How to Accept a Physician Job Offer?

How to accept a physician job offer? Kind of a simple topic, but it does come up occasionally. Someone says, alright, how am I officially attached to this job? There are two documents that matter in this scenario for a physician. Often, the physician will receive an offer letter or a letter of intent, which describes the basic structure of the contract. In the offer letter, it will usually state:
- This is your salary
- Here’s how your bonus
- Some of the benefits that the physician will receive
- How long does the contract last
- Some basic terms for the non-compete the non-solicit
- Signing bonus relocation assistance.
Those are the things that are in the offer letter. And in that case, the lawyer will then say we need to agree on the essential basic terms of the agreement. You sign the offer letter. At that point, we will draft the employment contract and send it to you for review. Is the offer letter binding? No, it’s not. In some very limited circumstances, if there is language in the offer letter, it could be Bonnie, but for the most part, no, not, it’s not there. There are many times when the basic terms of the offer letter are the same in the contract. Still, the language in the contract makes that contract terrible for the physician.
Check on the Non-Compete
For instance, maybe the non-compete is not listed in the offer letter. Read the contract. It’s a restrictive non-compete that may force someone to leave a city they cannot. In that case, if the physician reviews the employment contract and decides that this is not something they’re interested in. They can start negotiating with the employer. The employer won’t make the necessary changes for the physician to be comfortable in that position. The physician can say, okay, I know I signed the offer letter. I understand that, still, after reviewing this employment agreement. This is not something I’m comfortable with or willing to move forward on. The physician would say, I’m not signing the employment agreement unless you make changes.
Chelle Law will provide a physician contract review. Identify areas we could improve and assist you in negotiating the best contract possible.



Signing an Agreement as Acceptance of the Job Offer
If the employer says we’re not making the changes, the parties can agree to disagree and move on. And the physician is not bound to contract terms because they’ve only signed the offer letter. So, how to accept the job? You sign the agreement. That’s simple. Once again, if you’ve provided the offer letter. You may get stuck over some terms. Then they offer the physician the actual employment agreement. The physician is not necessarily bound to the terms of the offer letter. As I said before, things can change that. Maybe the offer letter job looks great. But when you get into the minutia of the contract details, it’s not so great.
You can still negotiate terms for the employment agreement. That is even if you agreed to some of the terms in the offer letter. But let’s say they get the employment agreement. Maybe the physician and the employer go back and forth and decide where they’re both happy.
The way to accept the job offer is to sign the agreement. I had a recent scenario where a physician received a job offer. I went in, interviewed, and saw the clinic, the hospital, and everyone involved. Everybody was happy. He made plans, and his wife accepted a job in the city. They gave him an employment contract to review and then took away the offer out of the blue.
Offer Letter Is Not a Guarantee
In that scenario, it’s a tough place. It does not happen very often. But in that case, the physician was out of luck. There could be claims for what we’d call promissory estoppel. They relied upon the acceptance of the agreement or the offer, like their wife got a job. They were planning on moving. Things happen, but unfortunately, the business climate can affect things. And then, the employer can take the offer away at some point. Even if the employer has verbally said, we are offering you this job, and the physician says, yes, I accept this job. Still, they haven’t signed any employment agreement. It’s just not going to hold any water.
So, to accept a physician job formally, you need to execute the employment agreement between both parties, the physician and the employer. And then, at that point, the parties are bound to the terms of the agreement.
Other Blogs of Interest
- How to Turn Down a Physician Job Offer
- Can a Physician Sign Multiple Letters of Intent?
- Negotiating a Physician Signing Bonus
Can a Physician Back Out After Signing an Offer Letter?
What happens if I sign an offer letter but don’t want to go through with signing the actual contract? Due to a change in circumstances, or family issues, maybe you got a better job offer elsewhere. Perhaps you decided to move home instead of moving to a different city. The question is, can a physician back out after signing an offer letter? The short answer is yes, probably, unless there’s binding language in the offer letter, which there seldom would be. The physician can back out. The offer letter has some basic terms.
