[Editor's Note: Here's another guest post I strong-armed the author into writing. He sent me a long email suggesting I write more about contract negotiation, and then described his recent experience. His email was basically a half-done guest post already. So I asked him to finish it up and send it over, which he did. I did a little editing and Voila- a great post. The writer wishes to remain anonymous, but we have no financial relationship. If you do need help with contract review, check out this page for WCI-vetted recommendations.]
Dear WCI,
I work in the tech field for an analytic company and my wife, who is a doctor about to finish her fellowship recently turned me onto WCI. I started reading a lot of your blog posts and I just finished your book. I have one very important blog topic suggestion for you: Contract Negotiations and Review.
When my wife was applying for places she received an offer from just about every place she applied (and she applied to a lot of places). However, some of the offers (and some offers made to some of her colleagues) were horrible. If you just looked at the salary, you might think you were making $750,000 per year, but if you don't see the fine print where it says that you need to be COLLECTING (not just billing) more than that, then you get almost nothing. So I decided to write a few tips that others in a similar situation might find useful.
Tip #1 – Start Looking ASAP
My wife went to a fellowship and she started interviewing for positions 6 months before the start date (not the end date) of the fellowship. She looked at a lot of places and she signed a contract fairly early into her fellowship. This gave us confidence that if the fellowship didn’t work out the way we intended she could start her other job early, and she wouldn’t have to rush later on. We are always making back up plans.
Tip #2 – REALLY Understand How You Are Paid
This should seem obvious but it is very easy to see large dollar values in a contract and get star struck. Avoid contracts where your salary is 100% based upon collections. I have heard of one doctor who ended up making only $80,000 a year because of it. In other job sectors we call it “commission.” I understand some doctors hate that word, but that is the word we call it in other industries. Even if you are just expecting a productivity bonus, you should be asking a lot of questions.
Ask for some examples to be included in the contract. Is the amount based on how much they bill for or how much they collect? As someone who has worked in the debt collection industry, medical debt is one of the least collected upon forms of debt. How much do they take out for overhead? How do they collect their debt? (You may not get anything specifically useful out of this, but if you benefit from their ability to collect what they are owed, then you should be interested in how efficient they are at collections). How are you going to know how much they have collected? (Make sure they are transparent). You should know everything they are going to take out and each time you see a patient you should know how much you are going to get paid. Likewise you should understand exactly what is expected from you to get a non-productivity bonus, and for how much. If they say that everyone gets one, then great…let’s just make it a guaranteed bonus in the contract. A bird in the hand is worth two in the bush.
Also before you enter into contract negotiations, you should read about and understand Relative Value Units (RVUs). It’s not something you would have to deal with in residency but may be very important when you become an attending. Just like with knowing about how a productivity bonus will get calculated you may need to know how your salary is impacted by your RVUs. How many RVUs do you get from a new patient? How many RVUs do you get from an existing patient (follow ups)? If you can find a friend who is in a similar field, you might want to ask them the same questions to see if the answers line up.
Tip #3 – Get Everything in Writing
Are they going to provide money for licensing, travel reimbursement, Paid CME days, if so, how many? Anything that you agree upon, make sure it is in writing in your employment contract. If you don’t, then it may be very hard to get in the future. Even if verbal contracts are valid in your state, and they PROMISED it to you, you should have an email proving it … The effort to try and get them to deliver it later on may be greater than you expected. Think of it like this…if it is not in writing it doesn’t exist.
Tip #4 – Bonuses Aren't Guaranteed
Always go into it assuming you won't get your productivity bonus. Make sure your base salary by itself is adequate for your needs. No matter what they tell you verbally, I am very skeptical about anything that is not guaranteed. Even if you have done everything right and asked all the right questions, I am always amazed at the ability of a big company to find a way to not pay you what you think they owe you. You don't want to hear these words, “Sorry, you must have misunderstood how the productivity bonus worked.”
Tip #5 – Make Sure They Provide Malpractice Insurance
Most hospitals provide malpractice insurance but what younger doctors don’t know is that there are several nuances to insurance. There are 2 types of insurance:
- Occurrence Policy – This will cover you for an incident regardless of what policy you have when a claim is filed in court.
- Claims-Made Policy – This is the most typical type of insurance and will not cover you if you are under a different policy at the time a claim is filed in court. If you have a claims-made policy and switch jobs, you will need either tail coverage or nose coverage.
