Sample Three: Letter of Intent

PHYSICIAN NAME AND ADDRESS

Dear PHYSICIAN NAME:

We are looking forward to working with you and are writing to outline the terms of the financial package that HOSPITAL NAME is able to offer to you should you elect to join the Medical Staff. This is conditioned upon approval and acceptance of your application for Medical Staff clinical privileges as well as the satisfactory outcome of discussions with and/or letters from your references. We are able to offer this package because our area is medically underserved for PHYSICIAN SPECIALTY physicians.

HOSPITAL NAME will guarantee a net income (after “reasonable practice expenses”) of $ per year or your first 24 months of practice. This will be in the form of a loan to you, which may be drawn down during that time. For the months that your income exceeds the guarantee, which on a monthly basis will amount to $ , HOSPITAL NAME will reimburse up to the amount of any previous advances. If your earnings do not reach the guarantee level for the first and second years based upon collections over the first 27 months, any outstanding balance which represents the difference between your collected monies and the amount guaranteed and advanced by HOSPITAL NAME at the end of the guarantee period, will become a loan that can be forgiven at a rate of 33% per year plus accrued interest over three years if you continue to practice in our community during that time.

As stated above, “reasonable practice expenses” shall generally be (in addition to traditional operating expenses):

1. Health, life, short and long-term disability and professional liability insurances.

2. 3 weeks’ vacation, 1 week CME, reimbursement for CME of $1,500.

3. Cell phone cost and monthly use.

4. IRS allowable automobile expense.

5. Local, county, state and national medical societies’ dues as well as

5 subscriptions for periodicals, newsletters and journals.

6. Reasonable expenses associated with business networking and

practice development.

In addition, HOSPITAL NAME will reimburse you for reasonable pre-approved expenses up to $ associated with moving your household to the

HOSPITAL CITY’S NAME Area. It is our understanding that this move will take place on or about MONTH, DAY, YEAR.

In consideration of the above, we expect you to maintain a full time practice in the

HOSPITAL CITY’S NAME Area, participate in Medicare, Medicaid and any other third-party-payor plans specified by HOSPITAL NAME.

If this offer is acceptable to you, please sign and return one copy of this document to us at your earliest convenience. This offer will be open for a period of thirty days from the date of this letter.

We truly hope that you will choose to practice in the HOSPITAL CITY’S NAME Area and we look forward to working with you now and in the future.

Sincerely,

NAME OF HOSPITAL REPRESENTATIVE

Accepted:

PHYSICIAN NAME