5 Ways to Strengthen Your Approach to Provider Contracts in 2023

Mar 29, 2023 | Business

Whether you’re a provider or a healthcare employer, the hiring process is multilayered and complex, especially when it comes to contracts. 

When providers and employers aren’t clear on terms at the onset of an agreement, it often leads to confusion and can ultimately mean disputes. 

At Smith + Malek, we want to help prepare you as a provider for the best outcomes when signing on the dotted line. 

Here are the top 5 ways to strengthen your approach to provider contracts. 


1.Seek out counsel early and ask questions often about the provider offer letter. Provider offer letters are your “first impression” and a strong indicator of how the hiring process will go moving forward.  

While provider letters offer basic terms and aren’t generally binding, they do provide a summary of the offer’s terms and may also include contingencies like successful screenings or credentialing. 

By including an attorney in this process, they can confirm whether the contract is non-binding, along with going over the offer letter’s terms and their short and long-term implications. 


2. Understand the conditions around your formal contract. Unlike an offer letter, a formal contract is binding and lays out all the terms of your employment. Successfully drafting a formal contract is critical in avoiding disputes and confusion down the road for both providers and healthcare employers. 

We know the first place to look is the dollar amount, but the terms of your compensation extend far beyond salary. 

  • Be aware of your hours and call coverage. Asking yourself questions like: Will I have any on-call requirements? Will I have an after-hours emergency line? What happens if I exceed the number of call days in the contract, and can it be traded for PTO? 
  • Know your compliance, credentialing, and administrative obligations. The employer will likely have a handbook you will be required to follow. Make sure you have a copy of it. Along with compliance, you will likely have credentialing obligations to maintain like unrestricted licensure and a DEA license. It should also be made clear whether you will have any administrative obligations. For some specialty providers, that might mean PA supervision or management.
  • Keep an eye out for contract language that supports or discourages career-advancement. An employer may set a cap on your annual compensation. On the contrary, they may have terms that establish a guaranteed compensation  based on certain metrics. 
  • Read carefully through termination clauses. You may be beginning your relationship with an employer, but making sure the termination clause feels mutual and reasonable will prevent future disputes. 


 3.Know your compensation structure and why it matters.

There are generally two types of compensation structures an employer will offer – fixed or variable. Fixed compensation structures are most commonly seen with the hiring of new physicians and are based on a set salary independent of performance. Variable or RVU (Relative Value Unit) compensation uses formulas to account for the provider’s individual performance. Be aware that variable compensation contracts or RVU’s need a more critical eye than fixed compensation contracts. If your compensation is based on anything but salary alone, you should have total understanding of the terms of compensation before signing.

At this stage, negotiation will depend largely on the individual practice or employer. Many employers keep consistency in their contracts and limit negotiations for overall ease and time saving, but also to avoid discrepancies based on factors like age and gender. 


4. Ask critical questions about your benefits package. 

Benefits can add substantially to the value of your contract and long-term satisfaction.

A comprehensive list of benefits found at a larger practice might include PTO specifically for continuing education, company coverage of malpractice insurance, disability insurance, or even a repayment of student loans. 

Be sure to ask to review the benefits package as soon as possible. This will give you time to seek counsel from your attorney, along with scheduling time to speak with the employer’s HR department. Ask their department specific questions like how they pay premiums, especially as it pertains to your status as a single, married, or married with children provider. 

Most importantly, get clarity on malpractice and disability insurance coverage. Malpractice and disability insurance are often overlooked when reviewing a benefits package, but they have a lasting impact. If offered by the employer, ask whether your malpractice insurance provides tail coverage for previous employment. Disability insurance is also critical for specialty providers like surgeons.  


5. Determine how restrictive covenants are enforced and consider negotiating. While the benefits package is a source of excitement, restrictive covenants are all about the “non’s” – non-competition, non-solicitation, and non-disparagement agreements.  

There will be case, law, and statutes that govern when restrictive covenants are enforceable based on your location, which might include limitations such as in Idaho where non-competition agreements are restricted to 18 months or less. 

In this portion of the contract, you might also consider if there is anything else you’d like to negotiate. Be sure to seek out an attorney to discuss your options. 

Reviewing a provider contract takes extensive time and close attention from both the provider and employer. At Smith + Malek, we know that when you work together to set clear expectations at the onset, the path ahead will be in a mutually beneficial direction. 

More than anything, consult an attorney early on in the process who can help you understand the long-term implications and get the most benefits out of your provider contract.

Watch the entire replay of our webinar, and get in touch with our team today about how we can help you ensure your provider contract meets your unique needs.  

Skip ahead to minute 29:38 to learn more about how the Federal Trade Commission (FTC)’s newly proposed rule to ban non-compete agreements could impact you as a provider and employer.