For example, do not commit to buying a house in the area and do not turn down other offers. For the remainder of this article, I will outline the major provisions to be found in a typical contract, starting with compensation. Most physicians are paid a guaranteed salary, at least for the first year. Some, however, are paid purely on a percentage of collections or charges they generate. Often the salary in future years is not set forth.
Most contracts also provide for an incentive bonus.
If there is a specific formula, it is usually tied to the collections you generate, but sometimes is based upon the senior physicians reaching a certain baseline compensation. Alternatively, you may be entitled to some set percentage of the profits of the practice after the senior physicians are paid salary at least equal to their salaries for the year prior to your joining the practice. If the bonus is tied to your productivity, the key issues to negotiate are the percentage and the collections level. The level is usually at least two times salary and does not usually exceed three times salary. This allows the practice to cover its overhead.