Contract Benefits for Medical Professionals | Chelle Law Health Physician Contract Reviews

If you’re a medical professional about to sign a contract with your employer, you may be wondering what contract benefits you should look out for. Should your employer pay for your health insurance? Will you be paid if you take some time off and go on a vacation? And how can you measure if what’s offered is fair and reasonable? 

While most contracts for medical professionals offer several essential items, educating yourself on what to expect is necessary. This way, you can avoid misunderstanding down the road when what you thought they would offer is not provided. In this article, we will look at the following contract benefits for medical professionals:

• Continued Medical Education 
• Paid Time Off 
• Licensing Board Fee 
• Professional Societies Coverage 
• Drug Enforcement Administration (DEA) Registration Fee 
• Liability Insurance 
• Disability Insurance 
• Retirement Plans 
• Healthcare Insurance
• Relocation Reimbursement
• Signing Bonus

28 Essential Medical Professional Contract Terms (Free Checklist for 2022)

Every medical employment contract is unique.  However, each one should contain these essential terms…

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As an employee, you should never assume a benefit will be covered if the medical employment contract does not clearly state it. It is advisable to have a physician contract lawyer review your contract before agreeing to it. This way, you can be sure your contract benefits are well-covered and offered as they should. One oncologist, let’s call her Dr. Laura, didn’t know what to look for, and she never consulted any professional help. The result: “I didn’t get paid until I’d been there six weeks, and I never had any health benefits,” she said. She learned the hard way, but that doesn’t have to be your case since you know better. The following are the contract benefits to look out for in a medical contract: 

Continued Medical Education (CME) Reimbursement 

Medical professionals are expected to stay up to date with the current trends and techniques in the healthcare industry to provide the best services to patients. It can only happen if medical professionals get to learn new advancements through courses, live events, webinars, seminars, workshops, conferences, books, or journal articles. 

CME will not only help you understand the latest developments in your field, but you can also add it to your CV and use it when seeking new employment opportunities. You can also expect your employer to take care of your travel, meal, lodging, and conference entrance fees. 

Paid Time Off (PTO) 

Paid time off is the amount of time you’re entitled to take a break from work without being penalized. This includes holidays, sick leave days, and vacations. The more hours you work, the more hours you’ll have as paid time off.  

In most cases, federal and state laws govern physicians’ time off policy. For example, you’ll get PTO for Christmas eve but may not get it for Labor Day if your state doesn’t observe such a holiday. 

Licensing Board Fees 

To practice medicine, you must have a license from the state where you plan to work. The fees for these licenses typically range from $50 – $500 and are renewed every 1-3 years. These fees can be expensive, but most employers will reimburse their employees for these costs. 

Professional Societies Coverage

Medical professionals are encouraged to join professional societies related to their field of practice. These societies offer many benefits, including educational opportunities, networking events, and job postings. Many employers will reimburse their employees for the cost of membership in these societies. Therefore, check if your hiring employer has this listed as one of the benefit packages. 

Drug Enforcement Administration (DEA) Registration Fee

Register with the Drug Enforcement Administration (DEA) to prescribe controlled substances. The registration fee for this program varies depending on whether you’ll write prescriptions at your office only and how frequently you plan to prescribe drugs to those in need at home. Many employers will reimburse their employees for this cost.

Liability Insurance 

Most employers will provide some form of professional liability insurance for their employees. These policies are meant to protect you from being sued for malpractice. For example, if you have liability insurance and cause an injury to a patient, you’ll be covered and won’t have to face the consequences of your errors.

Liability insurance can be very convenient, especially in the field of medicine, as malpractice claims can be substantial. 

Disability Insurance

This insurance provides income replacement if you become disabled and cannot work. The amount of money you receive will depend on the policy, but it is typically a percentage of your salary. Your employers will often provide this benefit at no cost to you.

Retirement Plans

Your contract should state that you are eligible for pension plans. Most employers offer retirement plans, such as 401(k) and 403(b) (if it’s a private company), to their employees. This is a great benefit that allows you to save for retirement while getting some tax breaks. Many employers will match a certain percentage of the money you contribute to your account.  

