What to Know About Negotiating Your First Physician Contract

As a physician nearing the end of your residency, securing your first job offer is a significant milestone. However, before signing on the dotted line, it's essential to understand how to negotiate your contract effectively. Here’s a breakdown of key elements to consider as you approach this exciting but complex process.

1. Understand the Compensation Structure

One of the first things to look at in your contract is how your salary is structured. There are several different types of compensation models:

  • One or Multiple-year Guarantee: This means your salary is guaranteed for a set number of years, but it may change afterward depending on your performance or productivity.
  • Base Salary + Productivity: You’ll receive a set base salary, but you could earn additional income based on the number of patients you see or the quality of care you provide.
  • Patient Volume Incentives: In some contracts, you may be compensated if you exceed a certain number of patients.

Make sure you understand how your salary will be calculated, and ask if you can negotiate any of these terms to suit your preferences and career goals.

2. Review the Timeline of the Hiring Process

The hiring process typically follows a timeline. Here’s what to expect:

  • September - December: This is usually interview season, when you'll meet with various facilities.
  • January: You’ll start receiving offer letters, which may be preceded by a Letter of Intent. This formal document signifies your interest in the role and paves the way for contract negotiations.
  • After Offer Letter Acceptance: Once you’ve accepted the offer, the onboarding process begins, including paperwork for licensing, DEA registration, malpractice coverage, and more.

Facilities differ in how quickly they move from interviews to offer letters. Larger health systems, in particular, may take longer due to internal approvals.

3. Non-Compete Clauses and Other Legalities

Pay close attention to any non-compete clauses in your contract. These terms can restrict where you can practice after leaving a job:

  • Geographic Restrictions: You may be prohibited from practicing within a certain radius (e.g., 30 miles) of the facility.
  • Patient Transfer Restrictions: Find out whether you are allowed to take your patients with you if you leave.

4. Other Key Benefits to Negotiate

In addition to salary, there are other benefits you should consider when negotiating your contract:

  • Sign-On Bonuses and Relocation Expenses: Ask about any upfront bonuses or financial assistance for moving costs.
  • Malpractice Insurance: Ensure the contract includes tail coverage for malpractice insurance. Without it, you could be liable for claims that arise after you leave a job, which could cost you thousands of dollars annually.
  • Student Loan Reimbursement: Some employers may offer monthly payments towards your student loans.
  • Additional Perks: Depending on the facility, you may be able to negotiate for extras like cell phone reimbursement, babysitting services, or even dry cleaning.

5. Navigating the Offer Letter Stage

After you’ve received an offer letter, you’ll enter into the negotiation stage. This process typically takes two to four weeks, depending on how quickly the facility can get approvals. During this time, you can work with the facility’s physician recruiter or legal team to refine the terms of the contract.

6. Prepare for the Onboarding Process

Once your contract is signed, the onboarding process begins. You’ll need to complete several administrative tasks, including credentialing, obtaining a DEA number, and completing Medicare forms. The HR team at the facility usually manages this process, but you should stay engaged to ensure everything is on track for your start date.

7. Consider Regional Market Salaries

Before you set your salary expectations, research the market value for your specialty in your geographic region. For instance, salaries can vary significantly between North Carolina and Miami, and many employers use data from sources like MGMA (Medical Group Management Association) to set their offers. Use this information to negotiate a fair salary based on local standards.