The complete guide to reading your first attending contract

Your first attending contract is probably the most consequential financial document you have ever signed. A typical first contract governs $250,000 to $500,000 a year in compensation, plus benefits, retirement contributions, and malpractice coverage worth another $50,000 to $100,000 annually — and the clauses people skim past, like tail coverage and the non-compete, can cost six figures on their own if they go wrong. Yet residency teaches you exactly nothing about reading one.

This guide walks through a typical physician employment contract section by section: what each clause means, what a reasonable version looks like, and where the dollars actually live. One ground rule before we start: this is education, not legal advice. Every physician should have a contract reviewed by an attorney who works with physician contracts in the relevant state — typically $500 to $2,000, which is the cheapest insurance you will buy this year relative to what it protects. Use this guide to understand what your attorney is talking about and to ask better questions.

A second ground rule: everything in a contract is there because it benefits someone. Usually the drafter. Hospitals and large groups hand out standardized contracts written by their lawyers, and the first version you receive is the employer-favorable version. That is not malice; it is how contracts work. Your job is to know which terms are standard, which are negotiable, and which are red flags.

The parties, the term, and the renewal mechanics

The first page tells you who you are actually working for. This matters more than it looks. If you plan to pursue Public Service Loan Forgiveness, your direct employer — the entity whose EIN appears on your W-2 — must be a qualifying nonprofit or government employer. Many "hospital jobs" are actually employment by a for-profit physician staffing group that contracts with a nonprofit hospital. Same badge, same hallway, no PSLF credit. If you have $200,000 to $400,000 in federal loans riding on forgiveness, confirm the employing entity's tax status before anything else in the document.

Next is the term: usually one to three years, with automatic renewal. Read the renewal clause alongside the termination clause (covered below), because together they determine your real commitment. A two-year initial term with 90-day without-cause termination is effectively a 90-day commitment — for both sides. A three-year term with no without-cause exit is a three-year commitment for you, but check whether the employer kept a without-cause exit for itself. Asymmetry here is a red flag.

Also check the start date against your training end date and licensing timeline. Hospital credentialing routinely takes 90 to 120 days. If your contract starts July 1 but your license, DEA registration, and hospital privileges are not complete, some contracts let the employer delay your start — and your first paycheck — without compensating you. Ask how a credentialing delay is handled.

One more document deserves respect before the contract itself: the letter of intent. Employers increasingly send an LOI or term sheet first, and while most are labeled non-binding, signing one creates real anchoring — terms you accepted "in principle" are hard to reopen later, and some LOIs contain binding provisions (exclusivity, confidentiality) mixed in with the non-binding ones. Read an LOI with the same care as the contract, and have your attorney see it before you sign it, not after.

Compensation structure: the number is never just the number

Most first attending contracts use one of three structures:

• Straight salary. A fixed amount, common in academic positions and some hospital employment. Simple, predictable, and usually lower than productivity models at high production levels.
• Base plus productivity. A guaranteed base, plus a bonus once your production (almost always measured in wRVUs) passes a threshold. This is the most common structure for employed physicians — an estimated 60 to 70 percent of employed attendings have some form of RVU-based compensation.
• Income guarantee converting to production. Common in your first one to two years: the employer guarantees a salary while you build a panel, then compensation converts to a pure or mostly-pure productivity formula. The conversion is where new attendings get hurt.

For any structure, your questions are the same. What is the guaranteed amount, and for how long is it guaranteed? What happens in year two or three when the guarantee expires? Ask the employer to show you the math: "If I produce 4,500 wRVUs in year three, what is my total compensation under this formula?" If they cannot answer that in writing, the formula is not finished, and you should not sign an unfinished formula.

Signing bonuses and relocation allowances usually carry repayment obligations: leave within two or three years and you owe some or all of it back, often prorated. Get the proration schedule in writing and confirm whether repayment is triggered if the employer terminates you without cause. It should not be — but in employer-drafted contracts, it sometimes is.

RVU terms: the five numbers that determine your productivity pay

If your contract has a productivity component, the prose around it matters less than five specific numbers and definitions:

1. The conversion factor — dollars paid per wRVU above threshold. For Family Medicine, MGMA 2026 data puts the median at $55/wRVU, with the 25th percentile at $47 and the 75th at $61. An offer at $44/wRVU is not "close to market." On 4,756 wRVUs (the FM median), the gap between $44 and $55 is $52,316 a year.
2. The threshold — how many wRVUs you must produce before the bonus formula turns on, and whether dollars below threshold are credited at the same rate.
3. wRVU definition — work RVUs only, from the physician work component of the Medicare fee schedule, regardless of what the practice collects. If the contract pays on collections or "net revenue" instead of wRVUs, your pay now depends on the billing department's competence and the payer mix — two things you do not control.
4. The measurement year and true-up — when production is counted, when bonuses are paid, and what happens to a partial year if you leave mid-cycle. Many contracts forfeit accrued but unpaid productivity bonuses on departure. Negotiate a pro-rated payout.
5. The CMS year — which year's RVU values apply. CMS revalues codes periodically; a contract pegged to a frozen older schedule can quietly diverge from what your work is currently worth.