Healthcare Insurance 

Health insurance is a vital benefit that all medical professionals should have. This type of insurance will help you cover the cost of your medical care and prescriptions. Some employers will provide premium healthcare insurance for you and your family, while some will only provide a premium for you and require you to pay for your family. 

Relocation Reimbursement

Physician relocation assistance is customarily provided to a physician when the employer assists new hires with relocating from one location to another. Relocation assistance is designed to help ease the financial burden of moving and get the employee started in their new position as quickly as possible.

Signing Bonus

A physician signing bonus is a cash payment the employer provides as an enticement to accept the position. A physician’s signing bonus can vary dramatically from employer to employer, but a standard range would be from $5,000-$50,000.

Reach Out to an Employment Contract Attorney 

Before signing an employment contract, you must know all the contract benefits you are entitled to. It means reading your contract carefully and asking questions where needed. It will help you avoid misunderstanding. It will also enable you to enjoy a long and prosperous medical career. Another consideration is whether the Agreement contains a non-compete agreement.

One way to ensure all contract benefits are offered as they should is by having an employment contract lawyer review your contract or independent contractor agreement. This way, the attorney can guide and advise you accordingly. Attorney Robert Chelle is a professional contract lawyer who can help you review the benefits under your contract. He has helped many healthcare professionals, and he can help you too. Feel free to reach out for assistance today.

Other Blogs of Interest

• Physician Independent Contractor vs Employee
• What Percentage of Physicians are Self Employed?
• Is a Physician Letter of Intent Binding?

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, that if you have classmates in your training program, you need to ask them what they’re receiving. It’s going to vary based on 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.

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, 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.

Everything You Need to Know About Medical Employment Contracts

Before starting a new job as a physician, it is important to sign an employment contract. Such a contract not only states your duties but it sets clear guidelines on what you and your employer should expect from each other.  

While you and your employer can communicate the grounds of operation through emails, phone calls, or texts, a written contract will legally protect and cover your rights in situations such as contract termination or unfair employee benefits coverage, among others.  

In this article, we’ll cover: 

• What is a medical employment contract? 
• Who needs a medical employment contract? 
• What to look out for in a medical employment contract 
• How to navigate an employment contract 
• What are medical employment contract pros  

What Is a Medical Employment Contract? 

A medical employment contract is a written agreement between you (the physician) and your employer. The contract entails what is expected from you during (at times before and after) your working time with your employer. It also details what you should look forward to from your employer. 

The contract highlights the type of medicine being practiced, the number of working hours, your availability, your duties, compensation, arbitration clauses, and benefits. 

It is important to read and understand your medical employment contract before signing it. You should never dismiss something in the contract and think, “the employer won’t enforce that,” That may be a good recipe for disappointment later on. An employment contract lawyer or a practice management consultant familiar with medicine employment law should review your contract before agreeing to it.  

Who Needs a Medical Employment Contract? 

Anyone interacting directly with patients to provide medical assistance must sign a medical employment contract before starting the job. These can be new employees, full-time employees, part-time employees, independent contractors, or Locum tenens physicians. Therefore, the following healthcare workers, among others, should sign medical employment contracts: 

• Nurse Practitioners 
• Licensed Practical Nurses 
• Physician Assistants 
• Internists  
• Nurse Anesthetists (CRNAs) 
• Registered Nurses 
• Optometrists 
• Psychiatrists 
• Nursing students  
• Pediatricians 
• Obstetricians
• J-1 Physicians  

What to Look Out For in a Medical Employment Contract? 

Medical employment agreements can seem complex and challenging to understand due to legal terminology and considerations. However, it is important to understand the contract no matter what. It is especially true if your hiring contractor has stayed for a long period without hiring.  

For example, a physician– let’s call her Dr. Lisa- learned the hard way after accepting her first job through a “handshake agreement.” “I was focused on the medicine I would practice and didn’t know the right questions to ask. I worked without a contract for seven months. I didn’t get paid until I’d been there six weeks, and I never had any health benefits,” she said.  

