Physician Employment Agreement Attorneys In Texas

Houston Attorneys For Reviewing & Negotiating Physician Contracts

Whether you’re considering offers at the end of residency, need to hire a doctor for your new medical practice or existing group, or face any matter involving the employment of a physician in Texas, the contracts you execute define the future of employment relationships, and have major implications for practitioners and practices alike.

At Hendershot Cowart P.C., our physician contract attorneys have extensive experience in matters of medical contracts and health and medical law. We have been reviewing and negotiating physician employment agreements since 1987, and regularly counsel physicians, hospitals, and practice managers as they consider employment offers or devise agreements critical to their practice.

Our attorneys review physician employment contracts and advise you against pitfalls that could have unintended consequences. Call (713) 783-3110 or contact us online to speak with a physician contract attorney.

On This Page:

• Reviewing & Negotiating Physician Employment Contracts
• Knowing Your Worth in the Physician Job Market
• Understanding Bonus Structures and Productivity Formulas
• Understanding Professional Liability Insurance Coverage
• Navigating Hospital Recruitment Agreements
• Texas Physician Non-Compete Agreements
• Physician Non-Compete Negotiation Strategies
• Understanding Termination Provisions and Dispute Resolution
• Consult a Texas Medical Contract Attorney Before You Sign
• FAQs About Physician Employment Agreements

Reviewing & Negotiating Physician Employment Contracts

Once presented with your employment agreement, the healthcare lawyers at Hendershot Cowart can step in to quickly review the contract, redline suggested revisions, provide a competitive analysis of your compensation, and negotiate on your behalf, as requested.

While compensation is often a top priority, our attorneys also look to eliminate other pitfalls, such as vague language (i.e., “…at the practice’s discretion”), bonus thresholds that are not clearly defined, and overly restrictive non-compete agreements. We can also help ensure that verbal agreements made during the recruitment process are clearly reflected in writing.

The health law attorneys at Hendershot Cowart P.C. generally consider these questions when reviewing or negotiating an employment agreement on your behalf:

• What are the physician’s duties and responsibilities? How many hours is the physician expected to work? How many days per week? How many hours/shifts on call?
• Are the employer’s duties and obligations recorded in the agreement? Employer obligations, such as maintaining sufficient staff and compliant billing practices, can impact your productivity and compensation.
• What is the base salary? How is it calculated? How is bonus or productivity compensation calculated? What happens if the physician misses productivity targets? Are base compensation and bonuses calculated in compliance with regulatory laws?
• For collections-based incentives, are the productivity formula, amounts, and methodology clearly defined? Does the physician have access to books and records if compensation is based on net collection rate?
• For compensation based on measurement, how are work units generated?
• Will the scheduling of patients be equitable?
• What is included in the benefits package (health, vision, dental, life, retirement, continuing medical education, etc.)? When do benefits commence? How much vacation time is offered?
• What type of professional liability insurance is offered? Claims-made or occurrence? If tail insurance is necessary, who covers it if the employment contract is terminated?
• Is there a non-compete or non-solicitation provision? What are the restrictions? Is there a buy-out provision? Does it comply with Texas law?
• What is the term of the employment agreement? Does it automatically renew?
• What is cause for termination? Can the physician be terminated without cause? Will the physician get notice and an opportunity to cure?
• Who owns intellectual property a physician may develop while employed?
• Does the physician need consent to “moonlight”? Will the physician be expected to share the revenue from outside activities?
• Is there an indemnification clause? Is there mutual indemnification? Be mindful of any provision that broadly requires you to indemnify or hold harmless your employer under any circumstances.
• Do you need a buy-in clause? Some medical groups may choose to offer physicians the opportunity to buy into the group, or become a partner, after a period of time or certain benchmarks have been met. These types of agreements can be drafted separately from initial employment agreements.

Knowing Your Worth in the Physician Job Market

How do you determine what is fair and reasonable compensation within your market?

At Hendershot Cowart, we can conduct a comprehensive compensation analysis and advise if your offer falls within the 25th, 50th, 75th, or 90th percentile range for your specialty. This knowledge can provide powerful leverage when negotiating your compensation package.

