Physician recruitment agreements: What you need to know before signing one

A physician recruitment agreement is a contract between a health care organization and a physician to address staffing needs in a specific location, often in underserved areas. These agreements typically offer incentives like salary guarantees, relocation assistance, and loan forgiveness, often structured as “forgivable loans” that are waived over time if the physician meets obligations such as staying in the area or maintaining patient volumes.

While beneficial, these agreements carry risks. Physicians may face repayment obligations if they leave before the contract term ends, potentially owing substantial sums. Non-compete clauses can further restrict future practice locations, limiting career flexibility. Misaligned expectations regarding patient volumes, staff support, or facilities can lead to dissatisfaction. Additionally, recruitment agreements must comply with federal regulations, such as the Stark Law and Anti-Kickback Statute, to avoid legal issues. Physicians should review agreements carefully, ideally with legal counsel, to fully understand their commitments and minimize risks.

Medical Economics spoke with Ericka Adler, an attorney and practice group manager, healthcare, with Roetzel & Andress, about the workings and risks of these agreements.