Some of the crucial things you should look out for include: 

Term and Termination 

You need to take note of the start and end date to know the term length of the contract. Also, check any conditions that need to be satisfied before the start date. It can be things such as obtaining licensure in the practicing state. 

An employment contract can be terminated or voided if conditions are not met by the starting date. It can also be terminated due to malpractice, incomplete restriction, and issues tied down to compensation, among other things. Be sure to read and understand every reason your employer may have for the termination of the contract. 

Expiration 

Take note of when the contract will expire. Sometimes the expiration date can be forgotten or left out. Such cases can cause a lot of pressure due to job security. Therefore, if the contract doesn’t renew automatically before the end of the term, remember to renew it manually before the expiration date.

Non-competes 

Non-competes hinder you from practicing within a specified geographical area after your contract has been terminated. Usually, the radius can be within 2-50 miles, depending on your place of employment (rural or urban area).  

It is always important to negotiate a larger radius, say 50 to 100 miles, especially if you’ll be working in a densely populated area. 

What Are the Pros of an Employment Contract

Apart from a clear established relationship between the employer and an employee, an employment contract creates other benefits such as: 

Clear Compensation Model 

Your employment contract should detail your total compensation, including your basic salary and any incentives and bonuses. The model can either be salary with a minimum wage guarantee, salary plus bonuses, or equal Shares Compensation. 

Employee Benefits 

Once you sign the contract, you will be eligible for several employee benefits. These benefits may include the following: 

• Paid time off 
• Health insurance coverage 
• Life insurance 
• Medical malpractice insurance 
• Liability insurance 
• Continuing Medical Education reimbursement 
• Retirement plans 

Relocation Expenses 

If you need to relocate before starting your new job and your employer has agreed to help you move, you should include those expenses in your employment agreement. According to Meritt Hawkins, healthcare practitioners received an average relocation bonus of $10,533. 

How to Navigate an Employment Agreements 

Here are 5 summarized steps to help you fully understand and navigate your medical employment contract: 

1. Understand common contract terms such as Indemnification, return of records, Intellectual Property, etc.  
2. Comprehend the provided compensation model 
3. Discern fair benefits and compensation packages 
4. Understand the legal consequences that come with signing a contract 
5. Understand working conditions, liability, and restrictive agreements in your contract 
6. Determine if there are elements of an independent contractor agreement

Note that you don’t have to accept everything that is offered, nor should you negotiate every part of the contract. Study the contract and decide which points are most important to you, be firm on those points and a bit flexible on the less critical points.  

Contact Chelle Law Today

Starting a new job with a favorable contract can place you in a suitable work environment where your job security, finances, and practice are well protected. The first step to ensure this happens is understanding the contract fully and negotiating where needed. To make the process much more convenient, you should consider having an experienced and knowledgeable attorney. Contact Chelle Law for assistance if you need help with a physician contract review. He will help you every step of the way!

What are the 4 Reasons for Termination of a Medical Contract? | Contracts Termination

What are four reasons that a medical employment contract can be terminated? Let’s discuss the differences between why a contract would be terminated and how a contract can be terminated. The “why” doesn’t matter. What matters is the language in the contract that tells the provider how the contract can be terminated. There are four common ways for a contract to be terminated. 

Fixed Term Contract

First, in a contract, it’s going to list the terms of the agreement. The term just simply means how long does the agreement last. Now, there are contracts that have a language where it automatically renews after the initial term, usually for one year period. Let’s say it’s a two-year initial term; it’ll just continuously automatically renew for one-year additional terms unless terminated in one of the three ways. After this, we’ll talk about that next. There are some contracts that have no fixed term at all. Meaning all it states is that as soon as the contract is signed, it continues forever unless terminated. The first way to terminate the medical contract is for the initial term to end. There’s no renewal language, neither party wants to renew the contract, and that’s it. 

Mutual Agreement Termination

Next would be by mutual agreement. A medical contract can be terminated by mutual agreement of both parties. Let’s just say, the provider starts, just not the right fit, the employer says, you know what? This isn’t the right fit. We’re not going to require you to give us notice. We’re not going to require you to work anymore. Let’s just wash our hands of the situation. And you both can leave. A mutual agreement is the second way you can terminate a medical contract. 

