Read It Before You Sign It: Contract Red Flags Every Physician Should Know

By Michael Woo-Ming, MD, MPH

How much time did you spend on your last contract? Be honest. If you're like most physicians I talk to, you gave it twenty minutes on a Sunday night, skipped to the compensation number, felt relieved, and signed it.

I get it. You've spent a decade learning to keep people alive and roughly zero hours learning to read a document written by somebody whose job is to protect the other side. Nobody handed you that class in residency. I don't have an MBA and never wanted one, so I learned this the way most of us do: by signing an employment agreement I didn't fully understand and then working under it for a few years.

So let's fix that. Here are the places I slow down and read twice, and why.

The clause that decides where you can work next

Look at the restrictive covenant first. Not the salary. This one.

You want to know three things in plain language: how long it lasts, how big the geographic circle is, and what exactly it stops you from doing. A two-year, fifteen-mile restriction on "the practice of medicine" is a very different life than a one-year, five-mile restriction on your specific specialty. One of those means you can change jobs. The other means you move your family.

And measure the circle from where? Some are drawn from the main office. Some are drawn from every location the group owns, including the two satellite clinics they're about to open. That detail sits in one sentence and it can quietly swallow an entire metro area.

The rules on these vary a lot by state, and they've been shifting. That's exactly why you want somebody who knows your state to look at yours rather than assuming what you heard from a colleague still applies.

Know exactly how it ends

Every contract ends. Yours will too — through a better offer, a move, a group that gets acquired, a burnout you don't see coming yet. Read the ending before you're living it.

Can they terminate you "without cause" on sixty days' notice? Can you do the same, or is your exit longer and more expensive than theirs? Asymmetry here is common and it's worth naming out loud.

Then read what "with cause" means to them. Sometimes it's tight and specific. Sometimes it's a paragraph so broad it covers nearly anything they decide they don't like. And find out what happens to your tail coverage on the way out — who buys it, and what it costs. That's a real number, sometimes a big one, and physicians discover it at the worst possible moment.

Read the money twice

The base number is the easy part. The structure is where it gets interesting.

If you're on production, get specific: production measured how, credited to whom, and paid when? Ask what happens to the collections that come in after you leave. Ask who eats the shortfall if the group misses its numbers. Ask whether the bonus formula is written into the contract or lives in a policy document they can rewrite whenever they want.

That last one matters more than it sounds. A compensation plan that "may be amended at the discretion of the practice" isn't really a compensation plan. It's a hope. You can still sign it — plenty of good jobs are structured that way — but sign it knowing what you're getting.

And whatever the recruiter said on the phone, if it isn't in the document, assume it doesn't exist. Not because anybody's lying. People move on, memories fade, the person who promised you a half-day of admin time takes a job in another state. The paper stays.

"Don't worry, we'd never enforce that"

I've heard it. You've heard it. It might even be true of the person saying it.

Here's the thing: the person saying it may not be there in three years. Groups get bought. Administrators rotate. A private practice becomes part of a system with a legal department that has never met you and reads the document exactly as written. Assume what's on the page is what you'll be held to, and that cheerful reassurance in a conference room isn't a term.

So if a clause genuinely doesn't matter to them, ask them to strike it. That request tells you a lot. The ones who shrug and cross it out were telling the truth. The ones who suddenly need three weeks and a call with counsel were telling you something else.

Get your own set of eyes on it

Pay a healthcare attorney in your state to read it. A few hundred dollars, sometimes a bit more. Set against a contract that governs the next five years of your income and where you're allowed to live, it isn't close.

Not the group's attorney. Not your cousin who does real estate. Someone who reads physician contracts all week and can tell you in ten minutes which terms are standard for your market and which one is unusual.

And then — this is the part people skip — negotiate. Most physicians accept the first draft as though it arrived carved in stone. It's a first draft. Somebody wrote it, and it was written to favor the person who wrote it. Asking for changes is the normal, expected next move, and in my experience an employer who'd pull an offer over a reasonable request has just told you something useful about the job. That's my experience, not a promise — weigh it against your own read of the situation.

Signing is the decision

I started my first business as a resident intern, and I've signed a lot of paper since — employment agreements, vendor contracts, the purchase agreement when I sold my software company. The pattern I've watched, in myself and in the physicians I coach, is that we treat the signature as the paperwork at the end of the decision. It isn't. It is the decision. Everything before it was a conversation.

You're the CEO of You, Incorporated whether you asked for the title or not. That means the boring documents are your job now. Take the extra week. Ask the questions that feel awkward to ask. And pay somebody a few hundred dollars to read the thing properly.

Your future self, sitting in a job that turned out differently than the conversation suggested, will be very glad you did.

Dr. Michael Woo-Ming is a Mayo Clinic-trained physician, practice owner, and founder of BootstrapMD. He's the author of The Positioned Physician: Earn More, Work Smart, Love Medicine Again. Learn more at michaelwooming.com.

This is general educational information, not legal, medical, or compliance advice.