Signing With a Physician Practice
Usually, it would be like, okay, here’s what your compensation is. Maybe a brief review of benefits, the term length. Things on how to terminate the contract and a brief mention of a non-compete. It is normally like a one-page document that briefly describes what it will look like for your employment. There are times when I’ll have a physician get an offer letter, and just the kind of cursory terms look great. And then, when we get the actual agreement, it could change whether it’s a good offer or not. And so, until the employee signs an agreement, it will not be a binding document. Let me give some instances of maybe why the job opportunity looked okay with the offer letter. Still, once we got the actual employment agreement, it changed.
One thing could be how to terminate the agreement. I would say it’s probably rare to put into an offer letter. Typically, a physician would have to provide 60- or 90-days’ notice to terminate the contract without-cause. They can get out of the agreement for any reason with the amount of required notice. Let’s say the contract had a 12-month without-cause termination notice. Well, nobody wants that. Once you give notice, relationships change within the organization. You’re on your way out. You’re no longer building a practice. If someone had a 12-month requirement, there’d be an entire year of potentially awkward relationships. I would never suggest that a physician would have to give a year’s notice.



Physicians With a Letter of Intent
On the back end of that, you must give 12 months’ notice if you’re currently in practice. Very few practices are willing to wait 12 months for the physician to give notice and be able to leave. It just doesn’t happen that way. Sometimes, if the physician is in training and an organization forecasts that they will need them a year or two, that’s a different story. But if a physician is currently practicing and switching to a new job, they’re seldom going to wait two months.
Another thing could be the terms in the non-compete. Maybe you’re expecting a reasonable non-compete like one year, 10 miles from your primary practice location. The reasonableness of non-competes varies from state to state. Pretty much is one of the only things that vary in physician contracts. Let’s say, for instance, it’s one year, 5 to 10 miles from your primary practice location.
That’s what you’re expecting. And then you get the contract, and it’s a two-year non-compete. And 25 miles from every location you practice in a while employed with the employer. That can change things substantially. Suppose someone is married to a town where they grew up there. In that case, the family’s there. They want to raise their kids there. Then they have some terrible non-compete. Forcing them to move for a period that can make a great offer a terrible one. And that’s a term that could change. That’s not explicit in the offer letter that could then make a great offer a bad one.
The Earlier the Notice, The Better
Generally, there’s no specific recitation of all the benefits offered. What if the employer doesn’t offer health coverage, disability, or life or retirement? They won’t pay for your medical license and DEA registration. They won’t give you anything for continuing medical education. Perhaps the time off is bad. The average amount of total time off is 30 days. That would include sick days, holidays, and vacation CME. Let’s say they offer you 15 total days. Almost no physician has that small amount of time off. And that could change substantially whether the offer is good or bad. So, yes, you do not have to go forward, even if you’ve signed an offer letter, because the employment agreement terms could change the offer substantially. It can start in awkward conversations.
And the sooner you notice to the employer that you will not start, the better. People also ask, what could be the absolute worst-case scenario? In this case, if it’s just an offer letter, I would say it’s a low downside risk. Suppose you sign an employment agreement and then wait until a week before. You’re about to start and then say, hey, I don’t want to start the contract. The employer can undoubtedly say that they’ve suffered some damages and could potentially come after you. Suppose you just signed the offer letter without seeing the employment agreement. In that case, I’d say the physician is safe in backing out of it and looking elsewhere.
Do Physicians Get Signing Bonuses? | Signing Bonus
Do physicians get signing bonuses? The answer is yes. And we’ll get into who gives signing bonuses. What’s the average value of a signing bonus, and then do you ever have to pay it back? First, who gets signing bonuses? Any physician could give a signing bonus if they’re coming out of training or just switching jobs. Does everyone give a signing bonus? No.
