Promissory Note Sample for Hospital

SECURED/UNSECURED PROMISSORY NOTE AND REPAYMENT AGREEMENT

DOCUMENT ID: PROMN-MED-2024-001
EFFECTIVE DATE: [Effective Date]
VERSION: 2.1 (Institutional Grade)
GOVERNING JURISDICTION: State of [State Name]

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1. STATUTORY & LEGAL COMPLIANCE NOTICE

NOTICE TO MAKER: This document is a legally binding instrument. It outlines the terms of a financial obligation arising from medical services rendered. This Note may be subject to federal and state consumer protection laws, including the Fair Debt Collection Practices Act (FDCPA) and the Health Insurance Portability and Accountability Act of 1996 (HIPAA). The Payee (Hospital) maintains clinical confidentiality; however, default on this Note may result in the limited disclosure of non-clinical, administrative data to third-party collection agencies or legal counsel as permitted by law. DO NOT SIGN THIS DOCUMENT WITHOUT READING IT IN ITS ENTIRETY.

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2. PARTIES & RECITALS

MAKER (Patient/Guarantor): [Patient/Guarantor Full Legal Name], residing at [Principal Address of Maker] ("Maker").
HOLDER / PAYEE (Hospital): [Hospital/Healthcare Entity Full Legal Name], a [Entity Type, e.g., Non-Profit Corporation] organized under the laws of [State], with its principal place of business at [Hospital Address] ("Payee").

RECITALS: WHEREAS, Maker (or Maker’s dependent) has received medical services, supplies, and/or hospital accommodations from Payee; and WHEREAS, an outstanding balance remains for said services as of the Effective Date; and WHEREAS, Maker desires to satisfy said obligation through a structured repayment plan; NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

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3. EXHAUSTIVE OPERATIVE CLAUSES

3.1. Promise to Pay and Principal Amount

For value received, Maker hereby unconditionally promises to pay to the order of Payee the principal sum of [Amount in USD, e.g., $10,000.00] (the "Principal"), together with any accrued interest and late fees as defined herein, in accordance with the terms set forth in this Note.

3.2. Scope of Services & Underlying Obligation

The Principal amount represent the "Scope of Services" provided to [Patient Name] during the period of [Start Date] to [End Date], specifically relating to [Brief Description of Medical Services, e.g., Inpatient Surgical Care/Emergency Services]. This Note serves as a formalization of the debt incurred and does not waive Payee's right to bill for additional services discovered or rendered post-execution of this Note.

3.3. Compensation, Interest, & Payment Terms

• Interest Rate: The Principal shall bear [Interest Rate, e.g., 0% or 5%] per annum, compounded monthly. (Note: If 0%, no interest shall accrue unless default occurs).
• Payment Schedule: Maker shall make payments in [Monthly/Bi-Weekly] installments of $[Installment Amount] commencing on [First Payment Date] and continuing on the same day of each subsequent period until the Principal and all accrued interest are paid in full.
• Maturity Date: The entire unpaid Principal and any accrued interest shall be due and payable in full no later than [Maturity Date].
• Application of Payments: Payments shall be applied first to any late fees, second to accrued interest, and third to the Principal balance.

3.4. Late Charges & Grace Period

In the event any payment is not received within [Number, e.g., 10] days of its due date, Maker shall pay a late fee equal to [Number, e.g., 5]% of the overdue installment or $[Amount], whichever is greater, subject to applicable state law limits.

3.5. Term & Termination (Default & Acceleration)

• Events of Default: Maker shall be in default if: (a) Maker fails to make any payment when due; (b) Maker files for bankruptcy; or (c) Maker breaches any representation or warranty herein.
• Cure Period: Upon a payment default, Payee shall provide Maker a written notice of default. Maker shall have [Number, e.g., 15] days to cure the default.
• Acceleration: If the default is not cured, Payee may, at its sole option, declare the entire remaining Principal and accrued interest immediately due and payable without further notice.

