Hiring physicians, nurse practitioners, physician assistants, therapists, dentists, or other healthcare providers is an exciting step for a growing practice. However, bringing on a practitioner without a well-written employment agreement can create confusion, legal disputes, and unnecessary financial risk down the road.
An employment contract is much more than a hiring document—it's a roadmap that clearly outlines expectations, responsibilities, and protections for both the practice and the healthcare practitioner.
Here are some of the most important items every healthcare practice should consider including in an employment contract.
1. Clearly Define the Job Duties and Scope of Practice
The agreement should clearly outline:
The practitioner's title and role
Expected duties and responsibilities
Clinical and administrative expectations
Patient care responsibilities
Supervisory responsibilities (if applicable)
Which locations they will work from
Any telehealth services they are expected to provide
Being specific helps avoid misunderstandings later and ensures everyone is aligned from the beginning.
2. Compensation Structure
Compensation should be transparent and easy to understand.
Outline details such as:
Base salary
Hourly pay (if applicable)
Productivity bonuses
Revenue-sharing arrangements
Incentive compensation
Overtime eligibility
Signing bonuses
Payment schedule
If bonuses are tied to productivity metrics such as RVUs, patient volume, collections, or quality measures, clearly explain how they are calculated.
3. Work Schedule and Time Off
Set clear expectations regarding work hours and availability.
Include:
Number of days worked per week
Clinic hours
On-call responsibilities
Weekend or holiday coverage requirements
Paid time off (PTO)
Sick leave
Continuing Medical Education (CME) time
Vacation policies
Defining these expectations upfront can help reduce burnout and improve job satisfaction.
4. Licensure, Certifications, and Credentialing Requirements
Healthcare practitioners are responsible for maintaining their professional credentials, but the contract should clearly state who is responsible for associated costs.
Address items such as:
State licenses
DEA registration (if applicable)
Board certifications
Hospital privileges
Professional memberships
Credentialing and payer enrollment requirements
Specify whether the practice will reimburse these expenses.
5. Medical Malpractice Insurance
This is one of the most important sections of any healthcare employment agreement.
The contract should clearly answer:
Who pays for malpractice insurance?
What type of policy is provided (claims-made or occurrence)?
Who is responsible for purchasing tail coverage if employment ends?
What policy limits will be maintained?
Are there any requirements for practitioners to notify the practice of incidents that may lead to a claim?
Many disputes arise when practitioners leave a practice and discover they are responsible for expensive tail coverage costs.
Having this addressed upfront can prevent unpleasant surprises.
6. Employee Benefits
Outline all benefits offered by the practice, including:
Health insurance
Dental and vision insurance
Retirement plans
401(k) matching
Disability insurance
Life insurance
CME reimbursement
Professional dues reimbursement
Wellness benefits
Clearly state eligibility requirements and waiting periods.
7. Restrictive Covenants
Depending on state laws, practices may include provisions designed to protect the business after a practitioner leaves.
These may include:
Non-Compete Clauses
These restrict a practitioner from practicing within a certain geographic area for a defined period of time. Keep in mind that enforceability varies significantly by state.
Non-Solicitation Clauses
These prevent former employees from soliciting:
Patients
Employees
Referral sources
Confidentiality Agreements
These protect sensitive business information such as:
Patient information
Pricing models
Financial data
Marketing strategies
Trade secrets
Always consult legal counsel to ensure these provisions comply with state laws.
8. Compliance Expectations
Healthcare is highly regulated, so employment agreements should reinforce compliance obligations.
Include expectations regarding adherence to:
HIPAA regulations
Medicare and Medicaid requirements
Billing and coding standards
Fraud and abuse laws
Corporate compliance programs
Internal policies and procedures
Practitioners should understand their responsibility to comply with all applicable regulations.
9. Ownership of Medical Records and Intellectual Property
The contract should clarify ownership of:
Patient medical records
Practice-generated data
Educational materials
Research projects
Marketing content
Intellectual property created during employment
This can prevent disputes if a practitioner leaves the organization.
10. Performance Expectations and Quality Standards
Clearly define performance expectations, including:
Quality metrics
Patient satisfaction goals
Documentation standards
Productivity expectations
Attendance requirements
Professional conduct standards
Objective expectations create accountability and support long-term success.
11. Termination Provisions
Every employment agreement should clearly explain how either party may end the relationship.
Address:
Contract term length
Termination with cause
Termination without cause
Required notice periods (commonly 30, 60, or 90 days)
Immediate termination events
Obligations after termination
The more detailed this section is, the smoother transitions will be if employment ends.
12. Dispute Resolution Procedures
Even strong working relationships can encounter disagreements.
Specify how disputes will be handled, such as:
Internal resolution procedures
Mediation
Arbitration
Venue and governing law
Having a process in place can save significant time and legal expenses.
An employment contract is one of the most important risk management tools a healthcare practice can have. A well-written agreement protects both the practice and the practitioner by setting clear expectations from day one.
Taking the time to address compensation, malpractice coverage, compliance responsibilities, termination procedures, and post-employment obligations can help avoid costly disputes and create a stronger, more successful working relationship.
As healthcare regulations continue to evolve, practices should regularly review and update their employment agreements to ensure they remain compliant and aligned with current laws and business operations.
A strong employment contract doesn't just protect your practice—it builds the foundation for a successful long-term partnership with your healthcare providers.
