Employers are desperate to amend contracts
Lacking a cause to take unilateral action, many employers are desperately trying to amend their physician contracts – the subject of the plaintive emails that employed physicians started receiving in mid-March.
“Doctors are trying to decide how they will react to these documents,” Mr. Claussen said. “If they don’t sign, they run the risk of being terminated.” He is expecting termination letters for some of these doctors to start coming in 2-3 weeks.
In response to these amendments, “doctors want to reach out to their employers and see if something can be negotiated,” he said. “Some employers have been amenable, but others have so far not been.”
Ms. Adler said the amendments typically offer open-ended arrangements favoring the employer. “The document might call for a temporary pay cut until the employer thinks they can restore the old salary, but it is up to the employer to decide when that would be,” she said.
Also, when the employer owes the physician for services already performed, the amendments don’t promise to pay them the full amount owed, she said.
Ms. Adler advises doctors to ask for a provision that restoration of their original salary will occur at a definite point in time, such as 30 days after the organization is back at previous volume. And if the doctor is owed money, the doctor should ask for full payment – and to sweeten that offer, allow the employer to pay the doctor back over a period, she says.
Just in the past month, employers have been pushing for several specific changes in doctors’ employment status. Here are some changes that Mr. Claussen and Ms. Adler have been seeing.
Withholding quarterly bonuses
In March, just before quarterly bonus payments were due, employed physicians started getting notices that they would not get the bonus, Mr. Claussen said. This covered work already done, and it amounted to a lot of money because practices were busy then.
“Not paying bonuses is a very big deal because they can make up to 50% of a physician’s total compensation,” Mr. Claussen said. He added that unilaterally withholding those funds, without a change in the contract, is legally questionable.
In addition to these changes on past bonuses, he said employers are now trying to temporarily end bonuses going forward through the contract amendments. “It’s not a good idea to sign this,” he said.
Doctors paid on pure production are left in the lurch
As volume falls, some hospitals and practices are shutting down doctors’ offices for all but emergencies, leaving their employed doctors with practically nothing to do. Doctors paid purely on their productivity are devastated by this change because their income virtually goes to zero, Mr. Claussen said.
He said 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, Mr. Claussen said. He has seen some employers try to shift more doctors into pure production through the amended contracts.
But Ms. Adler said 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 said.
In any case, both lawyers agreed that doctors on a pure production model are in an untenable situation right now. Ms. Adler said they are not earning money but are still technically at work, so they cannot collect unemployment compensation, which would give them some income.