Promissory Note Example for Hospital

SECURED MEDICAL SERVICES PROMISSORY NOTE

DOCUMENT ID: PN-HOSP-2024-99-ALPHA
EFFECTIVE DATE: [Insert Effective Date]
VERSION: 2.1
GOVERNING JURISDICTION: [Insert State/Province], [Insert Country]

---

STATUTORY & LEGAL COMPLIANCE NOTICE

IMPORTANT NOTICE TO CONSUMER/PATIENT: THIS DOCUMENT CONSTITUTES A LEGALLY BINDING OBLIGATION FOR THE REPAYMENT OF DEBT INCURRED FOR MEDICAL SERVICES. THIS INSTRUMENT MAY BE SUBJECT TO FEDERAL AND STATE CONSUMER PROTECTION LAWS, INCLUDING THE TRUTH IN LENDING ACT (TILA) AND THE FAIR DEBT COLLECTION PRACTICES ACT (FDCPA). THE MAKER (PATIENT/GUARANTOR) IS ADVISED TO REVIEW ALL TERMS CAREFULLY. THIS DOCUMENT DOES NOT CONSTITUTE MEDICAL ADVICE. THE ENFORCEABILITY OF SPECIFIC CLAUSES, INCLUDING LATE FEES AND INTEREST RATES, IS SUBJECT TO USURY LAWS AND LOCAL STATUTORY CEILINGS WITHIN THE GOVERNING JURISDICTION.

---

1. PARTIES & RECITALS

1.1 THE PARTIES. This Promissory Note (the "Note") is entered into on the Effective Date by and between:

• THE PAYEE (CREDITOR): [Hospital/Healthcare System Full Legal Name], a [Type of Entity, e.g., Non-Profit Corporation], located at [Principal Business Address] (hereinafter "Hospital").
• THE MAKER (DEBTOR): [Patient or Responsible Party Full Legal Name], residing at [Principal Residential Address] (hereinafter "Maker").

1.2 RECITALS.

• WHEREAS, Maker (or a dependent of Maker) has received medical services, clinical treatments, and/or hospital facilities provided by the Hospital;
• WHEREAS, an outstanding balance for said services has been finalized after the application of all applicable insurance credits and adjustments;
• WHEREAS, Maker acknowledges the validity of the debt and desires to establish a structured repayment plan to satisfy the balance.

1.3 PRINCIPAL AMOUNT. For value received, Maker promises to pay to the order of Hospital the principal sum of [Total Amount in USD] (the "Principal Amount").

---

2. OPERATIVE CLAUSES & LEGAL TERMS

2.1 SCOPE OF SERVICES & ACKNOWLEDGMENT OF DEBT

The Principal Amount represents the total outstanding balance for medical services rendered during the period of [Start Date] to [End Date]. Maker hereby acknowledges that the services were rendered, were medically necessary (to the best of Maker’s knowledge at the time of service), and that the amount stated is due and owing without offset or defense.

2.2 COMPENSATION & PAYMENT TERMS

• Interest: The unpaid Principal Amount shall bear interest at a rate of [Insert Rate, e.g., 5%] per annum, or the maximum rate allowed by law, whichever is less.
• Payment Schedule: Maker shall pay the Principal Amount and Interest in [Number] consecutive monthly installments of [Monthly Amount in USD].
• Maturity Date: The entire unpaid balance, including accrued interest, shall be due and payable in full on [Insert Final Maturity Date].
• Invoicing: Hospital will provide a monthly statement; however, the absence of an invoice does not relieve Maker of the obligation to make timely payments.

2.3 LATE CHARGES & DEFAULT INTEREST

In the event any payment is not received within [Number, e.g., 10] days of the due date, a late fee of [Amount or %] shall be assessed. If Maker fails to cure a payment default within [Number] days, the Hospital may, at its option, increase the interest rate on the remaining balance to the "Default Rate" of [Insert Default Rate]% per annum.

2.4 TERM & TERMINATION (ACCELERATION)

This Note shall remain in effect until the Principal Amount, interest, and any associated fees are paid in full. Upon the occurrence of a "Default" (defined as failure to pay, bankruptcy of Maker, or breach of any provision herein), the Hospital may declare the entire remaining Principal Amount and accrued interest immediately due and payable (Acceleration) without further notice or demand.

