FAQtual Insights: The Contract Playbook Part 2

In part 2 of this FAQ, we move beyond the basics to explore how contract negotiation truly shapes compensation, autonomy, workflow, and long-term career trajectory for clinicians. For experienced NP/PAs, the focus is not just on securing a position, but on structuring a role that aligns with clinical expertise, productivity, and sustainability.

Below are key questions—and evidence-based considerations—to guide this process, informed by insights from Joseph Gatti, DMSc, MPAS, MBA, a board-certified dermatology physician assistant with over 8 years of experience in contract negotiation consulting.

To help readers understand the most common contract pitfalls without diving into a full agreement, Joe has provided Appendix A: a fully anonymized set of 9 “red-flag” clauses. Scrubbed of identifying details and fictionalized for privacy, it highlights key risks clinicians should watch for when reviewing any contract.

Appendix A

Exhibit 1

Exhibit 2

Exhibit 1 reproduces an actual provider contract in full, anonymized, with every clause intact. This 25-page document highlights the hidden landmines in a high-production, no-base compensation agreement, including a sweeping non-compete, personal liability for insurance recoupments, tail coverage shifts, and the ability for the practice to sell your contract without notice. Seeing the actual language helps clinicians understand how these clauses can affect career mobility and financial risk.

Exhibit 2 analyzes 17 additional clauses from the same contract, color-coded by severity. Red indicates provisions that can cause real financial or career harm, orange shows exploitable clauses that could be misused by a bad-faith employer, and yellow flags clauses that are technically common but tilt heavily in the employer’s favor. Each entry includes a generic state law citation to help clinicians understand the legal context and what to watch for when negotiating.

What contract terms are most commonly overlooked?

Several non-compensation terms can significantly impact long-term satisfaction and should be reviewed carefully. These include non-compete clauses (geographic scope and duration), malpractice coverage (claims-made vs occurrence), sign-on bonus repayment terms, CME, and schedule structure.¹

These provisions often feel like boilerplate—but they are the terms that matter most when you want to leave. Non-competes can restrict future employment opportunities, and claims-made malpractice policies may require the clinician to purchase tail coverage upon departure, which can cost thousands of dollars.²

A common scenario: a clinician signs a contract focused on salary, skimming the exit provisions. Months or years later, the practice changes—new ownership, new expectations—and they want out. Suddenly, they are facing a broad non-compete, a 5-figure tail insurance bill, and repayment of a sign-on bonus. Leaving can become financially and professionally disruptive.

Bottom line: Contracts matter most when things go wrong. Review exit terms as carefully as compensation, and consider having an attorney review the agreement.

Gatti’s advice:

“Clinicians focus on what the contract gives them. The provisions that actually cost money are the ones that govern what happens when you leave. My advice: read the exit section first. If you do not like the way out, do not walk in.”

How should I evaluate and negotiate a non-compete clause?

Non-compete clauses are enforceable in many states if considered reasonable in scope, geography, and duration. Evaluating one requires understanding how far it extends, how long it lasts, and what type of work it restricts. Narrower geographic limits and shorter durations are generally more favorable.³

However, wording matters. A clause tied to “any office operated by the practice” can unintentionally expand to cover an entire metropolitan area if multiple locations exist. Modifying the restriction to a smaller radius tied to your primary practice location can protect the employer’s interests without overly limiting your future options.

It is also important to recognize that non-compete laws are evolving rapidly, with several states enacting new restrictions for health care professionals. What is written in a contract may not always reflect what is enforceable—so reviewing current state law is essential.

Bottom line: Map the radius, understand the real-world impact, and negotiate for limits that reflect where you actually practice.

Gatti’s advice:

“A non-compete tied to every office the organization operates is not protecting a business interest. It is locking the door behind you. Map the radius before you sign. Literally. What you see will probably change the conversation. And insist on the non-compete based solely upon the location you actually work day to day.”

When is a collections-based compensation model appropriate?

Collections-based compensation is the dominant model in private dermatology and can be highly advantageous in efficient, high-volume practices. However, it introduces variability and requires transparency to function fairly.⁴

Before agreeing to this structure, clinicians should clarify:

• What counts as “collections” (net after adjustments vs gross charges)
• The percentage paid (commonly 25–35% of net collections)
• How often compensation is reconciled (monthly preferred)
• Whether they have access to their own production data

Without transparency, it becomes difficult to verify whether compensation accurately reflects clinical work. Delayed reconciliation or lack of access to billing data can shift financial control entirely to the employer.