- Tail coverage – This covers you in case of patients that you have treated in the past sues after you have left the practice and you have a Claims-Made Policy. This can be very expensive to buy individually. I have heard one quote of $10,000 per year, for each year you were at the practice. [Mine was $55K when I started with my partnership-ed.] INSIST that they cover this or walk away, otherwise you could be financially trapped. [Editor's Note: Don't be surprised if they say no. My group would have told me no. But that doesn't mean there isn't room to negotiate. For instance, my group agreed to cover it if they fired me, but I would have had to cover it if I quit. Luckily we have since changed to occurrence coverage, so this isn't an issue for new hires.]
- Nose Coverage – This covers you in case a patient that you treated, sues you before you started working at your current practice. If you already have a contract at your current place where they don’t offer tail coverage, you can try to get your new employer to provide nose coverage. Typically insurance companies don’t want to do that. A patient can sue a hospital and you, and it’s easy for the former hospitals’ insurance company to cover both you and the hospital for the same event. An insurance company at a new office typically won’t want to bother with it, but it’s something you can at least try for if you're already stuck buying your own tail.
To Summarize: In your contract insist that they either have an Occurrence Policy or provide Tail coverage on a Claims-Made Policy [or otherwise compensate you sufficiently that buying your own tail in certain situations would be an acceptable outcome to you.-ed]
Yes, that's snow in the background, thus the wetsuits!
Tip #6 – Don't Overpay for Contract Review
I read somewhere on this website that someone had paid $3500 for contract review. In my opinion, that's way too much. We paid about $500 and it was well worth it. I have heard of people paying less than that. You should be able to have a conversation with the person who is doing the review. You may not know legalese and the nuances to the contract but if you tell the reviewer generally what you want to do, and what you are looking for, they should help you look for red flags. If you tell the reviewer that you may want to open up your own practice in a few years, then they should be on the lookout for what happens when you want to get out of the contract.
Tip #7 – More Vacation!
After money details are worked out, ask for more vacation. At least in the tech world, I have never heard about someone who was is in contract negotiations and was not given at least a little more vacation when they asked for it. In the doctor world, it can get a little dicey when RVU’s are thrown into the mix, which is why it’s best to leave this for the end of negotiations.
[Editor's Note: This is a good place to throw in a few extra tips included in the email to me that this author thought were too obvious to mention. I didn't think they were all that obvious, and I've read a few books on negotiation:
- Ask for a sign on bonus
- Let them make the first offer and just ask for more of everything
- For your first offer, ask for just below the price that you think would make them throw you out of the room
If this sort of thing is not obvious to you either, I would suggest some good books on negotiation.]
Tip #8 – Restrictive Covenants
Restrictive Covenant is fancy lawyer talk for a non-compete clause. The terms and legality of this can vary quite a bit from state to state, but you should really think about whether you can live with the terms. If the terms are that you cannot practice within 100 miles (which was actually the case for one doctor in a different post on this site), that means that if you leave, you are either going to have to move, or you will have a very long commute. [Don't assume any non-compete is not enforceable. Even if it isn't, it may cost you something to defend yourself.-ed]
Tip #9 – Terminating Employment
Know the results of breaking your contract. It’s easy to get swept up in the excitement of a lucrative contract with a great bunch of people. However, sometimes things don’t work out the way you planned. Knowing what happens if things don’t work out gives you options. If something does happen, then always try to leave on the best possible terms.
Tip #10 – Don’t Be Afraid to Walk Away
There are some things that may be non-negotiable to you and others that you could be flexible on. Figure those details out as soon as you can, and certainly before you start looking at the contract.
Well that’s all that I have about things to ask for in a physician contract. I was just trying to share a few tidbits that my wife and I picked up along the way. I know that a few of the tips can be expanded into entire posts, but I tried to keep it brief and semi-generic. It seems that anything doctor related can get very specific very quickly.
What do you think? What tips do you have for those negotiating contracts? Comment below!
This can be very expensive to buy individually. I have heard one quote of $10,000 per year, for each year you were at the practice. [Mine was $55K when I started with my [Editor’s Note: Don’t be surprised if they say no. My group would have told me no. But that doesn’t mean there isn’t room to negotiate. For instance, my group agreed to cover it if they fired me, but I would have had to cover it if I quit. Luckily we have since changed to occurrence coverage, so this isn’t an issue for new hires.]
