5 Tips for Evaluating a Physician Job Offer
You’ve just received your first employment offer from a hospital or medical group, but do you know how to read it? Whether it’s your first job out of training or if you are a seasoned physician, reviewing an employment agreement can be overwhelming. The following 5 tips for evaluating a physician job offer will help you focus on the important areas of the contract that you need to pay attention to and also provide you with some initial questions to ask yourself or potential employer.
Have a good understanding of not just what you will be paid, but HOW you will be paid. Will you be paid a straight salary? Salary plus RVU production? If there are bonuses make sure you understand how and when bonuses are paid out throughout the year, be it monthly, quarterly, or at the end of the year. Also, make sure you have a thorough understanding of what benchmarks need to be met in order to obtain bonuses be it production or quality bonuses. If the contract dictates that you switch over to 100% production at any point, make sure you know what that means and how it will affect your earnings. If possible, ask to speak to other providers in the organization who are on 100% production so that you know what to expect and what you need to produce in order to obtain the earning potential you need to be comfortable.
2. Partnership or Shareholdership
Find out if there is partnership or shareholdership potential and if so, when that kicks in after the first year. Ask to have it defined in the actual contract and if not, then get an understanding of when other recent hires have obtained that status. Also, make sure you understand the buy-in (if any) so that you know what to expect to pay if you get to that point with the group. If there is a buy-in, make sure you have an explanation on what to expect with the rate of return on the buy-in. Find out the implications if you leave the group after obtaining partnership or shareholdership status. Is your buy-in returned to you? Will you need to convince the other partners to buy you out? Know what you are getting into before getting into it.
3. Contract Terms
How long is the contract and how can you get out of it if the position is not the right fit? Is there any pay back if you receive a salary, signing bonus or relocation assistance? Also, who will be covering your malpractice tail insurance? Are there miscellaneous fees you have to pay back like recruitment expenses? No one wants to plan on leaving a situation before you even get there but you want to make sure you are protected in the worst case scenario. Prepare for the worst and hope for the best.
4. Tax Implications
Understand the tax implications of your contract. If you are moving into a new state, get an understanding of how that state’s taxes work regarding income. Here’s a resource for comparing state tax rates. Also, get an understanding of the tax implications of your contract structure. Employment agreements are taxed differently than independent contractor and income guarantee agreements. Production bonuses and other types of bonuses can affect your tax situation too. If possible consult with a tax attorney to see how you will be affected.
5. Contract Review
Make sure you have someone reviewing your contract that is familiar with physician contracts. They will understand the nuances of a physician contract better than anyone else and will be able to give you a good understanding of what can and what cannot be changed in the agreement. Ask for referrals from your physician friends or if you are working with a Fidelis Partners recruiter on your search, we can provide you with a referral to a reputable and experienced lawyer.
Have specific questions about a contract? Share them below by commenting or send us an email (email@example.com) for a one-on-one consultation.