Factors we consider when analyzing your compensation offer include:

• Academic or private practice
• Geographic region
• Your years in practice
• Single specialty group practice or multi-specialty group practice
• Practice type (single specialty or multi-specialty group)
• Hospital-based vs. private practice compensation differences

We maintain extensive data on physician compensation trends, including wRVU values across specialties, enabling you to negotiate from a position of knowledge rather than uncertainty.

Understanding Bonus Structures and Productivity Formulas

When reviewing employment agreements, we pay careful attention to how bonus calculations are structured. The two largest areas of physician employment litigation involve non-competes and compensation disputes.

Key considerations for productivity-based compensation:

• Ensuring bonus formulas are clearly defined with transparent calculation methods
• Securing your right to inspect applicable books and records to verify compensation calculations
• Establishing fair reconciliation processes for both underpayment and overpayment situations
• Defining appropriate wRVU values for your specialty with benchmark comparisons
• Ensuring equitable patient scheduling that supports your productivity goals

Understanding Professional Liability Insurance Coverage

The type of malpractice insurance provided in your employment agreement significantly impacts your future liability. 

We evaluate: 

• Claims-made vs. occurrence-based coverage
• Tail coverage requirements and who bears the cost if employment terminates
• The financial implications of each insurance type for your specific situation

Navigating Hospital Recruitment Agreements

Recruitment agreements between hospitals and physician practices can create unexpected tax implications for physicians:

Key considerations include:

• Understanding how recruitment funds flow through the practice to compensate you
• Planning for potential tax liability from forgiven loan amounts (typically reported on a 1099)
• Ensuring joint liability between you and the practice for any repayment obligations
• Negotiating protection if your employment is terminated for reasons outside your control

Texas Physician Non-Compete Agreements

A physician non-compete agreement, or a restrictive covenant clause, protects both individual practitioners and provider organizations. Non-competes provide practices and hospitals with the ability to invest in new physicians and offer practitioners legal protections to continue in their field when an employment relationship ends.

Enforceable physician non-competes in Texas must meet requirements under the state’s Business Commerce Code, which generally obligate that the agreement is:

• "Ancillary to or part of an otherwise enforceable agreement" entered into at the same time (such as an employment agreement); and
• Only contains limitations on the scope of work, duration, and geographic area that are "reasonable" and do not "impose a greater restraint than is necessary to protect the goodwill or other business interest" of the employer.

Specific protections for physicians and patients create additional requirements, including:

• Permission for physicians to treat patients with acute illness as long as needed following termination of the employment relationship;
• Terms that provide for the physician's ability to buy-out the non-compete agreement; and
• Delivery of patient records in the format in which they have been maintained.

Physician Non-Compete Negotiation Strategies:

We regularly negotiate exceptions to non-compete provisions, particularly for situations where:

• Employment is terminated without cause by the employer
• The geographic scope covers multiple facilities where you may not primarily practice
• The scope of restricted services extends beyond what you actually provide

Learn more about Physician Non-Compete Agreements in Texas.

Understanding Termination Provisions and Dispute Resolution

Many physician employment agreements specify how disputes will be resolved, which can impact your rights and options:

Types of dispute resolution:

• Arbitration: A private process where disputes are resolved by one or more arbitrators rather than through public court proceedings
• Mediation: A facilitated negotiation where a neutral third party helps the parties reach a mutually acceptable resolution
• Litigation: Traditional court proceedings with established rules of civil procedure

Each approach has different implications regarding cost, confidentiality, appeal rights, and timeline. We help physicians understand these differences and negotiate favorable dispute resolution terms.

Consult a Texas Medical Contract Attorney Before You Sign

For similar reasons a surgeon wouldn’t operate on themselves, physicians and providers should be wary of reviewing or drafting their own employment agreements without the help of knowledgeable and experienced health law attorneys. At Hendershot Cowart P.C., we can identify and resolve issues before they impact your career or practice. We negotiate, draft, and review all aspects of physician employment agreements in accordance with state and federal laws, and with our client’s unique circumstances in mind.

Call (713) 783-3110 or contact us online to speak with a Texas healthcare attorney about a physician employee agreement review, compensation analysis, or our negotiation services.

