10 Red Flags to Watch For Before Signing Your Physician Employment Contract

Physician Contracts Counsel, PLLC

You matched, you got the offer, and now there's a contract on your desk. Most physicians read it once, feel relieved the job is real, and sign. That is exactly how doctors end up locked into non-competes they can't get out of, bonus structures that never pay out, or malpractice coverage that leaves them exposed after they leave.

A physician employment contract is negotiable. Hospitals, private practices, and health systems expect candidates to push back on at least a few terms. Here are the ten clauses that deserve a second look before you sign.

1. Non-compete scope and geography

Most states will enforce a non-compete if it's reasonable in duration, geography, and scope, though what counts as reasonable varies state to state, and a few states restrict or ban physician non-competes outright. A non-compete that covers a 30-mile radius for two years might sound standard, but in a rural area that radius can mean relocating your entire life if things don't work out. Ask what the actual enforceable range looks like given your specialty, your state, and your location.

2. Termination without cause

Check whether the employer can terminate you without cause, and with how much notice. A 90-day notice period gives you room to find another position. A 10-day notice period does not. This clause matters more than almost anything else in the contract because it determines how much control you actually have over your own career.

3. Tail malpractice coverage

Claims-made malpractice policies require tail coverage when you leave, and tail coverage is expensive, often tens of thousands of dollars. Find out now who pays for it: you, or the employer. If the contract is silent on this, that silence should worry you.

4. Compensation structure and RVU thresholds

If your pay includes an RVU-based bonus, understand the exact threshold, how it's calculated, and how often it's recalculated. Ask for the actual RVU conversion table used by the practice, not just a summary. Vague bonus language is one of the most common sources of physician-employer disputes.

5. Restrictive covenants beyond non-competes

Non-solicitation clauses can prevent you from contacting patients or referring colleagues after you leave. Some contracts extend this to staff as well. Read this section as carefully as the non-compete itself.

6. Schedule and call obligations

"Reasonable call coverage" is not a number. Get the actual call frequency in writing, along with what happens if the practice grows and call burden increases without a corresponding pay adjustment.

7. Signing bonus clawback provisions

Many signing bonuses come with a repayment clause if you leave before a set period, often prorated. Know the exact number and the exact timeline before you count that bonus as yours.

8. Benefits vesting and CME allowance

Retirement contribution matching, CME funding, and licensing fee reimbursement often have vesting schedules or annual caps buried in an exhibit rather than the main body of the contract. Ask for the actual numbers, not the marketing description.

9. Ownership or partnership track language

If the offer includes a path to partnership or ownership, get the specific buy-in requirements and timeline in writing. "Eligible after two years" without a defined process is not a real path, it's a talking point.

10. Assignment and change of control clauses

Private practices get acquired by health systems more often than most physicians expect. An assignment clause determines whether your contract terms survive that sale, or whether the new owner can rewrite your deal.

The bottom line

None of these red flags mean you shouldn't take the job. They mean you should negotiate before you sign, not after. A contract review before signing costs far less than trying to unwind a bad clause two years into the job.