We’ve all heard the horror stories: the “golden handcuff” contracts that leave physicians stuck in jobs they regret. A close friend and colleague was lured by a generous recruitment bonus, only to find out that it was structured as a loan. When he left the job early due to unbearable working conditions, he had to repay it in full. Another friend discovered too late that employer retirement contributions didn’t vest until five years in, right when she was planning to relocate. The worst? A noncompete clause that forced a young family to leave their community behind.

These aren’t rare — they are far too common. We enter the workforce unprepared for the wolves of corporate medicine.

I have personally witnessed the impact of contracts in my own journey. Early on, I learned to negotiate under my professional medical corporation, leaning on the expertise of contract lawyers but also educating myself. I studied Medical Group Management Association (MGMA) data for my specialty, city, and state to understand my true market value as a board-certified neurologist and clinical neurophysiologist. That knowledge empowered me to turn down multiple offers from hospitals and offices that attempted to undervalue my skills, expertise, and experience.

What I came to realize is that a contract is about far more than salary. It defines lifestyle, fairness, and — perhaps most importantly — the terms of your exit if you ever need to “divorce” from the professional relationship. Contracts shape your autonomy, schedule, and long-term options. Yet most trainees get little to no formal education in contract law or negotiation, leaving them to figure it out on their own. This is what administrators are counting on.

The Basics: RVUs, Bonuses, and Malpractice

Most physician salaries begin with a base pay, often guaranteed for 1–3 years. After that, compensation may depend on productivity, commonly measured in RVUs (Relative Value Units).

But the payout per RVU isn’t always transparent or realistic. Some contracts use tiered models (e.g., $45 per RVU up to $4000, then $65 after $4000, and $75 after $9000), which sound appealing — until you realize those upper tiers require unsustainable patient volume. When it averages out, the RVU compensation may be at or lower than 50th percentile for your specialty. In my own contracts, I do not take anything less than $65 per RVU on my specialty and prefer $75–$80 RVU which equal or above 75th percentile of pay.

If the compensation is collection based, it is essential to inquire about payor mix and what is the average collected for your specialty annually based on the average volume. A facility with a high percentage of patients with government insurance compared to commercial insurance (more than 70%) may mean that the target volume of patients per day is higher. In my own contracts, I prefer an equitable mix of private and government insurance payors to limit high volume schemes and pressures; those can increase liability, decrease quality of care, and increase risk of burnout.

When it comes to signing bonuses, be careful – they can turn into clawbacks. Retention bonuses may require multiple years of service. Performance bonuses often rely on soft metrics like patient satisfaction, over which you have little control.

For malpractice, most employers provide claims-made insurance, which only covers incidents reported during your employment. Once you leave, you need tail coverage — which can cost tens of thousands of dollars. Ideally, your employer pays for it. If not, consider occurrence-based insurance, which is pricier but provides lifelong coverage. While I have not personally been liable to tail coverage, anecdotally, I know physician friends that have paid an astronomical five figure fee. For my own services, I purchased occurrence-based malpractice through the Cooperative of American Physicians Inc. (CAP) which I highly recommend if available in your state.

Also, watch for indemnification clauses that could make you liable for administrative or billing errors, which are things beyond your control.

Next Level: Pay Structure

In 1099 models, pay is often tied to collections, hourly pay, per consult pay, or daily stipends. Regarding collections, an unpaid claim that is denied or delayed may leave the physician waiting. W-2 models are more predictable with a fixed income bimonthly or monthly, minus taxes.

Your contract should specify payment timelines and mandate that clean claims be paid even if insurers drag their feet. Insist on regular reporting of collections and billing status. Personally, I signed a contract without a defined payment schedule, and faced up to 90 days in delayed payment. My contract did not have an explicit clause of being paid regardless of collections from insurance.

Independent contractors or group model physicians often share practice expenses like EMRs, scribes, and admin fees. Beware of vague or percentage-based pass-through costs, especially those without a cap. You shouldn’t be subsidizing partners unless you are one.

Speaking of partners, employment models matter. With a W-2, you get benefits, and taxes are withheld — but you have less autonomy. For a 1099, there is more freedom and tax deductions, but you manage your own benefits and insurance. As a partner, you’d have a K-1, with shared profits and liabilities.

Understand what you’re signing up for. Some “partnership” roles offer no real ownership or transparency. Instead they strip your right for due process given you are not an employee, yet they still try to mandate internal policies outside of your contract without your vote and consent. Some may force you to buy in to benefits you do not need for the good of the “partnership.” This personally happened to me with a telemedicine company contract which treated me like an employee instead of a true partner. And many practices dangle partnership after 2–3 years — but without specifics. Before buying in, ask about terms and timeline, specifics about financials and profit sharing, and the buy in amount. Without answers and specifics, you may be trading autonomy for a title that means little.

The Fine Print

Every contract should include a termination clause. How much notice is required? Can you leave “at will”? What counts as “cause”? Favor shorter notice periods (30–90 days) and clarify whether you forfeit pay or bonuses if you leave. Understand tail coverage responsibilities and handover expectations.

And if you do leave (or are asked to leave), know your rights around noncompetes. In my state of California, noncompetes are illegal, yet they still show up in contracts. Elsewhere, they can block you from working nearby for years. If noncompetes are legal, try to negotiate a narrower radius (e.g., 5–10 miles) and shorter timeframe (no more than 12 months). If possible, replace it with a nonsolicitation clause.

Other Overlooked Clauses

• Intellectual Property: Do you own the content created?
• Moonlighting/Side Gigs Restrictions: Can you teach, consult, or take outside work?
• Arbitration: Are you waiving the right to sue?
• CME & Licensing: Is it reimbursed?
• Supervision Liability: Are you responsible for APPs or residents’ mistakes?

The most important thing to remember when it comes to your contract is if it’s not in writing, it doesn’t exist. Use a contract lawyer. Redline and negotiate. Talk to current physicians on the job before signing. You’ve invested years into your training — don’t let one contract derail your goals.

Dr. Rocha Cabrero (double board-certified neurologist/clinical neurophysiologist, leader, activist, mentor, writer, son, brother, husband, father, he/him) is the CEO/owner of IRD Neuroanalysis Inc. Dr. Rocha is involved in different projects related to clinical medicine, writing, advocacy/policy, mentoring, and leadership across fields. His primary training focuses are epilepsy and neurointraoperative monitoring (NIOM). He also enjoys spending time with his infant son, traveling, dancing, EDM concerts, beach walks, and catching up with friends and family. Dr. Rocha Cabrero is a 2025–2026 Doximity Op-Med Fellow.

Illustration by Diana Connolly