Negotiating an Agreement

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Negotiating an Agreement

​​​Once a position has been offered to you, it is time to negotiate an agreement. Following are points to consider when negotiating an agreement:


  1. Will you be a salaried physician or full partner?
  2. If you will not be a full partner, will the opportunity be offered to you at a future date? If so, at what cost?
  3. How will expenses, profits, and losses be divided or managed? Will there be openness related to the financial accounting of the practice, even if you are not a partner or owner?


  1. Will you have a voice in the administration and management of the practice? If so, to what extent, and with what limitations (e.g., staffing, purchases, additional of new physicians, policy changes, site changes)?


  1. Does the practice cover your malpractice insurance? What type of policy? What is the amount?
  2. Will tail insurance for malpractice be provided?  Who will pay for it?  Is this based on how long you've been at the practice?(See Medical Liability Insurance—Watch Your Tail​)
  3. Are health, life, and disability insurance provided?

Duties and assignments

  1. What will your duties be?
  2. What will your on-call, referral, coverage, and house call schedules be?
  3. What will your office schedule be?
  4. How are weekends, evenings, and holidays rotated?
  5. How many hours per week and per year will you be required to work?       
  6. Is there additional compensation for hours worked beyond the required amount?
  7. Will you be required to take emergency department or hospital calls? Are there pediatric hospitalists to help care for inpatients?
  8. Will you be attending deliveries?
  9. How will hospital rounds be rotated?

Office space

  1. Will you have your own office space?
  2. Will staff be shared within the offices or will specific staff be assigned to you?
  3. Will you be required to furnish your own office space? Business-related expenses
  1. What expenses will you be personally responsible for?
  2. What expenses will you be expected to pay and in what proportion?

Office supplies, marketing, and advertising

  1. Will the group pay for the expenses of adding you to the practice such as announcement cards, business cards, door plaques, stationary, advertising, and changing of indoor or outdoor signage?

Leaves, vacations, and paid time off

  1. What are the vacation and sick leave plans?
  2. Are personal days allowed? In what quantity? Are these paid?
  3. Is there pregnancy leave or paternity leave, and is this time paid?
  4. Will the number of days off or vacation days increase after the first year of the contract?

 Retirement/death planning

  1. Is there a retirement plan and how does it function?
  2. Is there a contingency plan in the event of your death or the death or incapacity of a member of this group?
  3. Is there a 401(k) plan, and how soon can you participate?

Continuing education

  1. How much time and funds for CME will be allotted?
  2. Will travel expenses be paid?
  3. Can time be taken off without penalty for CME or to be involved in speaking?
  4. Is involvement in AAP volunteerism and leadership activities encouraged and accommodated?

Practice philosophy

  1. What are the philosophies of the existing group about medical care, employee relations, expenses, and the like?
  2. Are you in agreement with these philosophies?

Salary and compensation calculations and payment

  1. How are salaries computed and when are they paid?
  2. Is there a percentage of the fees that you will be paid over and above a certain amount?​
  3. Are there bonuses given, and under what circumstances are they given?
  4. If compensation is based on productivity, what is the formula used, and are there minimum (base) guarantees and maximum (ceiling)?
  5. If you are required to submit reports to justify the payment due you, what information must you submit? Who must have access to this information?
  6. If a hospital is subsidizing your first year of practice or your practice setup, is repayment expected, and if so, on what schedule and at what percent interest?


  1. What is the termination or withdrawal policy?
  2. How much notice must be given once you decide to leave?
  3. Can you be fired or dismissed from the group, and under what circumstances?
  4. What rights do you have to dispute your termination or rectify the situation?

Restrictive covenants

  1. What is the non-competition policy of the group (restrictive covenant) should you decide to leave? Would there be a certain radius from the office within which you could not practice and for what period?
  2. What would the penalties be for a breach of contract? Look for these 4 parts: geographic area, time restriction, monetary penalty, and schedule of penalty payments.
  3. What is the policy on patient notification and release of medical records should patients want to follow you?

Moonlighting and other outside activities

  1. What is the policy addressing moonlighting and other outside activities?
  2. Are you permitted to keep funds received from outside sources?

Length of contract and renewal clauses

  1. What is the length of the contract?
  2. What are the renewal stipulations?

Privileges, affiliations, and certifications

  1. What privileges or affiliations will be required?
  2. Is board certification required within a certain period after beginning work?
  3. Are there any obligations, implied or specified, to admit to certain hospitals or use certain medical facilities?
  4. Will you need to have licensure in more than one state?

Practice location

  1. At what site will you be required to work (if there are satellite offices)?
  2. Does the group do contract work at a well-child clinic, hospital nursery coverage, or group home coverage?


  1. What is the policy should you become ill or disabled and unable to practice for a length of time?

Moving expenses

  1. How much, if any, of your moving or relocation expenses will be paid? For what specific expenses, and how will these expenses be paid (prepaid or by a specific date)?

Accounts receivable and patients

  1. Who retains ownership (property) or fees that are charged or collected by the practice - you, the practice, or your employer?
  2. Who will be doing the billing—an outside party, the practice, or perhaps the hospital?

Patient base

  1. How will patients be assigned to you (i.e., how will you get your fair share of patients)?
  2. Are patients considered your patients or patients of the practice?
  3. Where will referrals come from?

Note: It is very important for a lawyer to review any contract before signing.

See below for additional resources:

Key Issues to Consider Before Signing an Employment Contract - Gary N. McAbee, DO, JD, FAAP

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