How a Physician Assistant Should Negotiate a Contract
How to negotiate an employment agreement for a physician assistant? When you are negotiating the terms of your employment, the two things you really want to keep in mind are, one, what type of leverage do you have? And two, what are really the most important things that you want to throw that leverage towards, to get the best deal for yourself, and what do you want to negotiate? What can you negotiate? What’s typically negotiated within the industry? Let’s first start with leverage. How much leverage do you have? Well, let’s first think about that. You are a physician assistant, and, in most states, you need some type of supervising physician. So, you want to keep that in mind. And then also, are you right out of school?
You’re going to need a lot of direct supervision. Are you experienced and you can just step into that role? How specialized are you? Again, this all just depends on your state. But really what you’re looking at is how much oversight you need, how much training, or can you just start providing care and collecting for your services? That’s how you judge how much leverage you have. Now, let’s talk about negotiation. I get questions from clients all the time: can I negotiate? Is this something am I going to upset this prospective future employer? And I would say, no, it is customary within your industry to negotiate the terms of your employment contracts. Most of the time they’ll hand you or send you an employment contract and give you one or two weeks to look it over, consider it, and consult with legal counsel, that’s me, and come back with any terms.
Sometimes you do want to negotiate. There are things that you should advocate for. Sometimes there also might be terms that you don’t understand, and you need clarification for, or you need this employer to define for you. There are some negotiations and back and forth. That’s customary, you should not feel that you’re going to upset them and they’re going to resend this offer. That’s just simply not the case. You’re always going to negotiate some part of your employment contract and your employer expects this. They do not expect you to just sign on the dotted line and agree to all the terms. That’s extremely rare. And I think your employer would be surprised if you came back with that. Now, let’s talk about what we’re going to negotiate. Most people, when they think of negotiation, they think of their base salary. The big money amount on their employment agreement, that’s what they want to negotiate first.
They want to use all their negotiation power for how much money they’re going to be receiving. If you feel like you’re not getting compensated how you should, you absolutely should advocate for yourself and try to negotiate that amount. But what I look for and I think is the most important to negotiate is sometimes it’s the non-compete clause. That’s the first thing that I would probably negotiate. Because a lot of people don’t think about the non-compete clause until their contract ends. And you can negotiate a couple of different parts of the non-compete clause. Normally, it starts with how long does the non-compete? Is it enforceable? Once your contract terminates, your non-compete will start. It’s anywhere from one to three years I’ve seen on a contract. I would never want anything over 12 months. I would push for 12 months or six months, honestly, but most people are going to agree to 12 months.
So, I would always negotiate down the time. How long are you restricted from competing with this employer? Then next I’m going to look at the locations that the restricted area attaches to. And the restricted area is normally within a mile radius. So, anywhere from 3 to 10 miles, you are restricted from practicing from a three-mile radius from this location. If the miles are unreasonable, anything over 20 miles, in my opinion, is likely unreasonable. You would want to negotiate down that amount. And then you’re also going to look at how many locations is that restriction attached to. If it’s only one location, that’s great. But if you start having that area or restricted area attached to any location you provide services for or any location of the practice, then you’re knocking out huge areas. That can really be unreasonable.
And, it’s going to be really hard and stressful for you to find work after this employment agreement terminates. So, the first thing I always look for and try to negotiate is the non-compete clause. In some states, it’s unenforceable and that’s great. You just want to check your state law or check with an attorney. They can advise you on that. But the non-compete clause, absolutely, I always look for that. Then the next thing I’m going to look for is how do you get out of this agreement? Most employment contracts should have something that’s called a without cause termination, which means you can injure employment with your group for any reason or no reason at all. And you just have to give a specific amount of notice prior to the termination. If your contract does not have this included, I would absolutely negotiate. This would be a huge red flag for me because you just don’t have a crystal ball.
It might not be a good fit; you might need to move out of the area because of family issues or personal reasons. You just don’t know. And so, if you don’t have a without cause termination, you’re really stuck in this contract until the end or you’re at the mercy of your employer, begging them to let you out of it. So, I would always negotiate a without cause termination. The third on my list probably would be your compensation. Sometimes the base is most important. In your compensation model. Normally, for a physician assistant, you’re normally paid either salary, hourly or per shift, or like a daily rate. It’s normally a flat fee. You’re not normally compensated for collections, productions, or RVUS. So, you are going to be negotiating that base amount.
You want to do your research. Are you in a desirable area? Are you in a high-need area? What experience are you bringing to the table? All of those you want to consider when you’re asking for an increase in that base salary. And if you feel like upon your research that you think you should advocate for more, then you absolutely should. Another thing you want to consider when you’re negotiating is looking at your bonuses. That could be a relocation bonus, it could be a signing bonus, or sometimes they even call it a commencement bonus. You’re going to get a certain amount of money upfront. If you’re moving to a new area, I would absolutely negotiate a relocation allowance or bonus or something like that, just so that you’re getting funds that will help you with the transition into this new area.
That is something I would negotiate. Then two, your signing bonus. Just about every contract I see for a healthcare provider has some type of signing bonus. If you don’t have one, I would ask for one. That’s something you should negotiate. But with all these bonuses, with the funds that you receive upfront for starting or commencing your employment, you want to be careful because there’s normally some type of payback provision, which means you have to stay employed with your employer for a certain period. It’s normally anywhere from one to three years. You want to read that carefully. You may have to pay back your entire signing bonus if you terminate at any time within that one to three-year window. If I were negotiating, I would ask for that amount to be prorated, which means that for every month that you stay employed, a fraction of that amount is forgiven, so you don’t have to pay back the full amount.
There are a lot of things you can negotiate. You also don’t want to forget about those ancillary benefits or sort of employment costs. Things that need to get reimbursed like your continuing education, your licensing fees, your dues, and DEA license are very expensive right now. You should negotiate that your employer reimburses you for that. So, you just want to keep all of that in mind and not just focus on your base salary.
Employment Contract Questions?
Contract Review, Termination Issues, and more!