Three Red Flags in Your Physician Contract - Passive Income MD

Three Red Flags in Your Physician Contract

September 19, 2017 • 3 Min Read

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Today’s guest post comes from Jon Appino of Contract Diagnostics. His firm is the country's only firm dedicated 100% to reviewing physician contracts. Think contracts are all the same and do you wonder whether you should have someone review them? Well, he shares with us some commonly overlooked red flags that physicians should be aware of when reading through a contract.  Take it away, Jon.

There are hundreds of variables to consider when we as professionals review physician employment agreements.  It is vital these key items are detailed in the agreement before you sign it. 

  1. Your Schedule

The first red flag has to do with your schedule. Make sure it is detailed with hours and a specific location.  Verbal promises of a certain hospital or ‘no nights or weekends’ may be taken back if the contract lacks specifics, and the employer’s business needs coverage. 

2.  Your Compensation Structure

The next ‘red flag’ is not understanding your compensation structure. These can be very difficult to understand, especially if there are bonuses (production, quality, other various metrics) or specific calculations involved on a monthly or quarterly basis.  Make sure you get the appropriate reports and have a good expectation of what they expect of you in meeting certain targets or metrics.  If you have certain expenses allocated to your production, make sure you understand the fixed and variable expenses and what you can control. 

3. Your Termination Clause

The last ‘red flag’ can lie in your termination clause. It’s important to understand how it affects the rest of the contract.  If you are terminated for different reasons (for cause or without cause), how is your non-compete affected?  What happens to the ‘tail’ insurance provision?  If you are due a bonus, will it be paid?  These are often important negotiation points for physicians all across the country. 


The three areas detailed here are very important points, but the biggest ‘red flag’ is not having a professional review your contract.  Physicians spend too many years and commit too many dollars training themselves to not invest in a professional who reviews physician contracts.  

Jon Appino is the Principal and Founder of Contract Diagnostics, a national firm that specializes in reviewing Physician Employment Agreements. Their proprietary review process focuses around educating their Physician clients on how to negotiate and ask for things, what specifically to ask for, and an overall view of the ‘deal’. Not a law firm, they provide overall ‘deal’ advice in a much more comprehensive manner than a traditional lawyer would.  While their attorney’s review every contract, it is presented in a much different way based on your specific situation. Private Practice vs Hospital employed? Hospitalist vs Trauma Surgeon? California vs Florida…they are familiar with all the nuances of each specific situation and would love to help with yours.

Disclaimer: The topic presented in this article is provided as general information and for educational purposes. It is not a substitute for professional advice. Accordingly, before taking action, consult with your team of professionals.

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