Physician Contract Review FAQ’s Part 2

Read FAQ’s Part 1 here!

What should I expect regarding partnership eligibility and benefit repayment?

Our team of attorneys and advisors assist hundreds of physicians each year with employment and partnership contract reviews.  Of course, in the process, they get many questions.  This is another installment of answers to questions frequently asked in physician contract reviews, specifically around partnership eligibility and benefit repayment.

QUESTION: In private practice, what is the average length of time before partnership eligibility?

Most (but not all) private practice opportunities allow for the potential for partnership. Generally speaking, the time frame for partnership is one to five years after commencement. The average time frame is two to three years after commencement.

The employment contract rarely – if ever – has any binding language related to partnership. Generally, the contract will provide that after a certain length of time, the parties will discuss (as opposed toguarantee) partnership.  While employers are impressed enough with you to offer you employment, they still have many questions about you, and about the future:  Will you be a good doctor” Will you be a “good fit” in the office’s culture? Will the practice’s finances be healthy in the future? Etc.

And yet, it’s still a good idea to discus partnership issues with the employer, in order to come to some verbal understanding.  Good questions to ask include: How long until I will be eligible for partnership? How much will it cost me (if anything) to buy into partnership?  Will my ownership as a partner be equal with other partners (versus having a disproportionately lower percentage of ownership)?

QUESTION: The employment contract says that I may have to repay my moving-expense assistance, signing bonus and/or stipend. Is this common?

It is quite common for employers to have the possibility that you will have to pay back these benefits. Simply put, they don’t want to put themselves at risk of you taking the money and running!  The contract can provide several types of repayment schemes, but the following are two common ones:

  1. A “pro-rated” or “tiered” scheme.  Consider a repayment period of 24 months.  In this scheme, if you leave after 13 months of employment, you would have to pay back the remaining 11 months’ worth, or 45.8% (11/24ths) of the particular benefit.
  2. An “all or nothing” scheme.  Consider a repayment period of 24 months.  In this scheme, if you leave at any time prior to the second anniversary of your commencement date, you have to repay ALL of the benefit.


If you are interviewing, you are already negotiating

If you are preparing to enter practice, it is important to realize that you are negotiating your contract before you have a contract in hand and the “official” negotiations begin. Be prepared and work with our team early in the process so we can help you with all the questions you should be asking right away to end up with the best terms in your final contract you can get.  Contact our contract review team to get started today.

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