Physician Recuitment Agreements: Thinking Ahead
Knoxville Academy of Medicine Bulletin – September 2008
By Patti T. Cotten

Physician/Hospital recruitment arrangements are popular options for defraying the costs of recruiting a new doctor into an existing practice – at least until something goes wrong.  What does the group do when a recruited physician leaves the community before “working off” his repayment obligation?   What happens if neither the group nor the community has enough patients to support the recruited physician’s new practice once the hospital’s financial assistance is gone? 

These real-life possibilities must be addressed at the outset, before they ever happen, because once the parties have signed the recruitment agreement, regulatory constraints may tie their hands to fashion a workable resolution after the fact.   So, advance planning is the key for these important issues:

• Is the “support period” proportional to the “forgiveness/repayment period”?  If the physician has the option to shorten the support period, try to shorten the forgiveness period in an equal ratio.
• Do you have an option to find a replacement physician if the recruited physician leaves the community so that the group may continue to earn forgiveness of its repayment obligation? 
• Does your agreement provide that accountant and attorney’s fees in negotiating the recruitment agreement are deemed reimbursable “practice expenses”? 
• Negotiate upfront solutions in case the recruited physician is unable to establish an economically viable practice and has to leave the community to find profitable work. 
• If physician/group has an accelerated repayment obligation upon early termination, can the repayment be spread over a reasonable time period, as opposed to accelerated and due immediately?
• Is forgiveness tied to the recruited physician staying in the community, as opposed to with a particular group or on the hospital campus? 

Before you sign a recruitment agreement, think ahead!

Disclaimer: The information contained herein is strictly informational; it is not to be construed as legal advice.