With Cause Termination in Medical Contracts

The third way is for cause or with cause termination. What this means is that if a provider or the employer is in breach of contract, there will usually be language that states one of the parties has to give written notice to the other that they are in breach of contract and the reasons why. And then, normally, there would be what’s called a cure period. 

Cure Period

A cure period simply means how much time a party must fix the breach or cure the breach. Let’s say, a provider had productivity bonuses in their contract that were supposed to be paid out monthly. The employer is simply not paying it either on time or at all. Well, in that situation, the provider would then send a written notice to the employer stating you’re in breach of contract.

You’re supposed to pay me a monthly bonus, and you’re not. If you don’t fix this within whatever the allotment is, let’s say 15 days, then the provider can terminate the contract immediately for cause. The third way of terminating the medical agreement is for cause or with cause termination. It honestly doesn’t happen very often that a contract would be terminated with cause. 

Normally, the parties would work out the differences in advance of that. But it does provide some leverage, I guess, to both sides if one of the parties isn’t holding up their end of the bargain. From the employer’s side, let’s say the contract states that the provider must take one in four calls, and then the provider refuses to take calls at all. Well, then, they’re in breach of contract. The employer will then basically state, you’re not taking calls. You’re in breach. You need to start taking calls, or we’re going to terminate the agreement immediately. So, it goes both ways. 

Without Cause Termination – A Physician Would Want This in a Contract

And then the last and most common way to terminate a medical contract is through what’s called without cause termination. Nearly any employment agreement is an At-will contract. And that simply means either party can terminate the agreement at any time, but for a medical provider, it’s a certain amount of notice. Normally, 60 to 90 days is the industry standard for terminating an employment agreement without cause in the healthcare industry. Now, why do you have to give this much notice? Let’s say you’re a provider, you’re unhappy, you want to leave, you have a better opportunity, the contract states, you have 60 days without-cause notice, then you’d send them in writing saying, I’m terminating the agreement per without cause termination section. Then you’d work out your 60 days and then you’re free to move on after that.

Reasons Why Without-Cause Termination Is Important

The reason why this is important and the reason why it needs to be in the contract is if a provider starts with somebody and the practice made it out to be much better, the volume is much better, and your productivity incentives are going to be great, the hours are going to be reasonable, and it’s not. There’s no language in the contract where the provider can terminate it without cause they could be stuck in that contract until the initial term ends. 

So, you always want to have without cause termination. And as I said before, normally 60 to 90 days. If you have 180 days, you want to negotiate that down to a reasonable amount. Now, the reason why there are between 60 to 90 days in most contracts is for continuity of care purposes. Maybe if you’re in sales, you don’t need 90 days’ lead time to leave.

But if you’re a medical provider and you have a patient base, there needs to be some time to transition them to a new provider, refer them to different providers, or provide bridge prescriptions. So, they don’t just go cold turkey until they find a new provider. That’s normally why there are 60 to 90 days. Just to allow enough lead time to make a smooth transition and provide continuity of care for the patients. So, those are the four reasons you can terminate a contract. Either the term just ends, mutual agreement, for cause termination, or without-cause termination.

What Can You Negotiate in a Physician Contract? | Doctors Contract Negotiations

What can a physician negotiate in an employment contract? The short answer is everything. It ultimately depends upon the willingness of the employer of whether they’re willing to negotiate terms or not. I find big hospital networks are less likely to make major changes in an employment agreement. Whereas if a physician is looking into a physician with a smaller physician-owned practice, there’s much more leeway for major changes. What are the things that are important to the physician, and then what are the things they can get changed? When I’m talking to a physician, I think the things that stick out as most important would be:

• Signing bonus
• Relocation assistance
• How to terminate the agreement
• Making certain there’s without-cause termination that’s a reasonable length.
• Compensation
• Productivity bonuses
• The non-compete
• Tail insurance
• Who pays for tail insurance if it’s a claims-made policy?

