This can be an intimidating process, but very important for achieving what you feel is fair compensation and satisfaction with your position.
Remember, at this point in the process, the employer wants you so the ball is in your court to make your requests known.
Note: Consider attending resident-directed lectures about contract negotiation and related topics at the CNS Annual Meeting.
When offered a contract, carefully review the employment agreement:
- Detailed job description
- Salary (guaranteed or productivity-based)
- How long a salary is guaranteed and how does it change after that time period
- Length of contract agreement
- How the contract is renewed
- Notification time if your contract is to be terminated
- Medical/dental insurance
- Disability insurance
- Life insurance
- Malpractice coverage—does it include tail coverage (see more info under “common pitfalls”)
- Moving expenses
- Vacation time
- CME time and funds
- Funding for licensure, academic fees, membership dues
- Retirement plans
How to become a partner in the practice
- How long does it take?
- Is everyone offered the opportunity?
- What is the buy-in structure?
- What is the annual compensation for a partner?
- Restrictive covenant
- This is a non-compete clause that typically includes a time period and geographic radius (i.e., 2 years, 20 miles).
- If you leave the practice to work elsewhere, you are required to work outside of that radius until the time period lapses.
- These are very common.
Make a list of priorities
- What you need
- What you want
- What you are comfortable compromising
Components that may be negotiable
- Base salary (to an extent)
- Signing bonus
- Resident stipends
- Loan forgiveness
- Moving expenses
- CME funds
- Start date
Hiring a lawyer
- It is fairly standard these days to hire a lawyer to review a contract. They can help translate legalese and identify pitfalls
- A qualified lawyer should be familiar with contract law and/or health law
- Approximate fee range between $250–$600 per contract
- Keep in mind, your contract should be written properly because you are about to live with it.
- This is not the time to penny-pinch.
- Lawyers may offer reduced fee rates for residents
- Lawyers can do the negotiating with the employer directly, although this may take longer and cost more
- Not getting a tail policy
- Tail policies refer to additional malpractice coverage for litigations that may come up beyond one’s termination date.
- Know who pays for this—is it you, the current employer, or a future employer?
- Not thinking through an exit strategy
- Sure, everything looks great now, but we cannot predict the future.
- Be prepared if things don’t work out.
- Review the restrictive covenants/non-compete clauses to make sure they are reasonable and precisely defined.
- Not getting it in writing:
- You may discuss details of your work hours, call frequency, etc. in your verbal negotiations, but it is not official until it is on paper.
- Recap conversations at least in email to keep an adequate paper trail.
- Not understanding the compensation formula and method:
- Ask for a sample calculation of compensation.
- Is it worded the same way in your contract?
- Is your compensation salaried or productivity-based?
- It's a good idea to establish a base salary for the first few years while you establish your practice and may not survive on wRVUs alone.
- Find out the average wRVUs for physicians in the practice
- Determine the payment formula, payer pool, collection rate, etc.
- How likely will you reach your expected RVUs compared to other physicians practicing for 3–5 years?
- Not discussing dispute resolution and how it works
- Expiration vs. termination vs. leave without cause
- Waiving your right to appeal should you have termination of medical staff privileges
- It is expected that there will be some negotiation of the contract
- Make sure you understand all terms and conditions of the contract before beginning negotiations
- Negotiations can be done by email, phone or in-person
- It may be helpful to create a script for yourself for verbal negotiations
- Don’t be afraid to ask—knowing that some items may be non-negotiable
- Be confident without being arrogant
- Be respectful and realistic with your requests
- You can’t get everything you want, so be willing to compromise
- Be timely in your communication
Bare Bones Essentials
- Always read your employment agreements.
- Never sign something you do not understand or are not prepared to live with.
- Have an exit strategy.
- Always ask questions—the worst they can say is "no."
- Get everything in writing.