What should I watch out for in a physician employment contract?
The short answer
Physician employment contracts share the standard employment agreement provisions — compensation, non-compete, arbitration, IP — but also include clauses specific to clinical practice that carry significant financial and professional weight. The most commonly flagged provisions are: who pays for tail malpractice coverage (and how much it costs), the non-compete geographic scope relative to the local patient population, call and after-hours obligations, compensation formulas tied to relative value units (RVUs) or collections, and termination-without-cause notice periods. Restrictive covenants in physician agreements are treated differently in some states — a few have enacted specific physician non-compete restrictions. Scan your agreement to see what each of these provisions says before signing.
What Dang reviews here: Dang reviews the clause language in your physician employment agreement — what the compensation, non-compete, tail coverage, arbitration, and call-obligation terms say and what to ask about them. It does not verify licensure, credentialing, regulatory compliance, or wage, hour, or leave compliance.
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Clause categories that are specific or heightened in physician agreements
Tail malpractice coverage is one of the highest-cost clauses in a physician agreement: it covers claims that arise after the employment ends for events that occurred during it. Tail coverage can cost 1.5 to 3 times the annual premium of a claims-made policy — often $20,000–$60,000 or more depending on specialty. Who pays tail on departure, and under what conditions, is a clause worth reading before signing. Agreements may say the employer pays tail on termination without cause, the physician pays on resignation, or the cost is split in various ways.
Non-compete geographic scope matters particularly in physician agreements because of the local concentration of specialist practices — a two-mile radius restriction in a rural area can effectively prevent practice in the region entirely, while the same restriction in a dense urban market may be irrelevant. Call obligations — how many nights, weekends, how coverage is structured — are typically defined in the agreement or a separate schedule and directly affect work-life balance and compensation fairness.
Why people worry
Physicians often sign employment agreements early in their careers, sometimes under time pressure from training program timelines, without fully evaluating the non-compete or tail coverage terms. Discovering after departure that a six-mile non-compete effectively prevents practicing in the same county — or that a five-figure tail bill is due upon resignation — is a common source of regret. These clauses are negotiable at many health systems, particularly for experienced physicians or in-demand specialties.
What to look for in your agreement
- Tail coverage: who pays, under what conditions, and what an estimate of the cost is for your specialty.
- Non-compete geographic scope and duration — and whether it is drawn by radius, county, or facility catchment area.
- Compensation formula: whether it is salary-based, RVU-based, collections-based, or a hybrid — and what benchmarks apply.
- Call obligations: how many shifts, what type of call, and whether additional compensation applies.
- Termination-without-cause notice period — both the employer's notice to you and yours to the employer.
Questions to ask before signing
- Ask the employer to provide an estimated cost for tail coverage in your specialty and confirm who pays in each departure scenario.
- Ask the other party to clarify the geographic scope of the non-compete and how it would apply to your intended practice area.
- Confirm how call obligations are calculated and whether the compensation structure reflects the full call burden.
- Consider having the agreement reviewed by someone familiar with physician contract terms before signing — particularly on tail and non-compete provisions.
Why scan instead of guess
The general rule tells you the baseline. Your offer tells you what you’re actually being asked to sign — and the wording is what binds. Dang reads the document and flags the clauses worth reviewing, in plain English.
The deterministic engine scores and decides what’s risky. The AI only enriches the plain-English wording — AI extracts, code decides, never the other way around.
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Common questions
What is tail malpractice coverage and why does it matter?
Tail coverage covers malpractice claims that are filed after employment ends for incidents that occurred during employment. Without it, a physician on a claims-made policy who leaves an employer could face uninsured claims from the employment period. Who pays for tail is a negotiated contract term — often the most financially significant clause in a physician agreement.
Are physician non-competes treated differently from other non-competes?
Some states have enacted specific restrictions on physician non-competes, recognizing the public interest in patient access to care. How those restrictions apply varies by state. Whether your agreement's governing-law clause designates a state with physician-specific rules is worth checking.
No account required · File deleted after analysis · Not legal advice. Dang reports contract findings in plain English — general information, not legal advice about your situation. For consequential decisions, consult a licensed attorney in your state.