Physician Employment Contract Review: What to Check First

You finished residency or fellowship, the offer arrived, and the number at the top looks life changing. It probably is. But the first attending contract sets the terms for your income, your mobility, your insurance, and your exposure to lawsuits for years. A physician employment contract review is not about finding reasons to say no. It is about understanding exactly what you are agreeing to, so the offer that looks good on page one still looks good in year three.

Most new physicians sign within a few weeks of receiving an offer, often without professional review. Their contracts are drafted by the employer's attorneys, and the default terms favor the employer on nearly every point that matters. The good news is that a well-prepared physician can negotiate meaningful changes, and the questions that reveal problems are not complicated.

This guide walks through the sections that deserve the most attention: the compensation model, productivity targets, the non-compete, malpractice and tail coverage, signing bonuses and clawbacks, benefits, and termination terms. It also covers how to build a review team and what to do once the contract is signed.

Physician Employment Contract Review Starts With the Comp Model

Physician pay comes in several shapes, and the shape determines your risk. A straight salary shifts the risk to the employer. A pure productivity model shifts it to you. Most contracts are hybrids, with a guaranteed base for one to three years that converts to a productivity formula later. The conversion is where many physicians get surprised.

Ask for the formula in writing, then ask for the data behind it. If your pay after year two depends on work RVUs (wRVUs), request the median wRVU production for physicians in that department, the conversion factor per wRVU, and how the threshold was set. If the group will not share production data, treat that as a signal.

How wRVU compensation actually works

Under an RVU compensation model, each service you bill carries a work relative value unit assigned by CMS. Your employer multiplies your total wRVUs by a dollar conversion factor to calculate productivity pay, often after you clear a threshold that covers your base salary. The CMS physician fee schedule sets the wRVU values, but the conversion factor and threshold are set by your employer and are negotiable.

Two contracts can have identical base salaries and very different outcomes. A $300,000 base with a 6,000 wRVU threshold and a $45 conversion factor pays differently than a $280,000 base with a 5,000 threshold and $50 per wRVU. Run the math at realistic volumes, including a ramp-up year when your panel is still building.

Questions to ask about any productivity formula

Get direct answers to these before you sign.

• What happens to my pay if I do not hit the threshold? Is there a clawback of base salary, a reduced base next year, or nothing?
• How are wRVUs counted for procedures with multiple surgeons, supervised midlevel providers, or telehealth visits?
• Who controls my schedule, clinic days, and call? Can the employer change my volume without changing my target?
• How often is productivity reconciled, and can I see the reports?
• Does the conversion factor reset each year, and who decides?

Read the Non-Compete as a Cost, Not a Clause

A physician non-compete clause restricts where you can practice after you leave, usually within a radius of the employer's sites for a fixed period. Georgia enforces reasonable non-competes under its Restrictive Covenants Act, so a two-year, 25-mile restriction in Atlanta can be real. If the employer has ten locations across the metro area, a 25-mile radius from each may effectively push you out of the region.

Translate the restriction into dollars. If leaving means moving your family, selling a house, and re-licensing in another state, that is a six-figure cost sitting in a single paragraph. Negotiate the radius, the duration, the number of sites it applies to, and the triggers. A common and reasonable ask: the non-compete should not apply if the employer terminates you without cause or if you leave because the employer breached the contract.

Federal rules on non-competes remain unsettled in litigation. Do not assume a clause is unenforceable. Assume it is enforceable and negotiate accordingly. You can read the current status at ftc.gov.

Malpractice Insurance and Tail Coverage

Malpractice coverage comes in two forms. An occurrence policy covers any incident that happened while the policy was active, no matter when the claim is filed. A claims-made policy covers only claims filed while the policy is active. Most employed physicians have claims-made coverage, which means that when you leave, you need tail coverage to protect against claims filed later for care you delivered earlier.

Tail coverage can cost one and a half to two and a half times your annual premium. For a surgeon or OB/GYN, that can exceed $100,000. The contract should state clearly who pays. The best outcome is employer-paid tail in all circumstances. A common compromise is employer-paid tail if you stay a set number of years or if the employer terminates you without cause. The worst outcome is silence, which usually means you pay.

For a deeper look at how this works and how to negotiate it, read our companion guide to malpractice tail coverage.