Physician Contract Negotiations

Let’s go through each of those and come up with some tips on negotiating. First, as far as compensation goes, the physician needs to know the value and their specialty’s value. Getting the MGMA data is helpful. It is helpful to talk to colleagues about what they’re being offered or what they’re currently making in different organizations. Sometimes, the associations for each specialty can provide information as far as what’s a normal salary in your specialty. That’s one way to look at it. As far as productivity goes, this is a little more difficult. It’s going to be completely based upon, I guess, the arrangement. Is it kind of a hybrid of a base salary and RVU production? Is it a base salary and net collections? Or is it all RVU? Is it all net collections?

This one is dependent upon what’s the type of structure. If it’s net collections, if it’s a hybrid model, meaning you’re getting a base plus a certain amount. Let’s say; for instance, the expectation was 20,000. Anything collected over 20,000 by the practice; the physician will then get 15 to 25% of that. That would be a normal percentage. If the physician is purely on net collections, around 40 to 45% is standard. As far as RVUs go, there are two things you can negotiate. The threshold, meaning, how many RVUs you must generate to get a certain amount. Then the compensation factor is the monetary value associated with the RVUs. That has some leeway as well. Regarding signing bonuses and relocation assistance, the main things are the actual number and the repayment schedule. 

Forgiveness Period

Almost every contract is going to have a forgiveness period. Let’s say the physician gets a $20,000 signing bonus, and the initial term of the agreement is two years. Usually, they’ll have to stay for that initial two-year term to have the entire 20,000 amount forgiven, so they don’t have to pay anything back. The same goes for relocation assistance. Relocation assistance should be somewhere between 10,000 to 15,000. The signing bonus can vary widely from 10 up to 75. That one is specialty-dependent. As far as non-compete goes, this does vary state by state on what’s considered reasonable. There are a few states where it’s completely unenforceable, California and Mexico, for instance. Normally, the non-compete shouldn’t be any longer than a year, and the geographic restrictions should be somewhere between 5 to 15 miles from your primary practice location. Where to negotiate with this?

Terms That Matter for Physician Contracts

The length, you want to keep it one year or shorter. You want the non-compete to only apply to a few locations. Some employers will say the non-compete attaches to every facility we own in the entire city. Instead of having one office within 10 miles, you could have 30. So, that’s very important. And then specialty as well. Some specialties can do multiple things.

Let’s say you are internal medicine. You can be a hospitalist. You can go to family practice. Or you can do urgent care. If the non-compete states that you can’t practice medicine within that geographic restriction, you’re out of luck. Whereas if you just keep it to the specialty of what you’re providing to that employer, specifically, in this case, let’s say your hospitalist, then you could go in family practice or do urgent care for a year, and then when the non-compete ends, go back to being a hospitalist. That’s something to think about.

And then malpractice insurance is always a big discussion with the physicians I’m working with. First, you need to identify whether it is a claims-based or occurrence-based policy. If it’s a big hospital, they might be self-insured. And then, after you determine what type it is, if it is a claims-made policy, then tail insurance will need to be purchased after the contract terminates. And then who pays for that? Most of the time, if you’re in a small private physician-owned practice, the physician must pay for tail insurance when they leave. You rarely have to pay for tail insurance with a big hospital network. Now, tail insurance usually costs about twice what your annual premium is.

Physician Employment Contracts Negotiation Tips

Let’s just say you’re in family practice. Your annual malpractice premium is somewhere between $6,000 to $8,000. If you had to pay for tail insurance, it’s somewhere between 12,000 to 16,000. That’s one thing you can negotiate, who pays for tail insurance coverage? Sometimes an employer will put if you’ve been with us for one year, we’ll pay for a quarter and then two years, half, and then three years, 75%.

There are some ways of getting out of having to pay the entire amount, just depending on the situation. Now, the first thing that I talked about was, whether the employer is willing to negotiate or not. There will be some employers that simply say, this is a take-it or leave-it deal. I don’t think those employers will be great to work with. If an employer is unwilling to budge on anything, they will likely be difficult to work with.