Most places will at least give relocation assistance, usually between 5,000 to 15,000. Many will pay it directly to the moving company, but that’s not the same as a signing bonus. Some places will combine it to call it a commencement bonus. Then, it’s up to the physician how they want to use it. They could use it for relocation assistance or down payment, for whatever they want. But let’s talk purely about signing bonuses right now. How does it work? Well, I would say now this is specialty-dependent. Normally, signing bonuses are somewhere between 10,000 to 50,000. When making the payment is important, some employers will pay it upon signing the agreement. Most employers won’t pay until the first pay period after the physician starts practicing with that employer.
Doctors Get a Signing Bonus and Relocation Assistance
The timing of that is important. Sometimes people are just coming out of training, either residency or fellowship, and don’t have much money. You don’t get paid a lot in either of those scenarios. And suppose you must move to a city and put a down payment in a house or security deposit. Having some of that money upfront can help the physician make things more comfortable. That’s one area we can negotiate. When is the bonus paid? How much do you get? Well, there is no hard and fast rule that this specialty gets this amount. It is employer-dependent. Some are willing to pay a decent amount, and others are just saying, no, you’re not getting one, no matter what. This goes for any contract negotiation.
If you’re in a specialty that’s in high demand and has few out there, you certainly have more leverage. If you’re going to a town that’s harder to recruit, you certainly have more leverage in that scenario. I would ask classmates and others in your residency what you are looking at regarding your bonuses. You could ask some of the attendings and say, what are you hearing about what’s a normal amount? Certainly, an attorney who deals with physician contracts can always give you a decent idea. Still, I’m telling you, it can vary wildly between cities and states and different employers. Another thing to think about is that almost every signing bonus will have a repayment obligation attached to it upon signing the agreement.
Term Length Affects Signing Bonuses
If the physician leaves within a certain period, normally the initial term of an agreement, I mean, how long it lasts, it’s going to be somewhere between one to three years. Many employers will tie whether physicians must pay the signing bonus back to that initial term. Then they’ll have forgiveness associated with it. So, I’ll use a couple of examples. Let’s say a physician joins the practice, its three-year initial term. The employer could say that 1, 30, and 6 of that signing bonus forgives for every month you’re here. So, you stay for those three years. You don’t have to pay anything back. Others can do it quarterly; some will do it yearly. And then maybe it’s only a year; it could be two, but you would rarely get a signing bonus.
Then if you left in the first year, you wouldn’t have to pay anything back. That’s something to think about when doctors are accepting a job. How much am I getting upfront? What will I have to pay back if I decide to leave the job before the initial term ends? In addition to assigning bonuses, some places under 10% could also offer student loan forgiveness. That’s another thing to investigate. A physician-owned practice would be extremely rare to offer student loan assistance. It would have to be at the hospital or healthcare network. I would say the vast majority would be through a hospital or healthcare network that would be willing to offer student loan assistance.
Student Loans Repayment
And in that case, there’s usually no repayment obligation. The employer would say, we’ll give you a hundred thousand for student loan forgiveness. Then, we’ll pay a certain amount of that a hundred thousand over three or five years, whatever it is. And then they’ll pay it at the end of the month, and that’s the forgiveness. The physician would never have to pay anything back. It certainly is worth negotiating a signing bonus. It needs to be reasonable. The worst thing a physician can do is ask for something completely unreasonable. It makes them look like they have no idea what’s going on or are greedy. That’s kind of like threading the needle.
This is a normal amount to ask for, or it needs to be slightly over what they’re offering. So, do physicians get signing bonuses? Absolutely. The amount depends on the situation. Almost any physician should get at least some signing bonus when coming out, trading or moving.
How Long to Respond to a Physician Job Offer? | Physicians Medical Employment
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’s 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 a 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, review the offer letter, 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.
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, and 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 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 contract. Somewhere between 60 to 90 days is standard for physicians.
Non-Compete Clause
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 Accept Without It
Lastly, the employer should almost always pay for your underlying annual premium with malpractice insurance. How much must they 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, 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 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.
Physician Contract Questions?
Contract Review, Termination Issues and more!