Need Some Basic Contract 101

[Harrison486]

Hey guys,

I am a current fellow, just starting the whole post-fellowship process. I've been interviewing a little bit and, more than anything, have realized that I am absolutely clueless when it comes to the business side of medicine and don't have any understanding of what matters as far as contracts being offered. I've tried to do a bit of searching on the forum, but only ended up with some old threads asking for very specific advice on contracts that people were being offered. I'm looking for more general knowledge.

Would anyone be willing to give a quick "Contract 101" just explaining the basics of what goes into a contract and what matters? Is base salary more important or is bonus the sticking point? What should we be looking for as far as bonus structure? Should our employers be paying for malpractice and health insurance? What's the typical buy-in period and are there things to worry about in that regard? What other things are key points to ask about or look for in a contract?

Also, how much does this all differ depending on a hospital-based practice vs true private practice?

Thanks.

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[lonelobo]

Check previous threads through a search there is a lot of great advice posted on this topic

 

[drusso]

Here's the most important question to consider when reviewing a contract: "How do I quit you?" Ideally, you want an easy out (short notice), no penalties, no non-competes, no gag orders, etc.

The other general principle is mutuality. The hospital might say, "If we can't agree about something, you (doctor) agree not to sue us (hospital)." Okay, then you want the same principle reciprocated, "If we can't agree about something, you (hospital) agree not to sue me (doctor).

You want all methods of computation of compensation explicitly determined in the contract. You also want some language that says that there is a disagreement about methods of compensation, etc then the opinion of a neutral third party accountant and generally accepted accounting practices (GAAP) will prevail.

Finally, you want a lawyer to review all contracts with an eye toward your protections prioritized in the matter. Remember, everything is negotiable. No one gets a perfect deal.

 

[pastafan]

Huge topic. Read threads here. Find an experienced, expert lawyer that specializes in medical contracts. A few grand extra spent for the best representing you will be worth a fortune if things go sour.

 

[deleted185747]

Post the contract. Guys on here love to find faults and flaws.

 

[Harrison486]

Post the contract. Guys on here love to find faults and flaws.

Not even there yet.

Just trying to get an idea of what I should be rating higher once I start hopefully getting some offers. Like should I be more concerned in regards to base salary or the bonus structure?


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[BobBarker]

Base salary and bonus go hand in hand. If your production based on the bonus structure is less than your base you will be fired most likely.

 

[soccerpunk600]

Is it normal to pay out tail upon leaving?

I got a recent contract in mulling over. But one thing was I had to pay tail, and they will pay 10% per year I've been there. Is that normal language? Obviously our tail won't be anything like some specialties (obgyn, surgery).. but anyone have a range as to normal tail for interventional pain?

 

[hyperalgesia]

Is it normal to pay out tail upon leaving?

I got a recent contract in mulling over. But one thing was I had to pay tail, and they will pay 10% per year I've been there. Is that normal language? Obviously our tail won't be anything like some specialties (obgyn, surgery).. but anyone have a range as to normal tail for interventional pain?

The contracts I've looked at about half provide tail. I'm not sure if it's exactly the same as "occurrence based", where any incidents are covered in perpetuity, but I believe that's rare too. A hospital system I interviewed at once said what they were offering (occurrence) was almost unheard of these days. Didn't verify.

 

[BobBarker]

I wouldn't let tail make or break a contract. I think nose coverage (new insurer will pay claims that occurred in the past) is cheaper.

 

[pastafan]

Tail is generally 1.5X yearly rate