Meaning that they’re not going to accommodate the physician in some way. So, I caution any physician who has been given a job offer, we ask for some clarification or certain concessions, and they simply say no. This is it. That’s usually a red flag. And I tell the physician that you may want to continue looking for a job because this might not be a good fit for you. Anything in the contract is negotiable. You need to figure out what’s most important to you. Sometimes, a non-compete is absolutely the number one thing. For others, it’s compensation. For others, it’s not having to pay tail insurance. It really is dependent upon the physician’s wants and needs and then tailoring the negotiations to get them to that point.

Physician Contracts Negotiating Tips | Hospitalist Contract Negotiation

Do you want to know how to negotiate hospitalist contracts? I have some good and some bad news. The good news is that there are certain areas within the employment contract that a hospitalist can negotiate. The bad news is that one of the main areas where it’s difficult to negotiate is the base salary or hourly rate. There are two ways a hospital can be staffed. Either the hospital employs them, or there’s a staffing company/physician group that contracts with that hospital to staff the hospital with hospitalists. I find that most companies want to keep the rates standard, especially if there’s an hourly rate involved. I mean, the variables for any hospitalist job are the base salary. And the shift expectations per year, month, or hourly rate, usually with the shift differential.

Main Areas of Hospitalist Employment Contract That You Can Negotiate

When the hospitalist negotiates, the company will typically push back and say, “Look, we want to keep the rate standardized.” The physician is going to talk. There will most likely be friction if one person makes $20 more than another. So, suppose it’s an hourly rate position. In that case, getting the organization to move off that is challenging. Contract negotiation can be complex in this case. Some movements and contract agreements are reachable if it’s just a base salary. However, there will be a narrow range of what the action could be on a base salary. 

And then, as long as the shifts are required, they can move them. In some places, the longer the physician has been with that company or hospital, the more their expectations may change over time. And that’s a place that we can sometimes negotiate. 

The areas of the employment contract that you do have some movement on would be:

• The signing bonus, 
• Relocation assistance, 
• Non-compete scope, 
• Nose coverage, 
• Whether they pay for your tail when you’re leaving.

What Is a Fair Signing Bonus for Medical Professionals?

I’d say those are the main areas where there is some movement. Now, how does a physician determine what’s a fair signing bonus for a hospitalist? Well, it depends on who you are in the country. Suppose you’re looking into a facility that’s in a difficult location to staff. More rural communities without large cities around them are always harder to staff.

That’s just the reality. And so, the hospitalist has more leverage in asking for a higher signing bonus. Some communities will not only provide a signing bonus. But they can also offer student loan assistance where they’ll pay a particular portion to the company that has the student loans. Usually, that can be substantial, somewhere between fifty to a hundred thousand. But as far as the signing bonus goes for a hospitalist, I’d say anywhere between 10,000 and 50,000 could be a normal range. And then you certainly want to ensure that the organization is also paying for your move.

Can The Bonuses Be Negotiated?

One thing to keep in mind, especially for hospitalists coming out of training, is that the timing of those bonuses can be negotiable as well. You’re in residency, and you don’t make a ton of money. Some people don’t have $15,000 to put down for action because, most of the time, they’ll state that they will reimburse you. One of our negotiating points is having them pay the cost directly to the moving company. And have them provide the signing bonus upon executing the document and signing it, and not just when the hospitalist starts the job. A non-compete can be necessary as well. Now, if you’re in a one-hospital town, a non-compete has almost no effect on you because it needs to be reasonable. Something reasonable is usually somewhere between 5 to 15 miles and one year. 

But if you’re in a large metropolitan area, and you want to stay in that city, decreasing the radius of the geographic restriction certainly is something that we would look to do as well. And then, as I mentioned before, with malpractice insurance, sometimes you can work on if the organization provides tail insurance or not. A good rule of thumb in tail insurance is that it’s usually about twice your annual premium. For hospitalists, it’s probably somewhere between 7,000 to 10,000. So, your tail insurance cost would be 14,000 to 20,000, something like that. So, is it possible to negotiate points in a hospitalist contract? Obviously, yes. Getting any movement, base salary, or maybe a little action is strict. Still, the signing bonus, and non-compete, which pays for tail insurance, are the areas that I think you should focus on.