Healthcare Employment Contracts: Key Terms to Review
Healthcare employment contracts for physicians, nurses, and other providers contain industry-specific provisions that can have long-term consequences for your career and finances.
Critical Clauses to Review
- Compensation structure: Understand the base salary, productivity bonuses (RVU-based compensation), quality incentives, and how they interact. Get clarity on how RVU targets are set and whether they are realistic based on the patient panel.
- Non-compete and restrictive covenants: Non-competes are particularly impactful in healthcare, where patient relationships and geographic constraints matter. Review the radius (commonly 10-25 miles), duration (1-2 years), and whether it covers all services or only your specialty.
- Malpractice insurance: Determine whether the employer provides occurrence-based or claims-made coverage. With claims-made policies, you may need "tail coverage" when you leave, which can cost tens of thousands of dollars. Negotiate who pays for it.
- Call schedule and coverage: Review on-call expectations, weekend coverage requirements, and whether additional call is compensated.
- Termination provisions: Pay attention to notice periods (typically 90-180 days in healthcare), without-cause termination rights, and what happens to your patient panel.
- CME and licensure: Ensure the contract provides adequate time and budget for continuing medical education and covers licensure and board certification fees.
Red Flags
- Unrealistic RVU targets that make bonuses effectively unachievable
- Tail coverage responsibility falling entirely on you
- Non-competes with excessive geographic scope in areas with limited opportunities
- Vague "duties as assigned" language without defined scope of practice
When to Consult a Lawyer
Healthcare contracts are complex and specialized. Consider hiring a healthcare contract attorney, especially for physician employment agreements where compensation structures and restrictive covenants can have career-defining implications.
This article is for informational purposes only and does not constitute legal advice. Consult a licensed attorney for guidance specific to your situation.