2.5 OWNERSHIP OF DATA & MEDICAL RECORDS

While the debt persists, Maker acknowledges that all clinical records, diagnostic imagery, and medical data generated during the service period remain the property of the Hospital, subject to Maker’s right of access and privacy under HIPAA (Health Insurance Portability and Accountability Act) and applicable state laws. Payment of this Note does not grant Maker "ownership" of the physical/digital records, only the right to copies as provided by law.

2.6 MUTUAL CONFIDENTIALITY & NON-DISCLOSURE

The parties agree that the specific financial terms of this settlement (the "Financial Terms") shall be kept confidential. Maker shall not disclose the discount rate or specific payment structures to third parties, except as required for tax purposes or legal counsel. Hospital shall maintain the confidentiality of Maker’s health information in accordance with Federal law.

2.7 REPRESENTATIONS & WARRANTIES

Maker represents and warrants that: (i) they have the legal capacity to execute this Note; (ii) the execution of this Note does not violate any other agreement to which they are a party; and (iii) they have had the opportunity to review this Note with independent legal counsel.

2.8 LIMITATION OF LIABILITY & INDEMNIFICATION

Maker agrees to indemnify and hold Hospital harmless from any costs, including reasonable attorney’s fees, arising from Maker’s breach of this Note. To the extent permitted by law, the Hospital’s liability for any administrative errors in the processing of this Note is limited to the correction of the error and the waiver of any interest resulting therefrom.

2.9 DISPUTE RESOLUTION & ARBITRATION

Any dispute arising out of or relating to this Note shall be resolved through binding arbitration in [Insert County/City] under the rules of the American Arbitration Association (AAA). The parties waive their right to a jury trial or to participate in a class action.

2.10 GOVERNING LAW & JURISDICTION

This Note shall be governed by and construed in accordance with the laws of the State/Province of [Insert State/Province], without regard to conflict of law principles.

2.11 MISCELLANEOUS PROVISIONS

• Severability: If any provision is held unenforceable, the remainder of the Note remains in effect.
• Entire Agreement: This Note constitutes the entire agreement between the parties regarding the debt and supersedes all prior oral or written agreements.
• Amendments: This Note may only be amended via a written instrument signed by both parties.
• Successors and Assigns: Hospital may assign its rights under this Note to a third-party collection agency or financial institution without the consent of Maker.

---

3. EXECUTION & FORMAL SIGNATURE BLOCKS

IN WITNESS WHEREOF, the Parties have executed this Promissory Note as of the Effective Date.

FOR [HOSPITAL/PAYEE NAME]:

Signature: _____________________________________
Printed Name: [Authorized Signatory Name]
Title: [e.g., Director of Patient Financial Services]
Company: [Hospital Legal Name]
Date: [Date]

FOR [MAKER / PATIENT / GUARANTOR]:

Signature: _____________________________________
Printed Name: [Maker Full Legal Name]
Title: [Maker/Guarantor]
Date: [Date]

---

4. STEP-BY-STEP EXECUTION & FILING GUIDE

To ensure this Promissory Note is legally enforceable and properly integrated into your hospital's revenue cycle management (RCM) system, follow these steps:

1. Field Completion:
   • Open the document in Microsoft Word or Google Docs.
   • Use the [Bracketed] fields to input specific patient data, total debt amounts, and interest rates. Ensure the "Effective Date" matches the date of the patient's signature.
2. Verify Authority:
   • Ensure the Hospital signatory has the internal "Delegation of Authority" to bind the institution to financial settlements.
   • Confirm the Maker is the legal patient or a legal guardian/guarantor with the capacity to contract.
3. Interest Rate Audit:
   • Verify that the interest rate inserted in Section 2.2 does not exceed the usury laws of your specific state. (e.g., California and Florida have strict caps on non-consumer and consumer debt interest).
4. Execution (Digital or Physical):
   • Digital: Upload the finalized PDF to DocuSign or Adobe Sign. Map the signature, date, and printed name fields. Ensure "Audit Trail" is enabled to prove the IP address and timestamp of the signature.
   • Physical: Print two copies. Both parties sign both copies. Provide one original to the Maker and retain one original for the Hospital’s permanent records.
5. Filing & Retention:
   • Store the executed Note in the Patient’s Financial File (separate from the Clinical Record to maintain HIPAA segregation where possible).
   • Retain the document for the duration of the repayment term plus the statute of limitations for written contracts in your jurisdiction (typically 4–10 years).
6. Accounting Integration:
   • Update the hospital's ERP/Accounting software (e.g., Epic, Cerner, or Oracle Netsuite) to reflect the transition from "Accounts Receivable" to "Notes Receivable."