Signing Bonuses, Relocation, and Clawbacks

A signing bonus is rarely a gift. It is usually a forgivable loan that vests over one to three years. Leave before the vesting period ends and the contract requires you to repay a prorated or full amount, sometimes with interest, and sometimes within 30 days. A $50,000 signing bonus clawback landing in the same month as a job change can wipe out your cash reserve.

Read the repayment terms and the triggers. Does the clawback apply if the employer terminates you without cause? If the employer closes your practice location? If you become disabled? Negotiate carve-outs for events outside your control, and ask for a monthly rather than annual vesting schedule so that leaving in month 14 does not cost you the full second year.

Tax treatment of bonuses and student loan assistance

Signing bonuses and relocation reimbursements are taxable wages, and they are typically subject to supplemental withholding at a flat federal rate that may not match your actual bracket. Employer student loan repayment has its own rules. Under current law, employers can contribute a limited annual amount toward an employee's student loans on a tax-free basis through an educational assistance program; check the current figure on the IRS educational assistance page. Amounts above that are taxable income.

If you are pursuing Public Service Loan Forgiveness, an employer loan payment can still count, but the employer must be a qualifying nonprofit or government entity. Read our PSLF employer eligibility guide before you assume a hospital job qualifies.

Benefits That Change the Real Value of the Offer

Two offers with the same salary can differ by $30,000 or more a year once benefits are counted. Ask for the summary plan descriptions for every benefit, not just a one-page overview.

• Retirement plans: Is there a 403(b) or 401(k) with a match? Is there a 457(b), and is it governmental or non-governmental? Is there a cash balance plan? Vesting schedules for employer contributions can run up to six years. See our guide to physician retirement plan options.
• Disability insurance: Group long-term disability often caps benefits at $10,000 to $15,000 a month, uses a weaker definition of disability, and pays taxable benefits if the employer pays the premium. Most physicians still need an individual own-occupation policy.
• CME, licensing, and dues: Confirm the annual allowance and whether unused funds roll over.
• Paid time off and call pay: Count the days, confirm how call is compensated, and ask whether unused PTO is paid out at separation.
• Health insurance: Compare premiums, deductibles, and whether the plan is HSA-eligible.

Termination, Notice, and What Happens When You Leave

Nearly every physician contract allows either party to terminate without cause with notice, commonly 90 to 180 days. That sounds symmetrical, but the consequences are not. If the employer terminates you without cause, you may still owe the signing bonus, still be bound by the non-compete, and still need to buy tail. Your negotiation goal is to make those three obligations disappear when the employer ends the relationship.

Look also at the for-cause termination list. Some contracts define cause so broadly (loss of privileges at any facility, any investigation, failure to meet unspecified standards) that the employer can almost always claim it. Ask for objective definitions and a cure period that gives you time to fix a problem before termination.

Term, renewal, and raises

Check the initial term and whether the contract auto-renews. Auto-renewal on the same terms sounds convenient, but it can lock in a base salary that has not moved in three years. Ask for a defined compensation review at each renewal, tied to a specialty benchmark, and get it in the document.

Build a Review Team and Turn the Contract Into a Plan

Two professionals should see the contract before you sign. A healthcare employment attorney reviews the legal terms: enforceability of the non-compete, the definition of cause, the indemnification language, and the malpractice provisions. A financial planner models the money: what your after-tax cash flow looks like under the base and under realistic productivity, how the benefits compare to your alternatives, and how the terms interact with your student loans and household plan.

The attorney's fee is small against a contract worth millions over its life. Attend does not review legal documents, but we regularly work alongside contract attorneys to translate an offer into a cash flow, savings, and protection plan. Our physician planning page explains how that works.

Once the contract is signed, the work shifts to execution. Set up your retirement contributions, buy the disability policy before you are too busy to schedule the exam, and put the signing bonus somewhere that makes sense. Our first attending paycheck plan covers the first 90 days step by step, and our financial planning service can help you build the longer plan around it.

A physician employment contract review is less about legal fluency and more about asking direct questions and refusing to sign until the answers are in writing. Focus on the compensation formula, the non-compete, tail coverage, the bonus clawback, and what happens at termination. Get an attorney for the language and a planner for the numbers. This article is educational and not individualized legal or financial advice. If you would like help modeling an offer, contact Attend Wealth.

Tony Colunga · Founder, Attend Wealth

Tony leads Attend Wealth, a fee-based wealth management firm in Atlanta serving professionals, families, physicians, and business owners. Advisory services are held to a fiduciary standard. More about Attend