Tips for Renegotiating Your Physician Contract
- May 29
- 8 min read
Physicians in our online communities for doctors often seek feedback and negotiation tips on their initial contracts, but don’t post nearly as often about renegotiating their physician contracts. Many physicians just assume nothing has changed when they renew their contracts, or are too comfortable in the job to think about leaving, so accept any changes that have been incorporated. However, as we’ve seen many times on our communities, there are more and more red flags popping up in the contracts of employed physicians, and it’s important to reexamine the contract both from a business and legal wording perspective, as well as a compensation perspective. As we often say, if you don’t ask, you don’t get. Below, we’ll cover some things to keep in mind when renegotiating your physician contract.
Also, as always, consult a physician contract attorney for advice specific to your situation.
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My contract is up for renewal. Do I even have any leverage when I am renegotiating the physician contract if I’m not planning on leaving?
First off, while you may not be planning on leaving, the employer doesn’t need to know that. Second, there are still many ways in which you can have leverage. Even if you need the employer, chances are, in this landscape of physician shortages, they need you just as much, if not more.
Especially if you’ve proven yourself to be a valuable asset to the system, your employer would likely much rather stay with a known entity than find somebody new.
Things that make a doctor a valuable employee to retain include:
Good patient satisfaction scores
High productivity, especially if you are exceeding RVU targets
Strong collections
High quality metrics
Good team player (example: takes extra shifts, helps with call coverage, does tumor board or resident education, admin or leadership responsibilities)
An overflowing panel from patients wanting to see you specifically
Specialty shortages in the broader healthcare ecosystem which make it difficult to recruit in your specialty
Additionally, bringing on new physicians and waiting for them to get up to speed is expensive for a system. It can lose them many hundreds of thousands of dollars (or more!) to run a search, pay recruiters, and onboard a new physician and get them to the point where they are as productive as a seasoned and known physician in the community and hospital ecosystem.
Questions to ask when renegotiating your physician contract
Before you start the process of renegotiating your contract or thinking about what you want to include, it’s important to ask these questions:
Is there a method by which compensation can increase over time, and how is the compensation expected to evolve over time?
What metrics will be used to determine raises, bonuses, or other incentives?
What has changed since the original contract?
What are comparable physicians receiving internally, and what are new hires receiving?
What have I been unhappy about over the years of the current contract?
How have my responsibilities changed from what I thought I’d be doing when I signed the original contract (more hours, more call, more supervisory responsibilities, covering new locations, etc.)?
What things can I consider renegotiating in a physician contract?
Base salary
This is where most of us start, because everybody would benefit from a larger amount of money in their paycheck. You should absolutely try to increase your base salary or change your bonus structure to be more favorable.
Other aspects of the compensation package
Remember, just like in your initial contract negotiations, everything is negotiable, and your compensation package is about a lot more than money. We cover the different things you can negotiate more thoroughly in our physician salary and negotiation compensation databases, but as a reminder, think about:
Amount paid per wRVU
Productivity thresholds and bonus thresholds
Call compensation
Bonus structure
Quality bonuses
Retention bonuses
CME or academic funds
Student loan repayments
Malpractice coverage (tail)
PTO
Benefits
Other things of value to you
There are other things that may have come up over the years that are important to you, that you can now negotiate into your contract.
Office space
Flexibility in your schedule or particular requests for your schedule
Protected time for admin work
Patient mix or case mix
How can you best prepare for a renegotiation of your physician contract?
Start your renegotiation process early
Time flies, and back and forth negotiations take time. You don’t want to be in a position where time is being used against you to pressure you into taking a less than optimal contract. Additionally, if something falls through and you decide to walk away, you’ll want time to secure another job (or you may want to have another offer to increase your leverage). As such, we recommend starting renegotiations at least 3 months before the contract is set to expire.
Look at recent physician compensation data to know what the market is currently offering, or talk to colleagues
It’s always better to come to the negotiation table with data, rather than just asking for more money because you feel you deserve it. Take some time to learn what the current market trends are.
