Hospital Recovers Income Guarantee Payments from Suspended Physician


Hospital Recovers Income Guarantee Payments from Suspended Physician

It should come as no surprise there are cases in which hospitals seek to and actually do recover income guarantee payments made to physicians whom, either through termination of employment or loss of hospital privileges, fail to fulfill the repayment requirements existing in most of those contractual arrangements.

They typical hospital guarantee arrangement provides advances to physicians to pay expenses and salary for some period of time, coupled with an agreement both to repay any excess amounts provided by the hospital and to forgive those amounts if the physician completes some guaranteed community service requirements.

In Alzadon v. Highlands Hospital Corporation, the physician lost both his hospital privileges and was disciplined by the Kentucky Board of Medical Licensure.

In this case, the trial court entered summary judgment on behalf of the hospital, and the Appellate Court agreed with the lower court that there were no genuine issues of material facts regarding the contract, the termination of the physician’s privileges, or the alleged obstruction by the hospital of the physician’s performance of the agreement. The physician had alleged that the hospital engaged in bad faith and interfered with this employment, but that argument was rejected by the courts.

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