Physician Contract Glossary · Compensation
Income Guarantee Agreement
An income guarantee agreement is a hospital's promise to top up your income to a set floor during your early years.
Hospitals use income guarantees to recruit physicians into a community. The hospital guarantees your income reaches a defined floor, and advances the shortfall when your collections fall below it. In nearly every case the advanced amount is structured as a forgivable loan: stay and practice in the area for the agreed term, and it is forgiven on a schedule. Leave early, and the unforgiven balance comes due, sometimes with interest.
The guarantee is a recruitment tool, not free money. Confirm the forgiveness schedule, the service-area requirement, and the tax treatment of forgiven amounts before you sign.
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