Physician Contracts

A ​​​​​contract is a legally binding agreement that defines the relationship between parties with mutually agreed upon duties, rights and responsibilities. When you are given a contract, it is not a letter of intent, a promise, an understanding, or what someone says or thought. They can be very difficult to understand. Therefore, we recommend that you seek out an attorney who specializes in medical contracts to review it with you. Statements like “may”, "to the extent possible,” and “under certain circumstances“ are not guarantees. If it’s not written in the contract, it doesn’t exist.

Basic Contracts

A basic contract may include:
  • Compensation
  • Termination provisions
  • Vacation/holidays
  • CME
  • Restricted covenant (non-compete) term of contract
  • Bonus structure
  • Benefits
  • Call schedule
  • Health insurance
  • Malpractice insurance
  • Licensing and board requirements
  • Practices you will be working
  • Scope of practice
  • Relocation package
  • Student loan reimbursement
  • Tail coverage information

Contracts are very detailed. They are a legal and binding agreement. This is why you should have an attorney review the entire contract for you.


Consider the total package that may include:
  • Sign on bonus
  • Student loan repayment
  • Relocation package
  • Salary
  • Cost of living in the location
  • Training stipend
  • Marketing assistance
  • Benefits
  • Personal expectations
  • Onboarding

Also, know the cost of living in the area you want to live. When you are offered a salary, you can determine if this will meet your family needs. Recently, published the salaries for primary care physicians. Using these types of websites to determine cost of living can be very helpful. 

Malpractice Insurance

Medical malpractice insurance may be provided to you by the hospital, clinic or health system. Your contract should state the amount of coverage. It is one of the highest expenses for a practicing physician. This is a  great advantage of being employed versus private practice. Ask questions about the type of malpractice insurance as you are negotiating your contract, such as is it "claims-made" or "occurrence based?"

A claims-made policy will only provide coverage if the policy is in effect both when the incident took place and when a lawsuit is filed. This requires that coverage must extend for a significant of time to provide adequate protection since a considerable amount of time may lapse between when an incident my have occurred and when a claim is made.  Because of this, some claims-made policies are written to provide a period of coverage referred to as a "tail" that extends coverage for a set amount of time (such as five years) after a policy ends. If not offered as a part of the original policy, tail coverage may also be purchased;  the cost of tail insurance is typically a one-time assessment that can be as much as 1.5 to 2 times a typical annual malpractice insurance premium. Tail coverage, however, is extremely important in situations where you have been covered with a claims-made policy but are changing insurance carriers, moving to a new position, or are retiring, to ensure continued malpractice coverage duging these transition times for incidents that may have occurred in past years. The costs of tail coverage may be covered by your previous practice to ensure adequate protection of their group assests, or by your new practice as either a benefit or an inducement to join the group. Tail coverage may be an appropriate item of negotiation with a prospective new job opportunity.

Occurrence policies differ from claims-made insurance in that they cover any claim for any event that took place during the period of coverage, even it the claim itself is filed after the policy lapses. In general, this type of policy does not require tail coverage, although this type of malpractice insurance is usually significantly more expensive and less frequently offered by employers.

Stay Connected

It is very important to stay in contact with your recruiter, after taking some time to review your contract and seek legal advice. Most organizations would like to have feedback anywhere from 7-10 days. If you are looking at other positions and are not sure about your decision after receiving a contract, just let your recruiter know. A lack of communication leaves a negative impression and could result in being eliminated from the employer's physician candidate pool. They do understand that candidates will look at more than one option so it’s okay to share that with the recruiter. It is helpful to provide the recruiter with a time frame for when you will be making your final decision.