hey, we have an opportunity. Are you interested? That type of thing.
The Recruitment Process for a Physician
There are two ways it can go from there. There’ll be a discussion with the point person. For a hospital or healthcare network, it’ll be a physician recruiter. Maybe if it’s like a smaller physician-owned practice, it’d be the owner of the practice. They probably have a recruiter on staff if it’s a semi-large physician group. And you’ll talk with them and discuss the position. Then it’ll get a little more serious at some point, and many organizations will send you an offer letter.
What Is Included in the Physician Job Offer Letter?
And so, in a physician offer letter, there will be basic terms. The term of the agreement, maybe how long it’ll take for you to terminate the agreement without-cause and compensation. Perhaps a signing bonus if you’re moving, relocation assistance, and some basic terms. As far as the restrictive covenants go, non-compete, non-solicit, any bonus opportunity, and probably some brief mention of benefits.
That will be in the physician offer letter, and some employers require the physician to sign the offer letter before presenting them with an employment contract. Any physician outside of academia will have to sign an employment contract. And then, the employment contract gets into the specific terms of the employment relationship. The offer letters, think of it like bullet points, whereas the agreement itself, maybe an offer letter is a page or two. The contract could be anywhere from 15 to 50 pages long.
Sign by This Date
Usually, the recruiter, or whoever you’re discussing the position with, will tell you we need this back by this date if you’d like to move forward. The offer letter often states that it needs to be signed by this date. And then let’s say you signed the offer letter, and they present you with an employment agreement. They may tell you. We need you to decide by X date. So, if you have a definite date and they say you need to respond to us by this date, then those are the times that you need to respond to them.
They’re certainly not hard and fast deadlines for the most part. For instance, if you were maybe thinking over an opportunity and were a few days late from providing them with a signed physician agreement or a signed physician offer letter. It’d be unusual for the employer to say, no, you missed the deadline. We’re Yankee in the offer. That is not something that would generally happen.
Why Is There a Deadline to Sign a Job Offer or a Contract?
The employer wants to create a sense of urgency to get a yes from the physician. So they don’t have to keep recruiting for the position. It is somewhat expensive for a firm to recruit a physician using an actual recruiting firm. They want to lock down a job as soon as possible, not have to worry about it. And then can either move on to other physicians or, if they have no more opportunities, they don’t have to consider one more thing.
There will be cases, especially for trained physicians, where a job will reach out to them. Maybe they’ll sign an physician offer letter. Maybe not; not everybody offers offer letters. They may present an employment agreement to the physician. And then just leave it open and say, get back to us when you can, or reach out to us if you have questions.
For Physicians Who Are Still in Training
In that scenario, this strategy comes into play, and this is directed toward people in training. If you lock into a job early, you miss out on any opportunities that may come after that. So, suppose you were to sign an employment agreement and had five more offers that were much better. In that case, you either must think about breaking the contract before you even start or forgo all of those great opportunities. I mean, there’s like a sweet spot. Some people crave security.
When I say some people, I mean those in training who desire the security of having a job, lockdown, don’t have to worry about it, can start prepping for a move, that type of thing. There are considerations involved. Let’s say someone has a family or they’re moving to an area to be near family. They want to get that locked down as soon as possible. And others are just open to the best opportunity. And so they may want to last a little bit longer.
At some point, the employer will give you a drop-dead date, and that’s when you need to provide them with your decision. There’s no reason to wait if you have a job you love, and it’s a no-brainer. They may move on to someone else, or maybe they’re interviewing multiple candidates and waiting to see who will accept the job first. So, in that scenario, there is no reason to mess around if you have your dream job. Get the contract, offer letter reviewed, work out the details, sign the agreement and move on with your life to a better life as a practicing physician out in the world instead of training.
Other Blogs of Interest
- Can you Pull out of a Signed Physician Contract?
- What are Restrictive Covenants in a Physician Contract?
- How to Turn Down a Physician Job Offer?
What to Know Before Signing Your First Physician Contract | Contracts
What should you know before you sign your first physician employment contract? This question is a broad topic, but we’re going to hit the main areas, things to think about before signing your first employment agreement.
