Your base salary might only account for 60–70% of your total potential earnings. Bonuses, benefits, incentives, and other contractual elements make up the rest. Here’s what you need to look for:
1. Base Salary
This is your guaranteed annual income, typically paid in biweekly or monthly installments.
But is it truly guaranteed?
- Sometimes it’s tied to productivity (measured in RVUs)
- In private practice, the base may decrease after the first year or two, especially if the expectation is to transition to production-based pay
Pro Tip: Ask whether the base salary is guaranteed for multiple years and how it transitions over time.
2. Signing Bonus
This one-time payment is often used to sweeten the deal and encourage you to accept the offer.
- Common payout timelines: first paycheck, after 30/60/90 days, or after credentialing
- Clawback clauses are common—you may have to repay it if you leave early (typically within 12–24 months)
Always ask: “Is there a repayment clause tied to the signing bonus?”
3. Productivity Bonus
Productivity bonuses are earned based on how much clinical work you perform. This is often based on RVUs (Relative Value Units), patient volume, or collections.
Example language:
- “$40 per RVU over 6,000 RVUs annually”
- “Quarterly bonus based on patient satisfaction or quality scores”
Ask: What’s the average RVU production for someone in this role or specialty? Is the target achievable?
4. Work RVUs (wRVUs)
Work RVUs quantify the amount and complexity of the clinical work you do. They are:
- Used nationally to measure productivity
- Tied to specific CPT codes
- The basis for productivity-based compensation in many systems
More complex visits (e.g., surgery, complex consults) earn more wRVUs.
In Chapter 4, we’ll dive deeper into how RVUs are calculated and how to maximize your earnings through them.
5. Collections-Based Pay
Instead of RVUs, some contracts base your bonus or commission on the actual money collected by your employer from your services.
While this sounds fair, it can be risky:
- You’re penalized if the billing department underperforms
- You earn less if your patients are mostly Medicaid/Medicare (payer mix matters)
Clarify: Is my bonus based on charges, collections, or RVUs?
6. W-2 vs. 1099 Employment Status
This is a huge distinction that impacts your taxes, benefits, and responsibilities.
- W-2 Employee:
- Employer withholds taxes
- Eligible for benefits (insurance, retirement)
- Generally more job security
- 1099 Independent Contractor:
- You pay your own taxes
- No employer-provided benefits
- Often a higher hourly rate
Ask yourself: Are you prepared to manage your own health insurance and retirement if you’re 1099?
7. Benefits Package
Physicians often undervalue this part of the offer, but it can add $20,000–$40,000+ annually to your compensation.
Common benefits to review:
- Health, dental, vision insurance (and dependent coverage)
- CME allowance (annual amount + days off)
- Paid time off (vacation, holidays, sick days)
- 401(k)/403(b) retirement plans + employer match
- Malpractice coverage (with or without tail)
- Licensing, credentialing, and dues reimbursements
Always ask for a full benefits summary. Compare across offers using total compensation.
8. Malpractice & Tail Coverage
Most employers cover malpractice insurance, but the type matters:
- Occurrence-based: Covers you for incidents that occurred during your employment, even if the claim is filed later. No tail needed.
- Claims-made: Covers only if the claim is made while your policy is active. If you leave, you need tail coverage.
Tail coverage can cost $10,000–$50,000+, depending on specialty.
Key question: Will I be responsible for paying tail coverage if I leave the job?
Breaking Down a Sample Offer Letter
Let’s say you receive this in an email:
“Compensation: $225,000 base salary. Eligible for up to $30,000 productivity bonus based on annual RVU production exceeding 5,500. Signing bonus of $15,000 payable upon completion of 90 days. 403(b) match up to 4%. CME: $3,500/year and 5 days. Medical, dental, and malpractice coverage provided. Candidate responsible for tail coverage if leaving before 2 years.”
What to Evaluate:
- Base salary: Solid for primary care, but how does it compare to MGMA benchmarks?
- RVU Threshold: Is 5,500 RVUs reasonable for this job? Ask how other doctors perform.
- Signing Bonus: Delayed payout. Look for clawback language.
- Tail Coverage: This could be a red flag if you’re unsure about long-term fit.
Always request the full contract, not just the summary. Look beyond the headlines.
Know What Matters to You
Before you negotiate or even apply, reflect on your top three compensation priorities. These might include:
- Highest guaranteed base salary
- Loan repayment assistance
- Minimal call responsibilities
- Paid parental leave
- Fast track to partnership or ownership
Compensation is personal. What works for your classmate may not work for you.
Final Thoughts
Compensation packages are complex for a reason—they balance employer risk, incentive alignment, and competitive recruiting.
Your job is to:
- Understand each component
- Ask clear, confident questions
- Make sure the offer matches your values and goals