A physician’s employment contract is a legally binding contract that sets out a doctor’s salary, work responsibilities, benefits, and potential future employment opportunities. For new doctors entering the profession, having a lawyer review the contract is not just a helpful thing to do – it is a crucial step to ensure long-term success.
Overview of Physician Employment Contracts
Every doctor will have their first job with a contract that, on the surface, looks uncomplicated. Physician contracts, however, include extensive terms about salary, hours of work, insurance, and what happens if and when the agreement ends.
Unlike a standard job offer, a physician contract can place restrictions on where and how a doctor can practice medicine for many years. Getting legal advice from Michael Johnson Legal is well worth it for new doctors so they can understand the terms of their employment agreement and avoid any surprises or hidden risks.
Why is it Important for Doctors to Have Legal Review
Employment agreements often use legal and financial language that is difficult to interpret. Some provisions may look innocent but turn out to have chronic consequences later on.
An example is “non-compete” provisions that can prevent a doctor from working in a specific location even after they leave their employer. Without a legal review, doctors risk signing contracts that limit and restrict their freedom, pay, and potential career development.
Common Red Flags in Physician Contracts
Not every contract that a doctor receives is intended to be fair and equitable. The most common issues physicians face, and essential red flags, include:
- Unreasonable non-compete clauses that limit future employment prospects.
- An unreasonable call schedule or work obligations that do not match reasonable compensation.
- The employer might require the doctor to cover malpractice insurance premiums.
- Termination without cause allows the employer to revoke the contract precipitously.
Identifying these red flags early can help doctors take ownership of the process and negotiate terms in their agreement more effectively.
Role of Attorney in Protecting Physicians’ Future Careers
Attorneys can be instrumental in interpreting and translating dense legal text into a report that is usable by a physician. They provide insight into possible legal liabilities, negotiate better compensation, hours, or breaks, and ensure contractual agreement terms meet state and federal compliance.
A competent attorney will also protect against future disputes or lawsuits by ensuring the terms of the contract are clearly identified and remain fair. This type of help may be especially significant for a new physician who may feel an obligation to accept the first job offer that they receive.
The Potential Financial Risks of Not Having Legal Review
The financial risks of signing without legal review are not nominal. A poorly written contract may lead to losing salary, lost benefits, or any other financial obligation, such as indemnity of malpractice insurance on behalf of the physician alone.
A physician’s contract with terms that did not allow a physician to pick benefits offered on behalf of the employer could violate the American Medical Association’s (AMA) principles for medical ethics.
Nearly 35% of physicians report regretting not opening negotiations of their first contract; the most common reasons were receiving lower compensation or a lack of freedom in their chosen practice. While the cost of hiring an attorney may be a nominal fee, the protection that comes with that fee allows for future savings.
When to Work with a Contract Lawyer
Physicians should seek legal review before signing any employment agreement. Once that contract is signed, it becomes challenging to negotiate any changes.
Then legal review is as important when a contract needs to be renewed, at the end of a renegotiated, more extended employment contract, or when moving to a different hospital or state. And because each state has a different set of laws about non-competes and practice laws to consider, it remains essential to find local guidance.
Summary Box
- A physician contract defines salary, work hours, malpractice insurance, and long-term job options.
- Having an attorney review the contract helps balance risks and secure fair terms.
- Common red flags include strict non-compete clauses, unfair call schedules, and termination without cause.
- About 35% of physicians regret not negotiating their first contract.
- A healthcare lawyer can save money, protect financial security, and safeguard career freedom.