[me] so what was the plan if things went south and you wanted to quit? 55k is a big expense just to change jobs
Ack I was copying pasting on an iPhone and did a horrible job… The above comment was to wci about the editors note
The expense to change jobs is a whole lot more than just the tail. In my book “The Doctors Guide to Starting Your Practice Right” I detailed a friend of mine who changed jobs and it cost more than $175,000. Another friend of mine stated in an interview I did with him that you can expect to spend a minimum of $50,000 to $75,000 every time you change jobs. Best to get it right the first time and not have to change.
My plan was to pay the $55K if I couldn’t get my new job to cover that cost or get a cheaper nose policy as part of my new job. Actually, I would have known the job sucked within a few months and the tail was quite a bit lower then. The $55K was a fully mature (5 year) tail.
Bonuses are not guaranteed. Remember that. We never once got one in our initial jobs. Ask for sign on bonus instead and higher base pay. Curious if other readers out there actually saw any bonuses in their initial years.
I was promised a bonus of 150% of my base. Sounded too good to be true.
Year 1 bonus was < 10% of my base. I was furious. Year 2 bonus was 175% of my base. I was ecstatic. In the end, I do agree with asking for a higher sign-on bonus and higher base pay at least for the first 1-2 years if the group is forcing you to go all production or all commission. It will give you at least 12 - 24 months to see how their business really fares.
So, averaging the two years you were given about 2/3’s of what you were promised. Are you still in the same job? And, if so, what happened next. We left our initial jobs many years ago. Our lack of bonuses was due to poorly run business models and not our personal work ethic.
Similar circumstances, I asked out after Year 1. There were some extenuating circumstances for why that year was so financially unrewarding but I told the administrators that I didn’t think things would ever improve to the point where I would receive what they were promising.
They actually moved me to a different hospital. I was so pleased with Year 2 that I ended up staying behind on an all productivity contract. Even within one company, different hospitals and how they are run can make a huge difference as to how you are paid.
The company was willing to work with me and continue with a base + bonus model but as I felt comfortable charting my own collections, I opted to go pure collections just to get my hands on the money quicker (instead of waiting til end of year)
They were very open in terms of sharing revenue sheets and numbers. I’ve always felt that companies that are unwilling to do this are hiding something (maybe bitter and cynical but hey, better to be safe than sorry)
Some good lessons in your response. Thanks for sharing. Perhaps the most important is that like Hatton below, you spoke up. Best wishes for your future!
Thanks! Hatton’s experience also brought up a couple more tips:
1) It is written in my contract that I have a quarterly report sent to me to review how much I’m billing, how much I’m collecting, and my year-to-date bonus numbers. This will likely differ from workplace to workplace but I would ask to take a look at least halfway through the year to make sure the year end bonus isn’t a gigantic disappointment. I would be wary of companies that do not allow for this transparency. This is even more important for those with multiple income streams (e.g. if you get paid a different % for academic productivity, research, teaching, cosmetic cases, J-codes, midlevel supervision, product sales, surgeries, etc)
2) It is also written in my contract that I am due my bonus in full 30 days after the financial year ends.
My experience was complicated by a practice that would not let anyone see the books. After I left a couple of docs who were disappointed by their bonus demanded to see the books and they discovered the locks were changed the next day. If you find yourself in such a situation I recommend cut your losses and move on. Unethical people do not become ethical with time.
When I was in a very large OB/GYN group in another city right out of residency I was promised a productivity bonus. After the first year my salary increased as agreed. No bonus appeared. I assumed that I was not productive. After several months I finally said something and the response was “oh, we forgot…here it is”. No explanation was ever given as to how it was calculated.
Great article, remember you may be negotiating a million dollar contract, treat the encounter as such. Also be mindful of the length of contract 3 years later you are making less. Read a book on negotiating IT is what you are doing so best if you know how or hire help.
Be aware ,I was notified by my mal ins that after 5 years my tail was waived . After 30 years I was hit with a 10K bill. It was only waived if I retired. I did complain and was able to split the bill. Saved 5K with a phone call. It never hurts to ask!
As a whole this post does discuss important topics. But, I’m amazed at the ignorance of doctors on how they get paid. In this post Tip #2 displays this ignorance. If physicians better understood how they get paid, and how the insurance system works in our country, they would have a much better grasp of how MUCH they can expect to get paid.