Bottom line: Collections models work when billing is clean, data is transparent, and clinicians can verify their own numbers.

Gatti’s advice:

“Collections comp works when 3 conditions are met: clean billing, transparent data, and provider access to their own numbers. Remove any one and the model breaks. If the employer will not show you your production reports, you are not in a collections model. You are in a trust model. In my experience, those do not age particularly well.”

How should experienced clinicians approach negotiation differently?

Experienced NP/PAs bring measurable value through efficiency, procedural skill, and independent patient management. Negotiation should reflect this by focusing not only on compensation, but also on role structure, scheduling control, and procedural access.⁵

Clinicians with a track record of productivity should come prepared with objective data—such as prior collections or patient volume—and use it to justify compensation and contract terms. This shifts the conversation from subjective value to measurable contribution.

However, experience does not automatically translate across markets. Differences in payer mix, reimbursement rates, and patient demographics can significantly impact earning potential. Understanding the local market economics is essential before using prior performance as a benchmark.

Bottom line: Experienced clinicians should negotiate as revenue-generating assets—but with a clear understanding of the market they are entering.

Gatti’s advice:

“Five or more years in derm, a production track record, and a full procedural skill set? You are not applying for a job. You are evaluating a business opportunity. But your numbers only mean something if you understand the market you are walking into. Do the homework first. Then negotiate like you belong at the table, because you do.”

How does current workforce demand influence negotiation?

Demand for dermatologic care remains high in many regions, often driven by provider shortages and increasing patient need.⁶ In underserved areas, long wait times can create significant opportunity for NP/PAs to expand access and generate revenue.

However, demand alone does not determine value. The payer mix and reimbursement environment ultimately define what that demand is worth financially. A high-volume practice with predominantly commercial insurance will have very different economics than one with a large Medicaid population.

Understanding local demand, wait times, competition, and payer mix provides critical context when evaluating an offer and negotiating terms.

Bottom line: Negotiating power comes from understanding both the demand you meet and the economics behind it.

Gatti’s advice:

“Negotiating power comes from understanding what problem you solve and what that solution is worth in the specific market where you will practice. A 4-month wait list tells you the demand is real. The payer mix tells you what that demand is actually worth. Know both before you name a number.”

What is the most common mistake clinicians make during negotiation?

A common mistake is focusing primarily on base salary while overlooking the broader contract structure. Compensation models, productivity expectations, restrictive covenants, and exit terms often have a greater impact on long-term outcomes.⁴,⁵

Three patterns contribute to poor negotiation outcomes:

• Not seeking legal review
• Not understanding the local market
• Relying too heavily on peer advice

These factors can lead clinicians to sign agreements that appear competitive initially but contain unfavorable terms that become apparent over time.

Bottom line: A comprehensive, data-informed review of both financial and non-financial terms is essential to ensure alignment with long-term professional goals.

Gatti’s advice:

“The contract is not a formality. It is the document that will govern your income, your mobility, and your professional life for years. Hire an attorney who specializes in medical employment law. Learn the economics of your specific market. And stop taking contract advice from people who are not qualified to give it, no matter how much you trust them. The stakes are too high for secondhand wisdom.”

References

1. American Medical Association. Physician Employment Contracting Toolkit. Chicago, IL: AMA; 2022. Accessed March 23, 2026. https://www.ama-assn.org/practice-management/physician-employment-contracting-toolkit
2. Medical Professional Liability Association. Claims-Made vs Occurrence Coverage Explained. Dallas, TX: MPLA; 2023. Accessed March 23, 2026. https://www.medpro.com/resources/claims-made-vs-occurrence
3. Federation of State Medical Boards. US Medical Regulatory Trends and Actions. Euless, TX: FSMB; 2024. Accessed March 23, 2026. https://www.fsmb.org/siteassets/advocacy/publications/us-medical-regulatory-trends.pdf
4. Medical Group Management Association. Provider Compensation and Production Report. Englewood, CO: MGMA; 2023. Accessed March 23, 2026. https://www.mgma.com/data/benchmarking
5. American Academy of Physician Associates. 2023 AAPA Salary Report. Alexandria, VA: AAPA; 2023. Accessed March 23, 2026. https://www.aapa.org/research/2023-aapa-salary-report/
6. Resneck JS Jr, Kimball AB. The dermatology workforce shortage. J Am Acad Dermatol. 2004;50(1):50-54.