When Are Incentive Compensation Plans Necessary and Appropriate?
So, how can tax-exempt health care organizations remain compliant and still compete in recruiting top-notch physicians against other hospitals and HMOs that don’t fall under IRS prohibitions? It is now common for offers to include some or all of the following: moving expenses, signing bonuses, loan guarantees, income guarantees, incentive compensation, below-market rent for office space, etc. In most cases, you will avoid government scrutiny if you can clearly demonstrate the need for the physician’s services to provide care and promote the general health and well-being of a community. And again, Health Professional Shortage Areas are typically granted more flexibility in the incentives they can offer physicians (e.g., relocation is almost always a factor in recruiting a candidate to rural or underserved areas). You may contact the IRS for further clarification on the guidelines and to receive information on hypothetical recruitment scenarios, to help you determine if your current recr