Track your own wRVUs from month one. Do not rely on the employer's annual statement. Discrepancies between physician-tracked and employer-reported wRVUs are common enough that verifying is simply part of the job now.

A note on the guarantee-to-production conversion: ask what happens if your panel builds slower than projected. Reasonable contracts phase in or reset the threshold during ramp-up; aggressive ones apply the full threshold the day the guarantee expires, which can produce a year-three pay cliff through no fault of your clinical work. If the employer projects you will produce 5,000 wRVUs by year three, ask to see the assumptions behind that projection — visit volumes, panel growth, scheduling support — in writing.

Benefits: the $40,000 to $80,000 you forgot to count

Benefits routinely add 15 to 25 percent on top of cash compensation, and they vary enormously between employers. Compare offers on total compensation, not salary. Run through:

• Retirement. Does the employer offer a 401(k) or 403(b) match, and at what percentage? Is there a 457(b) on top (common at nonprofit hospitals — a second $24,500 of deferral space in 2026 alongside your 403(b))? What is the vesting schedule on employer contributions? A 5% match on $300,000 is $15,000 a year — but only if you stay long enough to vest.
• Health, dental, vision, and the premium split. Standard, but the employee share of family-coverage premiums can differ by $5,000+ a year between employers.
• CME allowance and time. Typical: $3,000–$5,000 and 5 days annually. Confirm licensing fees, DEA registration, and board fees are covered — that is $2,000–$4,000 of recurring cost someone has to pay.
• PTO. How many days, does it include sick time, and does unused time pay out at departure?
• Disability and life insurance. Group disability through an employer is rarely own-occupation and rarely portable. Treat employer coverage as a supplement to, not a substitute for, an individual own-occupation disability policy you own personally — the only type appropriate for a physician's earning profile.

While you are in this section, pin down what "full-time" means. The contract should define your clinical FTE in concrete units — patient-contact hours per week, half-day sessions, or shifts per month — not "as assigned by the employer." A 1.0 FTE defined as 36 patient-contact hours is a different job from one defined as 40, and the difference compounds through the productivity formula: more sessions means more wRVUs, and also more evenings of documentation. Administrative time, if promised, belongs in the contract with a number attached.

None of these individually justifies choosing one job over another. Added together, they can swing total compensation by $30,000 to $50,000 a year between two offers with identical salaries.

Malpractice insurance and tail coverage: the clause that bites on the way out

Every contract specifies who provides malpractice coverage, what type, and at what limits (commonly $1 million per occurrence / $3 million aggregate, though this varies by state and specialty).

The type is the trap. Occurrence policies cover any event that happened while the policy was active, forever, no matter when the claim is filed. Claims-made policies — the majority of employer-provided coverage — only cover claims filed while the policy is active. Leave the job, the policy ends, and a claim filed two years later for something that happened on your watch is not covered unless someone buys tail coverage (an extended reporting endorsement).

Tail typically costs 1.5 to 2 times the annual premium — roughly $50,000 to $200,000 depending on specialty — and the contract decides who pays it. The employer-favorable default is: the departing physician pays. That means leaving a job you dislike could carry a six-figure exit fee you agreed to in week zero. Negotiate employer-paid tail, or at minimum employer-paid tail if the employer terminates you without cause or doesn't renew. This deserves its own deep dive, but the one-sentence version: never sign a claims-made arrangement without knowing, in writing, who pays the tail in every departure scenario.

Restrictive covenants: the non-compete and its cousins

The restrictive covenants section limits what you can do after you leave. The headline clause is the non-compete: typically a prohibition on practicing your specialty within a defined radius (commonly 10 to 30 miles per practice site) for a defined period (commonly 1 to 2 years).

The enforceability of physician non-competes varies dramatically by state — some states ban them outright, others restrict them for physicians specifically, and most enforce "reasonable" ones. While the FTC's attempted nationwide blanket ban was struck down by federal courts (leading the agency to formally drop its appeals and remove the rule from the registers), do not assume federal scrutiny is dead. The FTC has pivoted to aggressive, case-by-case enforcement under Section 5 of the FTC Act, explicitly warning healthcare systems that it is targeting overly restrictive non-competes that trap medical professionals. In tandem, a fresh wave of state-level statutory rollbacks means state law and targeted federal enforcement are what truly govern your contract.

When evaluating yours, multiply the terms: a 15-mile radius from one clinic is livable in a metro area; a 30-mile radius from every facility in the health system can cover an entire region and effectively require relocation. Watch also for the cousins: non-solicitation clauses (you cannot recruit patients or staff — generally reasonable), and non-disparagement clauses (read for mutuality).

Even in states where enforcement is uncertain, a non-compete has settlement value to the employer — defending against an enforcement attempt costs real money even if you win. Negotiate the radius, the duration, and the trigger (it should not apply if the employer terminates you without cause). This is the clause where state-specific attorney review earns its fee most clearly.

Termination clauses: how this ends matters more than how it begins

There are two ways out of any employment contract, and you need to understand both.