There are now many tools out there for physician salary transparency, including our own data from our physician communities on our physician salary and negotiation compensation databases. The great thing about our databases is that they include not just salary, but also things like PTO, bonus structures, CME funds, vacation days, and much more etc.
Additional resources include MGMA, AMGA, and SullivanCotter, which are benchmarked and what the employer will likely be using. Remember that you are allowed to ask for above average!
Related PSG resource: If you did want to purchase MGMA data without purchasing the entire database, you can get a paired down version of full MGMA data through Resolve (PSG partnership link, code PHYSICIANS10 for 10% off). Note that this is non-refundable, so please read the details of what is included before purchasing.
Additionally, we highly recommend using a physician contract attorney to renegotiate your contract, and many times they have access to compensation data.
Reevaluate your RVU thresholds and conditions, if applicable, and determine if they are fair
Now that you have some data from your own timing working there, you probably have a better sense of whether the structure related to your RVUs is fair. If not, or if they are proposing a new structure, this is the time to make sure it’s advantageous to you. You should look at:
Whether your RVU thresholds are realistic or need to be lowered or otherwise adjusted
Seeing if you should increase the amount paid per wRVU ($/wRVU conversion rates)
Redoing bonus thresholds or structures, particularly if your productivity has consistently resulted in large profits for the employer
Removing any unfair clauses that hurt you in the prior contract period - for example, unfair conditions about RVU prorating during parental leave or similar
Vague bonus metrics
Clauses that allow them to unilaterally change compensation terms
Requirements to repay portions of your salary if certain productivity thresholds weren’t met
Reevaluate other unfair conditions in your contract
Things that people often make mistakes with in their initial contract include:
Side gigs restrictions - take these out if you can
Noncompete clauses - read this to see if your noncompete is enforceable
Termination clauses - Pay particular attention to without cause termination notice periods, conditions in which they can terminate “for cause,” repayment obligations, liquidated damages clauses, and indemnification clauses
Not defining maximum work hours or call requirements (e.g. as much as everyone else)
Review our other common red flags in physician contracts to see if any of these apply to your contract
Be prepared to walk away
Although this may not be the goal, remember, the strongest tool you have at the negotiating table is the ability to walk away. If you can, have competing offers or at least a backup plan you’d be comfortable with. This allows you to negotiate from a point of power.
Employers are well aware of the challenges of physician recruitment in today’s healthcare environment. They will want to keep you if you’ve had a good relationship. You’ll want to continue to foster relationship building but, if you have to, you should also make it clear that you have options.
Establish your asks
Going into the negotiations, decide which of the above things are the highest priorities, so that you know how to approach the negotiation. Ideally you should have 2-3 things you are strongly negotiating on, and some other things that are nice to haves but allow you to leave on the table in order to support getting the other things.
Other data to keep in handy
Before renegotiating, in addition to the compensation data above, gather:
Productivity reports
Benchmarks relative to your peers
Revenue contribution metrics relative to your group
Patient satisfaction scores and testimonials
Market data related to recruitment for your specialty
Competing offers (if you have them, or have been offered positions)
Should I hire an attorney when renegotiating my physician contract?
As you can see above, there are lots of things to consider renegotiating, especially when you have more data and experience with the job itself. You may have more leverage than you think, but you want to be careful about maintaining the relationships you’ve worked so hard to build over the previous years during your initial contract. As such, it may be more comfortable to have a third party negotiating for you, with the added bonus that they can review wording, point out red flags, give you insights into what’s market rate or standard conditions, etc. As such, we are big fans of using a contract attorney.
Related PSG Resources:
Conclusion
When it comes time to renew your contract, it’s important to use the opportunity to renegotiate the terms of your physician contract. You’ve likely learned a lot about what you like and don’t like about your job and your employment situation over the course of the prior contract, and you should make sure you address those things in this contract. Additionally, you should use this opportunity to update your compensation package to reflect current market conditions.
Additional contract negotiation resources for physicians
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