“Avoid contracts where your salary is 100% based upon collections.”….This is just plain horrible advice in some situations. Many contracts which are 100% based on collections can be far more lucrative than those that are salary based.
Do people not understand that what is billed to any insurance company or medicare can be as high as you want, but the contract you have negotiated with said entity is all you can collect….from either them or the patient? This is something that is clearly not well understood by this writer. I am usually pretty quiet with any critiques on a post, but some of what is written here is just plain wrong from a financial aspect.
Maybe I just woke up on the wrong side of the bed today, and although I feel contract negotiations are highly important, this post could have used some extra editing.
You can’t expect a new attending to be an expert on insurance, billing, and collections. That is knowledge that may bloom over time, but also may not. I also am unclear about your statement of “Do people not understand…” Because I think you and the writer are saying the same thing. That it’s easy for people to talk about high billings but have the contract refer to the much lower collections.
If you go the 100% collections route you should be guaranteed a minimum. Otherwise you could end up with a lot lower salary than you originally expected. Especially for a new attending.
The contract I am referring to is the contract between the practice and the insurance company. For example, I can bill an insurance company or Medicare $10,000 for a simple yearly exam. However, if I am contracted by that insurance company/Medicare to be paid $120 for a yearly exam then it really doesn’t matter how much I bill. I will only be able to collect $120. Every insurance company pays a slightly different amount, so to avoid getting paid less than one is contracted, typically the practice bills about twice average payment. So if most insurances pay 120 dollars a practice might bill 250 dollars for an exam. Billings and Collections are two completely distinct entity. Unless you are a cash pay only practice, no medical practice or professional gets paid based on billings. Just get that thought out of your head.
Agree that one should be offered a guarantee the first 1-2 years out of residency. However, for a practice to offer a permanent guarantee does not mean it is better or worse than a practice that transitions a physician to 100% collections. I would argue a guarantee usually means something worse. If the physician is fairly compensated based on their collections it allows them to be much more aware of what they should be making and also encourages them to be more productive. If one wants a guarantee then they should work for the government or in an academic setting. However, if a physician thinks a guarantee gets them better compensated then that assumption is WAY off.
I agree with that last statement. The person taking the risk makes the extra money in good times. I am a big advocate for doctors to own their job.
Agree seems the author and commenter were saying the same thing. Otoh, one of the first things a new attending should make themselves an expert in is billing, collections, rvus, time/pay per procedure, etc….and it is really not that difficult of a subject. Most doctors simply refuse to ever learn it or look at it much. Instead of trying to increase collections and get money they already earned many just work more.
Learn the system, not so difficult. Im cash only (but similar nuances arise re: case mix), but my friend did exactly the above and runs a very efficient practice right out of the gate.
i recommend going to a coding course if you haven’t before
Collections means more than just the rate negotiated with the insurance company. Many people with high deductible plans never pay the deductible, and many people without insurance never pay at all. In many emergency departments in my city, 40% of patients never pay a cent, yet they retain the right to sue and complain.
If pay is based solely on collections, people start to cherry pick patients.
Another ED-specific issue is whether pay is hourly, RVU only, or a combination of the two.
If it’s just hourly, docs get lazy very quickly. If it’s just RVU assigned to the doc who dispositions the patient, you will often work hard for a patient but not earn anything when you sign the patient out (waiting on MRI or a consultant, psychiatric hold, etc.). It’s good to have a combination of the two.
True,
I oversimplified collections for time/brevity….But a statement like this one above “but if you don’t see the fine print where it says that you need to be COLLECTING (not just billing) more than that” shows a horrible misunderstanding of how the world works. Collecting is far more than just negotiated rate. But suggesting that “billing” has anything to do with how one gets paid is silly. This is not a hard concept for anyone to understand. The fact that anyone even thinks that “billing” is how they will be paid shows a true lack of understanding.
I had a job where the contract stated I was paid about 15% of billing. The books were opaque and questions were unwelcome, so I had no way to verify anything. My best guess is that the group collected about 30% of billing and this is what trickled down.
I agree it isn’t a good method because it’s too vague.
I work at a hospital that had negotiated a contract with a neurosurgeon that specified the surgeon was paid based on a percentage of their billings, not collections. The hosptial lost millions until the contract could be renegotiated. I suspect the administrator who negotiated that one lost their job, although I never heard. Ironically, the surgeon developed back problems at a young age and had to leave medicine.
