How to Evaluate a Physician Employment Contract 2026: 20-Point Checklist

Most physicians sign employment contracts with minimal review — often relying on the hiring organization's HR rep to explain terms. This is a costly mistake. Physicians who thoroughly review their contracts before signing typically negotiate 8-15% more total compensation and avoid meaningful downstream liability.

Here's a comprehensive 20-point checklist for evaluating a physician employment contract in 2026.

1. Base Salary

Compare to MGMA 50th percentile for your specialty in your region. Push for 60th percentile as your floor. Ask: "Is this number guaranteed for the first 12-24 months, or is it tied to productivity from day 1?"

2. RVU Bonus Structure

• What's the wRVU threshold? (Compare to MGMA 50th/75th percentile)
• What's the per-RVU conversion rate above threshold?
• Is there a cap on the bonus?
• How is wRVU calculated (CMS formula, internal, etc.)?
• What happens during first-year ramp-up (is threshold pro-rated)?

3. Sign-On Bonus Recapture

Sign-on bonuses typically have 2-3 year pro-rata forgiveness schedules. Red flags:

• Full repayment required if you leave in years 1-2 (industry standard is pro-rata)
• Repayment triggered by hospital-initiated termination (should only trigger on voluntary departure)
• No clear forgiveness schedule spelled out

4. Quality Bonus / Value-Based Comp

More contracts now include 3-15% quality bonuses. Check:

• What specific metrics determine the bonus?
• Are the metrics within your control?
• Are thresholds realistic?
• Is the bonus guaranteed at a minimum level the first year?

5. Malpractice Coverage

Malpractice coverage type dramatically affects your financial exposure when you eventually leave:

• Occurrence-based policy: Best. Covers claims made after you leave for events during employment. No tail needed.
• Claims-made policy without paid tail: Worst. You'll pay $10K-$40K+ for tail coverage when you resign.
• Claims-made with paid tail: Acceptable. Confirm in writing that tail is paid regardless of reason for departure.

This single clause can swing the economic value of a contract by $20K-$50K over 3-5 years.

6. Non-Compete Clause

Non-compete enforceability varies dramatically by state. Evaluate:

• Geographic scope: Typical is 5-25 miles. Push for smaller radius.
• Time period: Typical is 12-24 months. Push for shorter.
• Specialty scope: Does it cover all medicine or just your specialty?
• State enforceability: CA doesn't enforce. Texas does. Check your state specifically.
• Carve-outs: Can you practice academic medicine, moonlight, volunteer, work in different setting?

7. Termination Provisions

How can the contract end, on what notice, and under what circumstances?

• Without-cause termination notice (typically 60-180 days)
• For-cause termination definition (narrow is better for you)
• Your notice requirement if you leave
• Payment of earned RVU bonus on departure

8. Call Coverage

• Frequency (1:3 vs 1:8 is huge)
• In-house vs home call
• Additional pay for call (per-shift, per-activation, flat stipend)
• Holiday rotation
• Jeopardy call expectations

9. Clinic/OR Block Time

For surgical and procedural specialties, block time = income. Confirm:

• Minimum block time guaranteed per week
• How block is allocated (seniority, productivity, random)
• Ability to add block if you're over-producing

10. Patient Panel / Volume Expectations

• Expected patient volume per day/week
• New-patient allocation (first 6 months)
• Referral source accessibility
• Template/schedule flexibility

11. Compensation Review Schedule

Most contracts specify annual comp review. Confirm:

• Review date and process
• Who reviews (RVP, CMO, department chair)
• Minimum increase floor, if any
• Escalation if disagreement

12. CME Allowance

• Annual dollar amount ($3K-$10K standard)
• Days off for CME (5-7 days typical)
• What qualifies (board prep, conferences, online courses, etc.)
• Rollover if unused

13. Benefits Package

• Health/dental/vision (most standard)
• Life + disability insurance (check % of salary and exclusion clauses)
• 401k/403b match (5-10% standard)
• Dependent coverage cost
• Parental leave (12 weeks+ increasingly standard)

14. Loan Repayment

If loan repayment is part of the offer:

• Amount + length of commitment
• Pro-rata forgiveness if you leave early
• Federal (NHSC) vs state vs employer-paid
• Tax treatment (some forgiven loans count as taxable income)

15. Academic Time / Research Support

If academic track:

• Protected time percentage (10-30% typical)
• Startup package amount
• Lab space commitment
• Publication/teaching expectations for promotion

16. Moonlighting / Outside Practice

• Permission to moonlight (yes/no)
• Requirement to disclose outside income
• Conflict-of-interest restrictions
• Telemedicine side work permissibility

17. Assignment + Change of Control

What happens if your employer is acquired?

• Does the contract automatically transfer to the new owner?
• Can you terminate without penalty upon change of control?
• Are any comp/benefits guaranteed to remain?

18. IP + Invention Clauses

If you do research or develop intellectual property:

• Who owns inventions made during employment?
• Are personal projects carved out?
• What's the revenue share if commercialized?

19. Dispute Resolution

• Mandatory arbitration vs court litigation
• Governing state law
• Attorney's fees provision (winner pays, each pays own)

20. Red Flags Watch List

Immediate concerns that warrant attorney review:

• "At-will" employment with no for-cause protection
• Non-compete that covers all medicine (not just specialty)
• Claims-made malpractice without paid tail
• Unclear RVU calculation method
• No productivity guarantee in Year 1
• Right to reduce base salary unilaterally
• Obligation to refund sign-on on hospital-initiated termination
• Non-solicit that blocks you from taking patients or referring physicians

Get an Attorney

For any contract worth $350K+ annually, hire a physician contract attorney. Cost is typically $1,500-$4,500 for a thorough review. Compared to the value of a single negotiation point (e.g., adding paid tail = $25K+ savings), this is a trivial investment.

Ava Health recommends the following types of attorneys:

• Physician contract specialists (national firms like Wachler Associates, Adelman Matz)
• State-specific healthcare attorneys (search "physician employment attorney + your state")
• Your state medical society often has referrals

Ava Health's Role

When Ava Health places a physician with a client, we actively advocate for fair contract terms on your behalf. We know market norms by specialty and region and will push back on uncompetitive terms before they reach your desk.

Contact us if you'd like help evaluating an offer or finding a new one.