Contract Red Flags: What Physicians Should Scrutinize Before Signing

Here’s something most physicians do not realize until it is too late. The compensation you negotiate is not always the compensation you keep. A number of employment contracts reserve the employer’s right to change the pay formula after you are hired, which means the relative value unit (RVU) conversion factor, the bonus structure, and the productivity targets you studied so carefully can be rewritten later without your signature on anything new. You agreed to a system, not a salary, and the system can change.

That is the kind of term that hides in plain sight. Physicians tend to read the compensation section line by line and skim everything after it, usually during a week when they are also arranging a move, wrapping up a residency, and trying to feel settled about a decision they have already half made. The provisions that surface years later, when you want to leave or renegotiate or take a job across town, are the ones that got the least attention going in.

Let’s look at the common contract red flags many physicians miss.

A compensation formula the employer can change

A strong starting salary can grab your attention. The better question is what your compensation looks like a year or two from now. If your pay is tied to RVUs, ask how they’re calculated. What’s the conversion factor? Is there a guaranteed minimum? How long does the salary guarantee last?

These details are important. We’ve seen physicians accept an offer with a generous first-year package, only to discover their income changes dramatically once the guarantee expires.

Bonus structures require the same attention. Find out how bonuses are calculated, when they’re paid, and whether the employer can change the compensation formula after you’ve been hired. Some contracts allow exactly that.

A non-compete that traps you geographically

Most physicians will have a noncompete, so the real question is not whether you have one but whether it would cost you. That comes down to geography. A 20-mile restriction in a major metro barely registers. The same 20 miles in a rural area with a handful of employers can mean moving your family or commuting across a state line to keep working in your specialty.

Noncompete law also varies by state and has been changing fast, with several states passing new limits on physician noncompetes in 2025 alone. A clause that reads as ironclad may not hold where you practice, which is exactly why a healthcare attorney licensed in your state should tell you what the language means rather than leaving you to guess. While you are in that section, read the nonsolicitation language too. Even when you are free to practice nearby, you may be barred from contacting former patients or recruiting former colleagues.

Termination terms that are lopsided or vaguely defined

Most contracts explain when an employer can terminate your employment. Spend just as much time reading the section that explains how you can leave. Look at the required notice period for both sides. If the employer can end the agreement with 90 days’ notice but you’re expected to stay for a year, that’s a point to discuss before you sign.

Pay attention to the definition of termination without cause. This provision allows either party to end the relationship without alleging misconduct, provided the required notice is given.

It’s also worth reading the definition of termination for cause. Sometimes it’s broader than physicians expect. Administrative issues or credentialing problems may carry bigger consequences than you realize.

Malpractice tail coverage with no named payer

Malpractice insurance is easy to skim over because it feels like someone else’s responsibility. Start by finding out whether the practice provides claims-made or occurrence coverage. If it’s a claims-made policy, ask who pays for tail coverage when you leave. Tail coverage protects you if a claim is filed after you’ve moved on, even though the care happened while you worked for that employer.

That protection can cost tens of thousands of dollars. Your contract should clearly say who is responsible for the expense. If it doesn’t, ask before you sign.

Duties and call described in language too loose to hold

The more vague the language, the more room there is for different interpretations later.

Take call coverage as an example. If the contract says call will be “reasonable” or “assigned as needed,” you still don’t know what you’re agreeing to. Ask for actual expectations:

• How often will you be on call?
• Will you cover multiple locations?
• What are your clinic hours?
• What administrative responsibilities are part of the role?

The same goes for promises made during the interview process. If you discussed a partnership track, relocation assistance, protected research time, or a signing bonus, make sure those terms appear in the written agreement. Once the contract is signed, verbal conversations carry very little weight.

Signing without an expert read

Even experienced physicians have employment agreements reviewed before signing.

Look for a healthcare attorney who works with physician contracts on a regular basis and understands the laws in your state. They can explain which provisions are standard, which warrant a closer look, and which are often negotiable.

A contract review typically costs far less than fixing a problem after you’ve accepted the job. A few careful conversations with your future employer before your first day can prevent much bigger problems later.

Whether you’re evaluating your first attending position or considering your next career move, working with an experienced physician recruiter can help you understand the offer beyond the salary. At Judge, we help physicians evaluate opportunities, ask the right questions, and navigate the hiring process with confidence.

To learn more about our healthcare job placement opportunities, click here.