Probably secondary to filling/typing in all those procedure codes. Cant believe the hospital let that go on for any time period.
I have to agree with Napoleondynamite- the advice to “avoid contracts where your salary is 100% based on collections” should not be applied universally. Not every doc is employed. For a private practice group (I am an anesthesiologist) this is a common method of reimbursement. As long as everyone in the group has their pay based on production this can be a very fair compensation method. Those that take more vacation make less; those that take more call and pick up more cases make more. Production based compensation can be even more fair when the group utilizes a blended unit (again, common).
I also think that the advice to ask for or to expect a sign on bonus is poor advice. In an egalitarian group like mine where everyone has the same contract there is no way we are going to give the newbie a bonus. Newbie can show up and start generating production just like the rest of us.
Similarly, asking for “more of everything” is not going to go over well when everything (expenses, vacation, call) is divided up equally already is not going to sit well with one’s prospective new partners.
Perhaps this advice is applicable to an employed model, but if evaluating a contract with a private practice group that is treating everyone equally already I don’t think it would be helpful to ask for more than the docs already practicing have in their own contracts. We would pull a job offer in a heartbeat if a new hire starting playing games with us over a fair contract.
There are definitely nuances and not everything translates directly or applies in every case. Even in private practice not everyone has the same contract, etc…Obviously if youre handed an excellent contract there is no point in messing it up just to follow some plan.
This is a great point, you need to know who you are negotiating with, and how in demand your specialty is. It is fine to negotiate with a hospital or a bunch of administrators, you need to be more careful negotiating with physicians that all signed the same initial contract. Physicians think very differently than administrators and are not used to negotiation.
Our contracts with pre-partners are similar. There isn’t much negotiating room because it is already treating you fairly. If you don’t like it, there will be someone else who is more than glad to join such a great partnership.
Wait, MT, you would PULL an offer because someone tried to negotiate?!? Why not just come back and say, “Sorry, here is the final contract. We hope you will join us on these terms but, if not, we’re sorry we couldn’t work it out.” I believe pulling an offer is grossly unprofessional.
Contract review by a lawyer really shouldn’t be more than a few hundred dollars.
Two things: in my contract, it says regarding tail coverage, “shall be obtained by the medical group” (or some wording). The key word “shall” in legal contracts means “will” So they “will” buy tail coverage.
Second, as a resident I went to a financial firm dinner, and they slyly told the unsuspecting other residents that they could review contracts if hired as the financial consultant. This intrigued the residents. What the residents didn’t catch was that the pro’s had prefaced or snuck in that what they were referring to was reviewing a contract in terms of benefits. So although they made it sound as though “contract review” from a legal sense, what they had implicitly worded prior to it was meant to be, “review a contract from the benefits perspective to help you with your financial planning”
I caught it, but the other residents thought they meant legal review.
Are you a goofy rider or just good with both feet?
Best question of the post/comments 😉
Not me. But I’m working on my goofy skills.
Nice summary of important information. I teach residents similar material and they find it extraordinarily helpful. Another tip: I tell them to focus on what they will make in year three. That gets you past any sign-on bonus, guarantees, partnership costs, etc. Get a reasonable picture of what that year will look like. Too many get sucked into low performing jobs by a big sign on bonus or first year high salary. Also I wouldn’t necessarily always avoid a contract based on collections. I was 100% “eat what ya kill” for the first five years of practice and I made more money in that job than anywhere else. You just have to have a realistic picture of when and how much money will be coming in.
Does anyone have any experience with “patient contact hours” for ambulatory FM? Admin has recently told us they want to Increase ours to 38/week. Does not include calls, notes, labs, Med refill requests in the hours. I’ve never heard of this before. Is this the new way we will start getting compensated? No more RVU?
Totally depends. Are you getting paid per hour of clinic time or for patients seen/rvus generated?
100% salary with wrvu production bonus potential. Nothing contract says anything about “contact hours.”
That is a lot of hours for most physicians. I would try to keep clinical requirements in the 30-35 hours per week.
Sounds like a recipe for burn out, tell them you need to be in control of your hours.
