Physician Contract Review: 12 Clauses to Check

A careful physician contract review is one of the most valuable steps you can take before starting a new job, joining a group, or signing on with a hospital or private equity-backed practice. Physician employment agreements are long, written by the employer's counsel, and full of terms that may not matter on day one but matter a great deal if the job does not work out.

This checklist walks through 12 clauses physicians commonly ask about and the questions worth raising. It is educational and is not legal advice. Contract terms and their enforceability vary by state, so an attorney licensed in your state should review your actual agreement.

Key takeaways

• Read the contract from the perspective of how the relationship might end, not just how it starts.

• Termination, restrictive covenant, and tail coverage clauses tend to create the most disputes later.

• Ask for every document the contract references, such as bylaws, policies, and compensation plans, before you sign.

• Many terms are negotiable, but only if you raise them before signing.

Before you start: gather every document

Employment agreements often refer to separate documents: a compensation plan, a benefits summary, medical staff bylaws, or group policies. Those documents can change the meaning of the contract. Request them all, along with any amendments, so the review covers the complete agreement.

The 12 clauses to check

1. Duties, schedule, and call

Look for a clear description of your clinical duties, work locations, expected schedule, and call frequency. Vague wording such as "as assigned by the employer" can allow significant changes later. Ask whether call is shared equally, whether extra call is compensated, and whether you can be assigned to new locations.

2. Compensation structure

Understand how pay is calculated, whether as a base salary, a productivity formula such as work RVUs, collections, or a combination. Key questions include how productivity is measured, who controls the data, how often it is reconciled, and what happens if the formula changes. Ask for written examples showing how the formula works.

3. Term and renewal

Check the length of the initial term and whether the contract renews automatically. Note any deadlines for giving notice if you do not want to renew.

4. Termination without cause

Many agreements allow either party to end the contract without a reason after a notice period. Compare the notice period for each side, whether the employer can shorten it by paying you in lieu of notice, and how without-cause termination interacts with your non-compete and tail coverage obligations.

5. Termination for cause

Review what counts as "cause." Broad definitions, such as failure to meet undefined standards, give the employer more discretion. Ask whether you have a right to notice and an opportunity to correct a problem before termination.

6. Restrictive covenants (non-compete)

A non-compete limits where and for how long you can practice after leaving. Check the geographic radius, how it is measured, how long it lasts, which locations it covers, and whether it applies if the employer ends the contract without cause. Some states restrict physician non-competes and others enforce them more readily, so local legal review is especially important here.

7. Non-solicitation

Separate from a non-compete, a non-solicitation clause may prohibit contacting patients, referral sources, or staff after you leave. Understand how it affects your ability to notify patients of your departure, which some state rules address.

8. Professional liability coverage and tail

Your agreement should say who provides professional liability coverage while you are employed and who is responsible for "tail" coverage after you leave if the policy is claims-made. Check whether responsibility for the tail changes depending on who ends the relationship and why. An independent insurance professional can explain coverage types; the contract question is simply who is responsible.

9. Outside activities

If you plan to do expert witness work, consulting, teaching, locums, or medical directorships, check whether the contract allows it and who keeps the income or work product.

10. Signing bonuses, relocation, and repayment

Bonuses and relocation payments often come with repayment obligations if you leave before a set date. Review how repayment is calculated, whether it is prorated, and whether it applies if the employer ends the contract.

11. Assignment and change of control

Assignment clauses determine whether the employer can transfer your contract to a new owner, such as after a merger or a private equity acquisition. If the practice is sold, your non-compete and other terms may follow the contract to a buyer you did not choose.

12. Dispute resolution

Check whether disputes go to court, mediation, or binding arbitration, which state's law applies, and who pays legal fees. These terms shape your options if a disagreement arises.

Other terms worth a closer look

• Licensing and credentialing: who pays for licenses, DEA registration, board certification, and credentialing, and what happens if credentialing is delayed.

• Records and patient access: whether you can access records needed to defend a claim after you leave.

• Partnership track: if a future ownership opportunity is promised, whether the criteria and buy-in terms are in writing.

• Benefits description: whether benefits are described in the contract or only in documents the employer can change.

How to approach negotiation

Many physicians assume the contract is a take-it-or-leave-it form. In practice, employers often accept reasonable requests, particularly on notice periods, call schedules, tail responsibility, non-compete scope, and repayment terms. A few principles help:

1. Prioritize. Focus on the two or three terms that matter most to you.

2. Ask for clarity before changes. Many issues are solved by defining a vague term.

3. Get it in writing. Verbal assurances from a recruiter or department chair are not part of the contract unless written in.

4. Leave time. Review takes time, so avoid signing under a short deadline.

When to involve an attorney

An attorney who regularly reviews physician agreements can explain how your state treats restrictive covenants, flag one-sided terms, and suggest language to request. This is especially useful for a first attending job, a move to a new state, joining a private equity-backed group, or any contract with a partnership track. We can introduce you to an independent attorney we partner with who reviews physician contracts. Our article on why physicians benefit from a business attorney explains more.

Specialty sites in our network also cover legal topics by specialty, including orthopedic, plastic surgery, and ENT business and legal planning. Contract review is only one part of the picture, and our overview of when physicians call a healthcare business attorney covers entity, partnership, and transaction questions too.

Frequently asked questions

What should a physician contract review include?

A full review typically covers duties, compensation structure, term and termination, restrictive covenants, tail coverage responsibility, outside activities, repayment terms, assignment, and dispute resolution, plus any documents the contract references.

Are physician non-competes enforceable?

It depends on state law and the specific terms. Some states restrict physician non-competes, while others enforce reasonable ones, so local legal review is important.

Who pays for tail coverage when a physician leaves?

The contract decides. Some agreements make the physician responsible, some the employer, and some split it depending on who ends the relationship and why.

Can I negotiate a physician employment contract?

Often, yes. Employers frequently accept reasonable changes to notice periods, call, tail responsibility, non-compete scope, and repayment terms when they are raised before signing.

Can you review my contract?

We do not provide legal services. We are an introduction service, and we can introduce you to an independent attorney we partner with who reviews physician agreements.

Request an introduction

If you have a contract to review, call (972) 616-4581 or contact us to request an introduction to an independent attorney we partner with. You can also browse more articles in our Knowledge Center.

This article is general information, not tax, legal, or investment advice. Please read our disclaimer.