Coffee & Contracts: Severance Packages in Physician Contracts

In this episode, John from Contract Diagnostics answers a question about the commonality of severance packages in physician contracts. He explains that severance packages are not typically found in standard physician contracts. However, termination clauses are common, allowing either party to terminate the contract without cause, given a certain notice period.

If a physician gives a 90-day notice but the employer asks them to stop working after 5 days, the contract may stipulate that the physician should still be paid for the full 90 days. The specifics of how and what they are paid can vary and depend on the contract terms, including aspects like benefits, bonuses, and repayment of any upfront costs like relocation or student loans.

John also mentions that severance packages are more likely to be seen in administrative roles that blend clinical and executive duties, but not typically in a purely clinical physician role. In cases of partnership, there may be other forms of compensation related to accounts receivable or payables based on the partnership setup, but these are not necessarily severance packages.

Finally, John suggests that while it might be rare, it is possible to request a severance package in certain situations, such as a private equity transition where you're not allowed to be kept on, or if you were promised partnership but it didn't materialize.

For any further questions, John invites listeners to reach out to Contract Diagnostics through their website to book a free 15 min call at contractdiagnostics.com