Frequently Asked Questions About Physician Employment Agreements

Can I negotiate for part-time hours in my physician contract?

Yes, you can negotiate for part-time hours in your physician employment agreement, though the feasibility depends on the employer's needs and flexibility. Many practices and hospitals are increasingly accommodating part-time arrangements to attract and retain talented physicians.

When negotiating for part-time hours (such as 80 percent of full-time):

• Clearly define what "part-time" means in terms of hours per week, days per week, or patient encounters
• Understand how compensation will be prorated (including base salary, bonuses, and benefits)
• Clarify call coverage responsibilities, which should ideally be proportionate to your part-time status
• Discuss how productivity targets and bonuses will be adjusted for your reduced schedule
• Consider how part-time status might affect partnership track timelines, if applicable

Remember that even large organizations may be willing to accommodate part-time arrangements for the right candidate. The key is to discuss your needs early in the interview process to determine if there's a potential fit before proceeding to contract negotiations.

Is there a gender pay gap in physician contracts? How can I ensure fair compensation?

Yes, gender pay disparities do exist in physician employment contracts, though the gap has been decreasing in recent years. Several studies have documented persistent compensation differences between male and female physicians across most specialties, even when controlling for factors like productivity, experience, and practice setting.

A healthcare attorney experienced in physician contracts can evaluate whether your offer is competitive and help negotiate improvements. 

Who pays for my tail insurance if I leave the practice?

The responsibility for tail insurance coverage when a physician leaves a practice depends entirely on the terms negotiated in your employment agreement. This is a critical item to address during contract negotiations, as tail coverage can cost tens of thousands of dollars.

Since claims-made malpractice policies only cover claims reported while the policy is active, tail coverage (also called "extended reporting endorsement") is essential to protect against claims filed after you've left the practice. 

Given the significant cost, this should be a key negotiation point in your employment agreement.

What are common physician employment contract mistakes to avoid?

The most common and costly contract mistakes physicians make include:

1. Accepting vague language: Ambiguous phrases like "duties as assigned at the employer's discretion" or "reasonable call schedule" can lead to unexpected obligations.
2. Neglecting to get promises in writing: Verbal assurances made during recruitment about the location of the medical office where you’ll be assigned, schedule flexibility, or support staff must be documented in the contract to be enforceable.
3. Accepting overly restrictive non-compete clauses: An attorney can help you negotiate non-compete terms that are fair and reasonable to you and still protect the goodwill of your employer.
4. Getting stuck with more than your fair share of on-call duty: As the new kid on the block, you may get assigned to be “on call” outside business hours more often than your peers. Don’t leave the assignment of on-call services at the sole discretion of the medical director. Your attorney can help you negotiate a limit or include the required hours of on-call services in the agreement.
5. Your ability to exercise independent medical judgement is impeded: Our attorneys can examine your contract to identify any provisions or arrangements that may result in inappropriate control over the practice of medicine, and help you establish clear boundaries to protect your medical decision-making.

Contact our healthcare law firm today to schedule a physician employment agreement review. Our goal is to help you avoid costly mistakes, like these, that could impede your career and interrupt your ability to serve your patients.

What should I know about intellectual property provisions in my contract?

Intellectual property (IP) provisions in physician employment contracts govern ownership of innovations, research, publications, and other creative works you develop during your employment. These provisions deserve careful attention, especially if you engage in research, writing, or developing new medical procedures or technologies.

Key considerations include:

1. Work-for-hire provisions: Many contracts contain "work-for-hire" provisions stating that anything you develop using employer resources or during work hours belongs to the employer
2. Existing IP protection: If you've been in practice for a few years and already developed your own intellectual property, make sure this pre-existing IP is specifically "carved out" of the agreement, especially if there's a work-for-hire doctrine included.
3. Separate development: If you engage in research or innovation outside your employment, include provisions to ensure that intellectual property developed separately from your employer and without using employer resources, remains your property.

For physicians with significant research interests or entrepreneurial aspirations, intellectual property provisions can be as important as compensation terms. Having these provisions reviewed by an attorney with experience in both healthcare and intellectual property law is essential.