Ways to Determine if Compensations Offered Are of Fair Market Value
First, determine whether the compensation you’re being offered is fair market value. There are a couple of, I guess, good ways of going about trying to find that. Well, the MGMA, the medical group management association, collects annual salary data from across the country. If you can access that, they have a lot of good information about total compensation, average net-collections, and average RVUs generated by specialty. It’s hard to get that info sometimes.
I mean, if you Google around, you might be able to find some of the compensation data that’s a couple of years old. Or you can talk to someone who has access to the data, like for our firm, we have access to the data. So, we can tell the physician exactly what the numbers say. Now, that’s certainly not the be-all-end-all. There are other services out there that offer something similar. But I also think it’s limited because some specialties have a tiny sample size. In addition, just total compensation should not be the determining factor when looking for a job. Alright, so that’s compensation.
Another way of thinking about it would be, if you have classmates in your training program, you need to ask them what they’re receiving. It’s going to vary based upon geography and then setting. Are they going into a hospital network? Are they going into the federal facility? Or are they going into private practice in some way? It is good to speak to people you train with to see what they’re being offered. And then mentors are another excellent place.
How To Terminate Employment Contracts
If someone is already out and maybe they’ve been a teacher for you or a mentor, ask them if they’re willing to talk about the type of compensation they’re receiving. Next would be how to terminate the agreement. Something you need to consider. There are four ways to terminate a contract if the initial term ends. Let’s say you have a two-year contract, and no language states it automatically renews. It just ends, and the contract terminates. You can complete a contract by mutual agreement. Then you can also terminate a contract with-cause. So if one of the parties breaches the contract, either party can terminate the contract if the other party doesn’t fix the breach. It’s called cure. And then lastly, and this is what I want to hit on, is without-cause termination.
Every contract you sign must have without-cause termination in it. There are minimal circumstances where no without-cause termination would be okay. If you’re a J-1, that one would probably benefit you not to have that in there. But without-cause termination means you can terminate the contract at any point, for any reason, with a certain amount of notice to the other party. Contracts that don’t have without-cause termination, meaning you must work out whatever the initial term is. There’s no way of terminating the contract for any reason. They would have to breach it if you wanted to get out of it.
Why Do I Need No Cause Termination on My Contract?
The reason why you need that is, let’s say you start with the job, you’re paid on productivity, and the volume is not there. It’s not your fault, or maybe the employer brought you in telling you it was going to be one way, and the call is just excessive. Or perhaps it’s just a terrible personality fit; whatever reason you’re not happy in that job, you need the ability to get out of it if you want. So, it would be best if you had without-cause termination in the medical contract. Somewhere between 60 to 90 days is standard for physicians.
Legal Mistakes Physicians Make are not going through Non-Compete.
Alright, next, the non-compete. A non-compete says the physician can’t work after the contract terminates for a period within a specific area. For example, most non-competes are one year, sometimes up to two.
And then, a reasonable mileage would be 10 to 15 miles from your primary practice location. Often, the employer will try to tag multiple locations. So, maybe if you worked in three outpatient clinics in a hospital or something. They try to attach it to all four of those, or perhaps the employer has many facilities in the area. You’ve only worked at one of them, and they might try to attach it to all the facilities they own. That’s not fair either. You want to try to get it to one year, 10 to 15 miles from maybe at most two locations. Anything beyond that would be considered unreasonable. There are a few states where it’s entirely unenforceable to have a non-compete. But for the most part, most states allow non-competes for physicians.
Health Care Malpractice Insurance, Do Not Practice-Without It
Lastly, with malpractice insurance, the employer should almost always pay for your underlying annual premium. How much they must pay each year to insure you? Depending upon the policy, whether it’s a claims-made or an occurrence-based approach, it will determine if you must pay what’s called tail insurance.
If it’s a claims-made policy, tail insurance is necessary. A good rule of thumb is that tail insurance costs about twice your annual premium. In some specialties, it can be costly. OB-GYN, some of the higher-level surgical things could have tails that are fifty to a hundred thousand dollars. You want to avoid having to pay for that. So, make sure that there’s either a fair split between the employee and employer or having the employer pay the total cost of the tail insurance, or there’s also insurance called occurrence-based coverage. And in that scenario, tail insurance is not needed at all. It’s about a third more expensive than claims-made, but you won’t have to pay for tail insurance in that scenario.