3.6. Intellectual Property & Proprietary Documentation

Maker acknowledges that all billing codes, clinical protocols, internal Hospital forms, and administrative processes utilized in the generation of the underlying medical debt are the exclusive Intellectual Property (IP) of Payee. Maker is granted no license to use, reproduce, or distribute Payee’s proprietary administrative materials for any purpose other than personal record-keeping or insurance verification.

3.7. Mutual Confidentiality & HIPAA Compliance

The parties agree to maintain the confidentiality of the terms of this Note. However, Maker expressly authorizes Payee to disclose the existence of this Note and the payment history hereunder to: (a) credit reporting agencies; (b) third-party debt collectors; and (c) legal counsel. Payee agrees to comply with HIPAA and the HITECH Act regarding the protection of Maker’s Protected Health Information (PHI).

3.8. Representations & Warranties

• Capacity: Maker represents and warrants that they have the legal capacity to execute this Note and that the obligation is valid and enforceable.
• Accuracy: Maker warrants that all financial information provided to Payee for the purpose of establishing this repayment plan is true and correct.

3.9. Limitation of Liability & Indemnification

• Limitation: Payee’s liability for any administrative error in the processing of this Note shall be limited to the correction of the error and the adjustment of interest/fees.
• Indemnification: Maker agrees to indemnify and hold Payee harmless from any costs, including reasonable attorney’s fees, incurred by Payee in enforcing the terms of this Note or defending against any claim arising from Maker’s breach of this Agreement.

3.10. Dispute Resolution & Arbitration

Any dispute arising out of or relating to this Note shall be resolved through binding arbitration in [City, State] in accordance with the rules of the American Arbitration Association. The prevailing party shall be entitled to recover its reasonable attorney's fees and costs.

3.11. Governing Law & Jurisdiction

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

3.12. Miscellaneous Provisions

• Severability: If any provision is held unenforceable, the remainder of the Note remains in effect.
• Entire Agreement: This document constitutes the entire agreement between the parties regarding the subject matter and supersedes all prior negotiations.
• Amendments: All amendments must be in writing and signed by both parties.
• Counterparts: This Note may be executed in counterparts and via electronic signature.

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4. EXECUTION & FORMAL SIGNATURE BLOCKS

FOR [HOSPITAL/PAYEE NAME]:

Signature: _____________________________________
Printed Name: [Authorized Signatory Name]
Title: [Title, e.g., Chief Financial Officer / Patient Accounts Manager]
Company: [Hospital Legal Name]
Date: [Date]

FOR [MAKER / PATIENT / GUARANTOR]:

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

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5. STEP-BY-STEP EXECUTION & FILING GUIDE

1. Preparation: Open this document in Microsoft Word or Google Docs. Use the Find and Replace function (Ctrl+H) to locate and replace all bracketed items (e.g., [Hospital Full Legal Name]) with the specific details of the transaction.
2. Verification of Capacity: Ensure the "Maker" is either the patient or the legally responsible guarantor (e.g., parent of a minor). If a guarantor, verify their identity via government-issued ID.
3. Usury Check: Verify that the interest rate entered in Section 3.3 does not exceed the maximum allowable interest rate for medical or consumer debt in the Governing Jurisdiction.
4. Digital Execution:
   • DocuSign/Adobe Sign: Upload the finalized PDF. Place signature, date, and name tags in the designated blocks.
   • Audit Trail: Ensure the digital signature platform generates a "Certificate of Completion" or "Audit Log" identifying the IP address and timestamp of the signatories.
5. Notarization (Optional but Recommended): For large principal amounts (exceeding $25,000), it is recommended to have the Maker’s signature notarized to prevent "denial of signature" defenses.
6. Record Retention:
   • Digital: Save a copy in the Patient’s Electronic Health Record (EHR) under the 'Financial/Administrative' tab.
   • Physical: Store the original wet-ink version (if applicable) in a fireproof safe.
7. Filing: Provide a fully executed copy to the Maker immediately upon signing for their records.