R. Patel, in my large, multispecialty group, administration has set a minimum number of “patient contact hours” for all office-based (non-surgical, basically) primary care and specialty departments. For most departments, that number is 35. There are a few departments that are down as low as 32 (derm, for example, because of the time spent reading dermatopathology slides).
We are still compensated based on RVUs. The intention of the patient contact hour minimum is to maintain/drive profits for the group, as it is fairly easy for hard workers to meet the MGMA median RVU targets. In theory, a hard worker could probably meet those targets in 2.5-3 days per week and take the rest of the week off, which then leads to non-maximized use of space in the office, office staff, etc.
Although our target is 35 hours, for the last 6 years we have been asked to work harder the last 3-5 months of every year, adding about one full day each month to make up our “shortfall.” So your 38 hour target doesn’t surprise me, as that may be what is needed to maintain/increase profitability in your group. Of course, in my group, many of us grunts think that the yearly push to work harder is a rather poor business model, as we are exhausted from the extra flogging.
I am an attorney with a concentration in representing physicians in connection with their employment agreements as well as their partnership arrangements. Although a physician can certainly hire an attorney for a few hundred dollars to identify key issues in a contract, it is generally in the physician’s best interest to hire an attorney to review and negotiate the contract in order to level the playing field. Specifically, an attorney who has experience negotiating hundreds of physician employment contracts will know how to appropriately respond to the “other side” in a contract negotiation in order to obtain the most favorable results for the physician. With respect to compensation, from my experience, there is no one (1) cookie cutter way to structure compensation. While a collections based compensation model may be beneficial for one physician, a base salary with a productivity incentive or compensation based on RVUs may be more advantageous for another physician. However, it is generally advisable that there be a guaranteed salary for the first year or so of employment since it often takes time for a physician to reach maximum productivity. Therefore, compensation (and the many provisions in a contract) should be reviewed on a case by case basis by an attorney with experience in this area.
I disagree with this attorney. It is almost never a good idea to have an attorney negotiate for you. I have seen this go bad many times. The lawyers end up arguing over clauses that have no significant relevance to the actual job. Get an attorney as a consultant to help you better understand what you are signing and give you suggestions about how and what to negotiate but I would not let them try to represent you.
Another thing to be careful of when reviewing a practice is any associated ventures the practice is involved in. As a personal example, a previous practice that I joined had ownership of a medical billing office. They were doing their own medical billing and charging the medical group a 14% fee of collections. This wouldn’t make any difference if every partner in the group was an owner of the billing office, but that wasn’t the case. They restricted ownership of the billing office with a cut off just before I joined. I’m in a different group now, but my current group pays an outside firm 3.5% of collections to do our billing, so there was a lot of skimming off the top with my previous group to a select few.
Hey WCI,
I am doing some per diem urgent care shifts as a PGY3 moonlighter. I am a 1099 but he is covering my malpractice as well as my tail. He sent me a facesheet proving my coverage as well as an email stating he will be covering my tail (in addition in the email a person from the insurance company states they are covering my tail.) Is this sufficient protection that he will cover my tail? I’m not terribly concerned he won’t and I’ll only be doing it for a year anyway but I was just wondering.
I think that’s fine. It sounds enforceable in court to me.
Contract negotiations are very important and often neglected. Often doctors will look at the salary and not concern themselves with much more. Don’t be one of those doctors. You can get a free copy of my publication “Negotiating Your Contract Like a Pro” when you sign up for my blog at DrCorySFawcett.com. I also included this information in one of the chapters in my book “The Doctors Guide to Starting Your Practice Right” which is available on Amazon. Both of these resources will help doctors get their contract right.
Author says his wife began looking for a job three months before the beginning of her fellowship, but he didn’t say how long her fellowship was.
My wife is PGY3 of a 5-year peds neuro program. How soon should we start looking for a job?
I would recommend 6 months to a year and a half. We started looking a year and a half before we needed to start, and it served us well. You may get an offer where ever you apply but it’s important to get a good fit / contract. Plus it may give you certain freedoms in your program. Also credentialing can take 3-6 months.
I wonder if anyone here has been in this situation. I have a job offer from the place I always wanted to work at, very close to family perfect location. The only thing is after I interviewed with them, they said they do not allow any of their physicians to do any private practice on the side or any other type of work due to the way there Malpractice is. I have been doing locums for a while and making almost twice as much money as they are offering me but unfortunatelyI had been working much further away from family for that. Did anyone ever work for a hospital/organization that had similar restrictions but was able to successfully negotiate a better deal than this.
