Using recruitment agreements effectively

Physician recruitment agreements can be very beneficial to existing medical practice groups hoping to grow while keeping costs down. These agreements, which are exempt from anti-kickback regulations, allow for a hospital to guarantee the collections of a new physician for a limited amount of time in exchange for the physician staying within the hospital's service area for approximately three years after the guarantee ends. Additionally, the hospital can pay some of the incremental costs incurred by the practice group in hiring the physician. Practice groups should be careful when including a noncompetition provision or an anti-moonlighting provision in the context of a recruitment agreement, as it can have adverse consequences. Additionally, a practice group should avoid allowing the hospital to include an excess receipts clause in the agreement, as these clauses punish top performers.