Physician Recruitment Income Guarantees Ease Hiring Of New Docs

Many of the larger facilities we work with offer new physician employees income guarantees as part of their employment package. Recently, physician income guarantee agreements are enjoying a resurgence.

What is an income guarantee? The facility guarantees that the new physician will earn a set amount of total income in the first 12-24 months of employment. If the cases completed do not reimburse the physician according to the guarantee level, the facility pays the additional income to the physician, thus 'guaranteeing' a certain amount of income. Technically, this is a “loan” to the doctor, but the “loan” is forgiven if the physician remains in practice in the hospital’s service area for 2-4 years after the guarantee period.

Income guarantees are becoming more common in new physician employment offers. The income guarantee serves to alleviate the concerns of the group or facility that if it hires the new physician, the senior doctors will be forced to take a pay cut to fund the new doctor’s salary, as that doctor ramps up his or her practice.

Income guarantee agreements are complex, and there are generally many strings attached, i.e. potentially no non-compete for group, taxes issues, and liability issues.

Daniel M. Bernick is an Attorney and Principal of Health Care Law Associates and has provided an article explaining income guarantees and also 7 core legal and business pointers about the guarantee agreements.

Read the full article in Physicians News Digest, or click here:

http://www.physiciansnews.com/2010/01/14/physician-recruitment-income-guarantees-ease-hiring-of-new-docs/