You could offer to buy your own malpractice to cover it if that is their only reason. We limit how many shifts our partners work because we want to promote longevity, minimize burnout, and ensure good, compassionate care.
What can one di if hospital employed and compensated on an RVU model, yet being unknowingly down coded by employer for inpatient patient visits thus getting less RVU. This has Ben going on behind the employees back and literally cost 100 k in down coding
Hi WCI! I’m in a situation I could use some advice on. I’m an GYN only surgeon and am joining a new practice build at the same time as one other physician who is a GYN oncologist surgeon. After an 18 month base period, I’ll be on wRVU production only with a compensation factor plus a fixed call pay. The amount for the fixed call pay was discussed BEFORE they found me this partner.
I’m grateful to have a more senior partner and it’ll be good for the practice to offer all GYN surgical services, but the current call pay arrangement is a lot less attractive when it’s potentially patients in house for a week or weekends with bowel obstructions, or recovering from big whacks. More concerning is that all this will likely fall in the global period for their index surgery and I won’t be able to bill anything.
So I need to find a way to be compensated for providing this care to more complicated patients.
My ideas are: 1) ask for higher assistant surgeon pay and a right of first refusal to assist. This would have to be a pretty high number to incentivize me to go do onc surgeries again… 2) increase call pay in defined circumstances 3) have a shared “pot” of money we put in to cover each other’s postop patient care.
Tricky situation. Where do you expect the additional money to come from? The employer? The other surgeon?
Like any negotiation, you can make a demand for more money, but you have to have an acceptable alternative you’re willing to leave for in order to negotiate from a position of strength.
Have a question about restrictive covenants on employment contracts. A few years ago my group was bought by a large conglomerate. The partners all became employees. Recently some of us are looking to branch off in town and form our own group. Clearly this is in breach of our non compete and restrictive covenants in our employee contract. We have had several lawyers look at our contracts and most say that the restrictive covenants are largely not enforced and that there are ways to get around them. We would like to start a group and practice in the same hospital as we currently do but not sure we can legally do this. Anyone have experience or advice on this?
I would take the advice of the attorneys over any of ours. But be aware just because the non-compete is ultimately not upheld doesn’t mean it won’t cost you a lot of money to get to that decision. There’s a lot of risk here in my view.
How much can you negotiate regarding a contract if you are being hired as an independent contractor? One job I am looking at pays a medical director stipend and I would retain all billings. I have to hire my own biller (or do it myself), pay for malpractice, CME, medical insurance, etc. etc. The hospital hires all the nurses, PT/OT/SLP/other staff (it’s an inpatient rehab job). Aside from the directorship requiring a certain number of hours per month for meetings, etc., I’d be my own boss and can set my rounding/hospital hours however I’d like, do work/consults at other hospitals if I’d like, etc.
Is it reasonable to ask for a guaranteed minimum for my first year of practice, or is that typically not something hospitals accommodate when hiring an IC? I don’t know any physicians that practice as an independent contractor, so it’s hard to get any good advice.
Everything is negotiable, but realize that it is best to negotiate from a position of strength-i.e. with another job offer in your pocket, then from a position of weakness-i.e. “may I please have more money?”
Thanks–I wasn’t sure if it was common to negotiate when being hired as an IC.
Fortunately, I believe I am in a very strong negotiating position for a number of reasons. But being entirely new to contract negotiation, I just wasn’t sure what was accepted/common. I know “it never hurts to ask,” but at the same time, I wouldn’t want to offend my potential future employer.
I have been negotiating physician employment agreements for 35 years or so. I’ve never had a potential employer offended because the physician cared enough about the position to want to make sure it is was fair to both parties.
Must have been too busy at the time I first read this to tell my story: a long time ago I worked for one year knowing we’d be moving after that year. I was pretty happy pay Wise with the salary. I paid for my first year claims made policy and had been told a certain dollar amount for the cost of the tail policy I would need when I left.
Unfortunately, a market correction occurred so the insurance company suddenly had a lot less money on the books then they had when they had told me the expected cost for the tail policy. So they wanted three times as much as they had quoted a year earlier. Had I somehow known this, I would have asked for 20 to 50% more in my salary.
I don’t know how to protect yourself from this, but be aware of that risk if you will likely have to pay a tail policy.
