Smart physicians are not immune from making highly regrettable mistakes when it comes to employment contracts. And unlike in medicine, you don't get the option of trying a new treatment plan if the first one doesn't work. Physicians are educated, and intellectually sophisticated. This means that, even though you weren’t trained to read legal contracts in medical school, courts expect that you have read and fully understand the terms of the contracts you sign. That means that, both during and even after your employment, you're stuck with the contract you sign, so make sure you avoid these common pitfalls.

Mistake #1: Thinking a healthcare employment contract is no different than other contracts for highly compensated employees.

You scan your contract for base compensation, health insurance, bonuses, stock options, and vacation time, just like you would if you were a business executive. All the numbers look right, so what's the harm in signing?

Plenty, as it turns out.

The liability exposure for healthcare providers exceeds that of other highly compensated professionals, so the balance of risk is different. In addition, physicians cannot shift all risk to their employer, regardless of how much power and influence that employer has on the employee. Medical malpractice and fraud, waste, and abuse laws apply directly to the physician him or herself, so doctors must be vigilant about employment contracts and relationships that could jeopardize their license, livelihood, and freedom.

Mistake #2: Rushing to sign without understanding each and every term of the contract.

Attorneys write employment contracts. They contain terms that are most favorable to the attorney’s client — your future employer. These terms are meant to shift risk away from the employer. And they aren’t always written in plain language. You need to know which terms create risk for you, so you can determine whether they are worth the benefits you’re receiving. Healthcare attorneys are trained to understand the healthcare-specific risks in physician employment contracts. You will be bound to all of a contract’s terms, even the ones you don’t understand.

Mistake #3: Failing to identify the expectations of the employer.

Employment contracts are not all about legal risk. Your contract also outlines your obligations as a practicing clinician. If this is your first job as a practicing physician, it may not be clear to you what that means in terms of time and effort spent completing the various tasks. An experienced attorney can interpret the terms defining your on-the-job duties so you can understand what you’re getting yourself into. And whether your compensation matches that level of effort.

Mistake #4: Pretending this is the last and only job you’ll ever have.

Most physicians won’t stay with a single employer for their entire career. Did you know your employment contract could affect how you practice medicine years after you choose to leave that employer? Most physician employment contracts have terms that can impair your ability to move between employers or to become self-employed. Terms related to professional liability coverage can expose you to significant risk.

Mistake #5: Failing to understand increasingly complicated compensation structures.

The days of simple salary, and even RVU-based compensation have passed. Today’s employment contracts contain a combination of base salary and a web of incentive bonuses or clawbacks based on quality and cost metrics, compliance, shared savings awards, productivity, reporting, and other requirements that can make it difficult for physicians to accurately predict their likely income. Understanding your compensation package, and negotiating clear compensation terms can prevent surprises down the road.

Mistake #6: Relying on the legal expertise of the employer.

It is rare, but employment contracts can contain terms that violate federal and state fraud, waste, and abuse laws, such as the Stark Law and the Anti-Kickback Statute. These laws contain penalties for both sides of an illegal transaction. If you’re not educated about your exposure, you could unwittingly sign an illegal contract. And you’ll be equally culpable.

Mistake #7: Thinking that pushing back on contract terms will lose you the job.

After years of hard work and diligence for little or no pay, and a stressful recruiting and interview process, you finally have a job offer in hand. You’re excited to start a new chapter, to feel more financially secure, and to put your skills and intellect to work. It is common to let excitement get the best of you, and to feel anxious about losing it all if you dare to push back on the terms of your contract.

Resist that feeling.

Employers, especially employers of highly compensated employees, expect questions and challenges. You can’t get the deal you want unless you ask for it. Advocate for yourself. It is unlikely to cost you a job, so it’s all upside!

CONCLUSION

The best time to negotiate your employment contract is before you sign it. Nixon Law Group can best position you for success by:

  1. Reviewing your contract from a legal and experiential perspective. You'll discover how this contract impacts your entire life, from paycheck to liability to work/life balance.

  2. Providing a detailed redlined document identifying key provisions so you can enter into negotiations with the right questions and requests.

  3. Negotiating your contract for you. Our team works directly with your future employer’s HR department to secure the best contract for you.

For more information on physician employment contracts, see our articles on Six Things to Watch Out For In Physician Employment Agreements and Physician Employment Contracts: The Compensation Package.


Contact us to set up your introductory 15-minute consultation so you can enter into your new job with confidence in the future.