So, you have a shiny new offer letter sitting in your inbox, and things are looking good so far. The employer is eager to get you on board, and you are equally eager to start your career. Then comes the question: should you jump into the licensing and credentialing process before your employment contract is negotiated and signed? It might feel like an easy “yes” at first glance, but the decision is trickier than it appears.
In this post, we will walk through the factors you should weigh before starting these processes, how they can affect your negotiating position, and the timelines you should keep in mind.
Understanding the Difference Between Licensing and Credentialing
Before we get into strategy, let’s make sure we are speaking the same language.
- Physician Licensing: This is the process of obtaining your state medical license and DEA registration. Without it, you cannot legally practice.
- Physician Credentialing: This is the process of verifying your qualifications, work history, education, and background so that you can obtain hospital privileges and be recognized by insurance panels.
Both steps are essential. However, the timing of when you begin them can have implications for your physician employment negotiations.
When It Makes Sense to Start Early
If you are certain that you will be practicing in a specific state, getting a head start on your licensing can be a smart move. For example, if you already know that you are joining a practice in Texas and you will accept this job or another job in Texas no matter what, beginning your state license and DEA application can keep your start date on track.
Licensing can take anywhere from three to six months, sometimes longer. If you are on a tight schedule and you delay, you may end up pushing back your start date, which can create stress for both you and your new employer. You will also start missing paychecks during a time that your personal finances are likely a bit rocky, and it’s smart to do everything you can to avoid this.
When It’s Better to Wait
On the other hand, if your decision to take the job or practice in this state is still tied to ongoing contract negotiations, hitting pause might be the wiser move. Licensing requires time, paperwork, and often fees that you cannot get back.
More importantly, starting the credentialing process before your contract is signed can signal to the employer that you are fully committed. This can unintentionally weaken your negotiating leverage. Employers may feel less urgency to meet your requests if they believe you are already “all in.” In fact, some employers will take this as a sign that they need not rush sending you the employment agreement at all. Some employers try to wait until a couple of weeks before your start date to hand over the employment agreement, which makes it next-to-impossible to negotiate. We highly recommend not agreeing to this!
How Credentialing Can Affect Negotiations
Credentialing is not just a formality. It involves completing detailed forms, submitting documents, and sometimes undergoing background checks. Once you begin, it sends a strong message of commitment.
Imagine this: your offer letter is bare bones, including only the base salary, signing bonus, time off, and other less important details. However, you get the contract and it’s riddled with problematic issues… a weak $/wRVU rate, ill-defined work obligations, or a gnarly noncompete.
Upon review, you have a list of contract changes you want, but the employer sees that you have already spent hours on credentialing paperwork. They may conclude that you will accept the offer even without those changes. This can result in a less favorable deal for you and decrease your negotiation leverage.
Strategic Timing for Early-Career Physicians
For physicians coming straight out of training, starting early is generally the best approach. If you can begin your job search and contract discussions 9 to 18 months before your intended start date, you will have much more flexibility.
With a long runway, you can:
- Negotiate your contract without rushing into licensing or credentialing.
- Begin licensing once your decision is clear, avoiding unnecessary fees.
- Start credentialing only after your employment terms are agreed upon.
This approach removes the pressure that comes when your desired start date is just a couple of months away. We want timeline pressure on the employer during negotiations, not you.
Are there exceptions? Sure. If you’re under tight timeline pressure, then you might need to get the ball rolling and accept some risks of reduced negotiation leverage.
Typical Timelines to Keep in Mind
Understanding how long these steps take can help you plan more effectively:
- State Medical License: 3 to 6 months (sometimes longer, depending on the state).
- DEA License: 4 to 6 weeks on average.
- Credentialing for Hospital Privileges: 2 to 3 months.
- Insurance Panel Enrollment: 2 to 3 months, sometimes longer.
If you start these processes too late, you may feel forced to accept whatever contract is in front of you just to get moving. Start date delays are quite common, and most employment agreements allow the employer to delay your start date and when they must start paying you if these prerequisites are not met. It’s a good idea to keep these timelines in mind and work backwards to determine how far in advance you need to get the ball rolling. Hint: 9-18 months is ideal.
Practical Tips for a Smooth Process
- Get advice early: Consult with an attorney who regularly evaluates and negotiates physician employment deals before committing to licensing and credentialing.
- Budget for fees: Licensing and credentialing costs can add up, so plan financially.
- Stay organized: Keep a checklist of required documents to avoid delays.
- Communicate timelines: Let your employer know your availability so expectations are clear.
The Bottom Line for Early-Career Physicians
Your first job sets the tone for your career. Rushing into licensing and credentialing before your physician contract is signed can reduce your leverage, increase your costs, and potentially lock you into less favorable terms.
If you know you are committed to a location and an employer, starting early can help you avoid delays. If your contract is still being negotiated, waiting may keep you in a stronger bargaining position.
Above all, plan ahead. Give yourself as much lead time as possible and get guidance from someone who understands physician contracts, physician employment laws, and the nuances of licensing and credentialing. Your future self will thank you. If you’d like help, the ideal time is during the interview process or before you sign an offer letter. Feel free to connect here!
FAQs
1. Should I start licensing before signing my contract?
Only if you are certain about your location; otherwise, you may risk unnecessary expenses. If you’re certain about your location but not certain about a particular employer, getting this started 9+ months in advance is a good strategic move.
2. How long does physician credentialing take?
Typically, 2 to 3 months, but it can take longer depending on the hospital and insurance panels. This is often paused until you are licensed, so it’s often tacked on to the end of the licensing process. Keep this timeline in mind, which is why we recommend starting your job search process at least 9 months ahead of time.
3. Can I negotiate after starting credentialing?
Yes, but employers may feel less urgency to agree to your changes once you have started the process.
4. Why is early planning so important for physicians?
Starting your job search and negotiations well in advance allows you to manage timelines, avoid rushed decisions, and secure better terms. We don’t want you to feel shot clock pressure.