Now, you probably need to think about dozens of other things. I would say, in my mind, those are probably the foremost important. But you have benefits, bonus structure, medical contract length, other restrictive covenants with the non-solicitation agreement, non-disparagement, confidentiality, your hours worked, and the call. I mean, you need to think about a ton of things. So, I would suggest reaching out to someone with experience reviewing contracts. I mean, when you’re signing a medical contract that could be worth a million dollars, at least in my opinion, it would be foolish not to get it looked at by someone who knows what they’re doing.
Can You Reject a Letter of Intent? | Offer Letter Rejection
Can you reject a letter of intent? The quick answer is yes. You certainly can, and should, if you’re unhappy with the terms of it. A letter of intent, also known as an offer letter, can be provided once negotiations or discussions about a position move forward. Normally, it would work if a potential candidate would find out about a job. Either through a job listing or word of mouth or maybe they were reached out through a recruiter. There’s a discussion of the main point of the position. Like the salary, benefits, that type of thing, and location. And once there’s interest on both sides, many employers will offer the letter of intent or the offer letter.
And that is a description of the main points of the employment relationship. In most offer letters, there will be the start date, location, and contract length. This is called the term, maybe a brief discussion on how both parties can terminate the contract, compensation, so is there a base salary? Are there bonus opportunities? Is it net collections, or commission-based RVUs? It would be a brief description. It wouldn’t go into a long four paragraphs about comp. If malpractice insurance is necessary, who pays for that, and then who pays for the tail insurance if that’s necessary? Are there restrictive covenants? The restrictive covenants are normally a non-disparagement, a non-solicit, a non-compete, and it might go through briefly like this is how long go last.
What Is Inside an Offer Letter?
And maybe this is the geographic restriction associated with the non-compete and then a brief description of the benefits like health, vision, life, dental, disability, retirement, and maybe expenses. What expenses is the employer going to pay for? That’s what would normally be in an offer letter. The candidate, when viewing this letter, if the terms of it are unfavorable, or maybe not what the candidate was looking for, they can say, no, I’m not interested in this. I’m not going to sign this. I wouldn’t suggest just saying, no, I’m not taking this job. Take a hike. It would simply make sense to counter. You can say, I’m not going to sign this offer letter. However, these things would make this opportunity good for me.
So, if you’re offering a 200-base salary, then maybe I want 250 or a signing bonus of 10,000, and I want a 20,000-signing bonus. And will you provide relocation assistance if I move into a new city? These are all things that employees should do at this stage. And even though a professional gives an offer letter. It doesn’t mean that’s the end of it. And then, even further, if you come to terms with the offer letter, what will then follow will be an employment agreement. Even if you sign another offer letter unless there’s the language that says this is a binding offer letter. You can change no terms, which you will never see. Once you get the employment agreement, you can still negotiate terms.
Why Is it Important to Understand the Industry Standards?
So, you need to think strategically, alright? I would suggest never signing an employment agreement that you’re unhappy with. Even if you reject the offer letter and decline the employment agreement, it doesn’t mean that the negotiation is over. Suppose the professional is reasonable in what they’re asking for. In that case, I find most employers expect at least some negotiation when they’re bringing in new candidates. I mean, it is the expectation. But once again, if they’re reasonable.
Suppose someone is asking for a 200% increase in base salary. In that case, the employer is likely going to, look, you are delusional, and we will move on to a different candidate. So, it helps the professional understand the industry standards in their profession. That way, they can ask for reasonable changes to the contract. There are also many times when you’ll get brief details in the offer letter. Then when you see the actual written language in the agreement. It substantially changes what it looked like in the offer letter. Maybe if it just briefly mentions there will be a non-compete. Once you review the employment agreement, it’s a terrible non-compete.
Maybe you are expecting a one-year non-compete, and they offer three, or you’re expecting a small geographic radius of 10 miles. They came back with a hundred, or something like that. That can change from “yes, this is a great offer” to “there’s no chance I would ever accept this job.” So, there can be negotiation throughout the process until the professional signs the employment agreement. At that point, those are the terms. It would be best if you made certain before you sign anything that you’re okay with what is in agreement. Then understand there will be obligations after the employment relationship ends.
Physician Contract Questions?
Contract Review, Termination Issues and more!