I have a long held that claims made policies are insane financially. Let us not consider health insurance at all, which we sort of need until we die, but look at car insurance: if I have a bad wreck and someone decides it was my fault and they triple the cost of my insurance going forward, I can choose not to drive anymore or my family may choose that I won’t drive anymore. The insurance company can’t Refuse to settle a claim based on me no longer being their customer when the claim is filed, should it be filed with some delay from the time the accident occurred, or settled after I have stop being their customer possibly because I am dead or no longer able to drive.
If the cost of mail practice goes up too much, that may make some of us choose not to work anymore. It is unfair that it can go up retroactively.
I always argue that the cost of tail coverage is a cost of doing business that the employer should absorb. I try to get a provision to that effect in every agreement I negotiate. If the employer won’t pay the entire cost of tail, I try to get an agreement that they will pay a portion of the cost of tail coverage for every year of service (i.e., 1/3 of the cost of the tail premium for every completed year of service).
Spouse got a job offer of 2yrs guarantee followed by 100% rvu salary. The offer is attractive and seemingly above average for the area, we think the employer knows this too. Commenters suggest negotiating from a position of strength, but what if it is known by the employer what other employers are offering (salary, job duties, etc.)? Other commenters talk about getting a fair contract, but how do we know what is fair? And if it is, should we bother negotiating at all?
Negotiating isn’t about asking for something more than you’re offered. It’s about coming to a win-win for both of you. A position of strength means you know what your other options are and take the best you can get. It’s possible that is the first thing this employer offers you, but it never hurts to ask “Is that the best you can do?” Sometimes they’ll toss a little more your way just for asking.
Appreciate that great perspective. Reading comments and perspectives, some folks make it sound like you’re weak for not getting more, always lowballed, employers are out to get you, etc. While others (who seem to do hiring) talk about offering fair contracts, withdrawing offers or resisting strong negotiation tactics. It certainly doesn’t seem like a one-size fits all and varies from person to person and institution to institution.
I think employers know that it is a big decision, and understand that you want to make the deal as perfect as you can for you. It costs a lot to recruit, so a few bucks or an additional benefit to keep somebody they have vetted and want is rarely a big deal.
The 100% productivity is scary. Lots of things can happen that cut down on the patients presenting to you. You can only produce wRVUs to the extent you have patients to treat.
I would try to get some sort of minimal guarantee for year 3, even if it’s only 80% of the first two years’ salary.
Thanks for the suggestion. I think the 2yr guarantee is firm. We’re not too worried about 100% rvu, they seem plenty busy and I think it’s in the hospitals best interest to keep her busy and have patients. Nevertheless, we’re less fearful of 100% rvu as my wife sees it being more “real world” in the sense that you get paid for the work you do. Of course if the hospital impedes this in some way, she can always leave. Moreover, we likely have peace of mind also since we’re in a decent financial position, no debts, low expenses and she wouldn’t have to work very hard to make an income that supports us comfortably.
As I read through these comments I got the feeling that each situation is substantially different. WCI’s group and approach are private practice with what is considered a fair offer and equal treatment. “Is this the best you can do?” A little prodding on relo/signing would give you a feel. I am sure a marked up contract with every item marked up wouldn’t be received well.
A large hospital or academic would be different situations as well.
Specially, for an academic first attending, how to does one probe to see if there is flexibility and where it’s impossible?
One example would be it’s silly to ask for an increase in the retirement plan match. It seems the process is:
1) Get the contract (or 2 or 3).
2) Review and get attorney’s review and points to discuss and negotiate.
3) Would you schedule a phone call to discuss contract questions rather than submitting changes?
That’s about the only way I see asking “Is this the best you can do?”
Are academic different that pp or employed with negotiation flexibility? Is the approach different?
I always recommend that you get an attorney review, and just hand the review over to the employer. That way, you aren’t asking for anything – the attorney is.
In my reviews, I always include Medical Group Management Association (“MGMA”) benchmarks. Instead of “is that the best you can do?”, you can point out anything less than median for starting physicians in your specialty in your area. I think that’s a much stronger position than just trying to get more of everything. MGMA covers sign-on bonuses, CME, vacation, guaranteed salary, etc. Again, I think that justifying a request by showing that the offer is less than benchmarks is much more powerful than just trying to squeeze more out of every category.