COVID-19: Employers Cut Doc Pay and Bonuses: What’s Your Recourse?
He says office shutdowns are particularly common for specialists, because hospitals have been stopping elective procedures during the pandemic, but they can also happen in primary care, which has seen steep declines in patient volume, too.
Having doctors on pure production means that employers can keep doctors hired without having to pay them, Claussen says. He has seen some employers try to shift more doctors into pure production through the amended contracts.
But Adler says having doctors on pure production is actually disadvantageous for employers in the current climate. The employer may end up being owed money because of advance payments they have already made to these doctors, she says.
In any case, both lawyers agree that doctors on a pure production model are in an untenable situation right now. Adler says they are not earning money but are still technically at work, so they cannot collect unemployment compensation, which would give them some income.
Forcing Doctors to Use Paid Time Off
To provide some pay for doctors who have no volume, many employers are forcing these doctors to use up their PTO days, which typically amount to about 4 weeks, Claussen says. “These doctors have no choice in the matter,” he said.
Furthermore, while on PTO, they are being required to take call. Employers are still obligated to cover call, and there may not be enough doctors still working to fill the call schedule. But making doctors do this work on their time off may be a violation of the contract, Claussen says.
Terminating Physicians
Doctors who have little to do are often put on furlough. This means they don’t get paid but they keep their benefits, Adler says. The next step, she says, is to lay them off, with the stated intention of rehiring them.
Once laid off, she says, they can get unemployment payments. “Unemployment payments may not be anywhere near what they were earning before, but they are better than not earning anything,” Adler said.
In some cases, employers are just terminating them and are offering no prospect of rehiring them, she says. Adler says terminations can be a big problem for doctors. Physicians might have to repay a signing bonus, or they might lose their malpractice coverage, forcing them to buy a tail. They could also be subject to a noncompete clause, which would not allow them to practice in the area, she says.
Terminating without cause typically requires 60 to 90 days’ notice, which both sides might use to negotiate some changes in the contract. But Adler says some employers are firing doctors with cause, and are using legally questionable reasons to do so.
“In most cases, these employers are grasping at straws,” she said. As a result, she expects many fired doctors will file wrongful termination lawsuits. She thinks employers are better advised to negotiate with the physicians.
Delaying Start Dates for New Physicians
Typically, graduating residents and fellows signed with their new employers months ago and are ready to start working on July 1. But some employers are pushing back the start date for several months, Claussen says.
Claussen has been helping several clients in this situation. He says these delays are often a clear violation of the employment contract. Most contracts require an amendment to change the start date, he says.
Claussen says some employers have agreed to a new start date in an amended contract, giving the new physicians a solid date to work with. Not having work can be a real problem for graduating residents, who typically have to start paying off loans.
Now Physicians Won’t Become a New Partner
Claussen says physicians who are up for becoming partner are now being told that the deal is off. With less money coming in, existing partners are not willing to share it with a new partner, and there is no work for a new partner.
“The promise to make them partner is usually a verbal promise, so it is much less likely to be a breach of contract,” he said. “It is frustrating for physicians who were expecting to become partner.”
Claussen says physicians who are up for becoming partner are now being told that the deal is off. With less money coming in, existing partners are not willing to share it with a new partner, and there is no work for a new partner.
“The promise to make them partner is usually a verbal promise, so it is much less likely to be a breach of contract,” he said. “It is frustrating for physicians who were expecting to become partner.”
What Can Physicians Do?
When employers present changes to them, physicians often feel their hands are tied, Adler says. In these dangerous times, they are expected to make sacrifices to keep the organization from going out of business.
Even if they wanted to file suits against their employer, “they can’t go to court right now, because the courts are closed,” Adler says. “Employers are banking on doctors not doing anything.”
In most cases, however, doctors don’t have to act right away, she says. “Just because you have not reacted to the new situation does not mean you accepted it,” she said. “You can wait months, even years to file a lawsuit, depending on the state and the cause of action.”
Adler recommends that doctors make it clear that they don’t agree with the changes. An attorney experienced in physician contracts can review the changes being made and the amended contracts being offered.
Thank to recent federal changes, employers have to have some ways to continue paying physicians, Adler says. Medical practices with fewer than 500 employees can get loans from the federal government that would not have to be repaid if they met certain stipulations, such as hiring back all the employees they terminate, she says.
Claussen says physicians should resist the obvious dangers, such as a shift to a pure production salary, denying bonus payments for work already done, and forcing physicians you use up PTO days.
He also suggests persuading employers to postpone rather than eliminate payments. “Some employers have agreed to postpone payments until a date later in 2020 rather than eliminate them,” he said. “The aim is that the organization will be back on its feet at that time.”
Claussen says he is trying to limit the contract amendments to 1 or 2 months. Because the situation caused by the pandemic is so fluid, “this allows for flexibility,” he said. “We can revisit the situation and come up with different changes.”
Adler doubts employers would accept short-term changes with a definite end date, because such changes would not be in the employer’s interest. But Claussen says one employer has agreed to reevaluate its contracts in June.
Both lawyers agree that many employers are trying to work with their physicians. “In 90% of the cases I have seen, both sides cooperate,” Adler said. “Because of the situation, people are being much more conciliatory than they would have been.”
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