Without-cause termination lets either party end the relationship with notice — typically 60 to 180 days, with 90 the most common. Check that the notice period is mutual. A contract where the employer can terminate you on 60 days' notice but you must give 180 is lopsided. Then trace the consequences: if you are terminated without cause, do you keep your signing bonus? Who pays tail? Does the non-compete still apply? (It should not — being pushed out and then barred from working nearby is a genuinely bad outcome that you can negotiate away now.)

For-cause termination lets the employer end the contract immediately for specified misconduct. Read the list of causes carefully. Loss of license, exclusion from Medicare, felony conviction — fine. But vague entries like "conduct detrimental to the employer's reputation" or "failure to follow policies" give an employer broad discretion to convert a without-cause firing (with notice and protections) into a for-cause one (with neither). Ask for a cure provision: written notice of the alleged breach and 30 days to fix it before termination takes effect.

Call coverage: get the obligation in numbers, not adjectives

"Call shall be shared equitably among the physicians of the department" is not a call schedule — it is a blank check. Equitable among how many physicians? What happens when two of the five leave and are not replaced? Push for specifics: an expected call frequency (e.g., no more than 1-in-4), a cap, or at minimum a formula tied to the number of physicians in the group, plus what happens if staffing drops.

Then ask whether call is compensated. In many specialties, uncompensated "reasonable call" is standard up to a point, with per-diem or hourly stipends beyond it. If extra call pays, get the rate in the contract — not in a policy the employer can revise unilaterally. And confirm whether work generated on call (admissions, procedures) produces wRVUs credited to you under the productivity formula. It should.

Moonlighting and outside activities

Most employed-physician contracts contain an exclusivity or outside-activities clause: some prohibit outside clinical work entirely, others require written approval. If you plan to moonlight — and for a new attending, weekend or telehealth moonlighting at $100 to $250 an hour is one of the fastest levers for accelerating loan payoff or savings — get the permission framed correctly:

• Approval should be "not unreasonably withheld," not purely discretionary.
• Confirm whose malpractice covers the outside work (almost never your employer's; the moonlighting site or your own policy must cover it).
• Confirm that intellectual-property and outside-income clauses do not claim ownership of unrelated work — expert witness fees, consulting, writing, or a side business.

Also note the tax mechanics: most moonlighting pays on a 1099, which means quarterly estimated taxes and, on the upside, possible access to a solo 401(k) for additional retirement space. That is a separate topic, but the contract clause is where the opportunity is preserved or lost.

Common questions

Should I negotiate my first contract, or is the offer take-it-or-leave-it?

Negotiate. Employers expect it, and a measured, specific ask ("MGMA median for my specialty is $55/wRVU; this offer is $48 — can we close that gap?") does not put offers at risk. What does not work is vague asking ("can you do better?"). Recruiters and physician-staffing data consistently show most first offers have room on at least one of: conversion factor, signing bonus, relocation, CME, or tail coverage. The terms easiest to move are usually one-time costs (bonuses, tail) rather than recurring salary.

How much does a physician contract attorney cost, and is it worth it?

Typically $500 to $2,000 for a flat-fee review with a written summary and negotiation recommendations. Against a contract governing $300,000+ a year and clauses with six-figure downside (tail, non-compete, for-cause termination), the expected value is overwhelmingly positive. Choose an attorney who reviews physician contracts regularly in the state where you will practice — restrictive covenant and malpractice law are state-specific.

What is the single biggest mistake new attendings make with contracts?

Evaluating only the year-one number. The guarantee period, the post-guarantee formula, the tail obligation, and the non-compete determine your finances in years two through five — which is when most physicians actually leave their first job. National survey data has consistently shown a large share of physicians leave their first position within the first few years, so plan the exit terms as if you will use them.

Can I rely on what the recruiter told me verbally?

No. Almost every contract contains an integration clause ("this agreement constitutes the entire agreement...") that voids verbal promises. If the recruiter promised a scribe, a four-day week, or a $20,000 retention bonus, it goes in the contract or an addendum, or it does not exist.

What if the employer says "this is our standard contract, we don't modify it"?

Sometimes true at very large systems for boilerplate language — rarely true for the business terms. Even systems that won't touch the template will negotiate compensation, signing bonus, relocation, tail, and start date in an offer letter or addendum. "Standard contract" is an opening position, not a fact about the universe.

What to do next

1. Confirm the employing entity and, if PSLF matters to you, verify its nonprofit or government status before evaluating anything else.
2. Build the total compensation picture: salary or guarantee, productivity formula modeled at realistic wRVU levels, retirement match, CME, PTO, premiums. Compare offers on this number.
3. Read the exit terms first: termination notice and triggers, tail coverage responsibility in every scenario, non-compete radius and duration.
4. Model year three, not year one. Ask the employer for the formula math in writing.
5. Hire a physician contract attorney licensed in the practice state for a flat-fee review before signing anything — including a letter of intent, which can lock terms earlier than you expect.
6. Get every verbal promise in writing. No exceptions.

If you are an Attending Financial member, the Contract Reading Guide will walk your actual contract clause by clause and flag the terms covered here — it is a preparation tool for the attorney conversation, not a substitute for it.