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Staffing Company, Hospitals Failed to Pay EPs

Sorelle, Ruth, MPH

doi: 10.1097/01.EEM.0000552780.37134.82
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Ms. SoRelle has been a medical and science writer for more than 40 years, previously at the University of Texas MD Anderson Cancer Center, the Houston Chronicle, and Baylor College of Medicine. She has received more than 60 awards, including the Texas Human Rights Foundation Award. She has been a contributor to EMN for more than 20 years.

Cate Pelletier, MD, well remembers the day it all fell apart. It was late October, and she said one of the chief officers of Roxborough Memorial Hospital called to offer her a contract with Prime Healthcare, the company that owned the hospital, if she would show up for her midnight shift. She said he promised that a contract at a higher rate of pay would be on her desk when she got to the hospital.

“When I got to work that night, there was no contract on my desk,” she said. When another physician offered the same deal came in the next morning, the two of them asked the administrator to come to the ED. He was angry and abrupt when he showed up, she said, telling them that he could not make a contract for Prime and that they shouldn't be “absurd.”

“‘You made a verbal contract with two physicians,’” she said she told him. “‘And after all that, you come down here after I've worked another eight hours for your institution and make it sound as though expecting to be paid is absurd. I'm done.’ I resigned at that moment.”

Many of the 50 or so emergency physicians and physician assistants at Roxborough in Philadelphia, Lower Bucks Hospital in Bristol, PA, and Suburban Community Hospital in East Norriton, PA, have found themselves in the same situation since late October. That's when they said they were told that Legacy Physician Partners, the Brentwood, TN, staffing agency that held their contracts, was bankrupt. Less than three days later, they said, they were told that was not true and that Prime, Progressive Emergency Physicians (PEP, another management firm), and Legacy, led by CEO Donald Bivacca, were negotiating to transition the ED contract to PEP. The physicians were independent contractors with Legacy, which had held the Prime contract in the beginning of the year. Legacy provided malpractice coverage as part of their employment, they said.

Gerald O'Malley, DO, one of the contracted emergency physicians, said the physicians believed the Legacy contract would continue until February 2019, but instead they received an email saying the hospitals had contracted with PEP, a group in Uniondale, NY. “So Prime Healthcare had a contract with Progressive to staff all three emergency rooms beginning in February 2019,” he said. “But in late October, we get an email saying that Legacy had just declared bankruptcy.” (A search of federal bankruptcy filings yielded no information on it.)

Three days after that, they received another email saying Legacy had not filed for bankruptcy. Its website, however, has been taken down and its management could not be reached.

The immediate concern was whether the physicians had malpractice coverage, Dr. O'Malley said. “People were showing up for shifts and being told they didn't have malpractice insurance,” he said. “Subsequent to that, we received a bunch of emails that reassured us that we did have malpractice insurance and we would be paid, but we needed to show up for shifts. Many of us did,” he said.

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Tens of Thousands Owed

Lower Bucks, where Dr. O'Malley worked, has only one physician in the hospital at night, meaning that the emergency physician covering the ED has to intubate and restart central lines for inpatients and teach interns and residents, he said.

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The hospital encouraged the physicians to sign on with PEP, Dr. O'Malley said, but he and his colleagues discovered that they would have to take a 20 percent pay cut and work 12-hour shifts instead of their customary eight hours. “They told us, ‘If you do that, then depending on how many shifts you agree to work for us and after six to eight weeks when things settle down and we have a fully staffed department, we will look into getting you your back pay and providing a tail for your malpractice insurance.” The physicians would also have to agree to be employees of PEP, Dr. O'Malley said.

None of those terms was acceptable, Dr. O'Malley said, so he and some of his colleagues appealed to Ruben Garza, then the CEO of the hospital. Mr. Garza said PEP's attitude surprised him and that PEP had promised to take the problem of people who had not been paid “off your hands.”

At that point, the physicians had not been paid for at least a month, Dr. O'Malley said, and some had not been paid for longer. He estimated that he was owed $20,000, and Dr. Pelletier said she was out $30,000, including the loss of income because she couldn't work while waiting to be credentialed elsewhere. Dr. O'Malley said Mr. Garza also assured them that Prime would pay the tail coverage for their malpractice insurance because it was risky for the hospital if they were without coverage. Dr. O'Malley said he and some colleagues have retained an attorney to recoup the money owed to them.

Joseph Matula, DO, another of the contracted physicians, said the lack of transparency created problems. “It is pretty clear that they knew what was going on all along,” he said. “They had no intention of paying us. I don't think Legacy could. These contracts [from PEP] are not fair.” He said he had worked at another Prime hospital in Ohio, and a similar transition was clear, transparent, and fair when the previous contract ended. The doctors there received back pay owed to them when the new company took over.

“I'm so annoyed and frustrated,” Dr. Matula said. “I've been practicing 29 years and never experienced anything close to this.”

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Job Hunting

Some physicians could not continue without pay and agreed to the PEP terms, Dr. O'Malley said. Those who did not sign the new contract now find themselves needing to apply for new jobs and go through the long credentialing process at other hospitals. They still have not been paid for the shifts they worked, several said. Dr. O'Malley said he is worried that the emergency department is now being understaffed, creating risk for the hospital, physicians, and patients. He said the hospital is bringing in physicians from Allentown and Scranton and getting them emergency privileges in 90 minutes.

The leadership at PEP and Legacy did not respond to multiple requests from EMN for interviews. Anamaria Bearden, a spokesperson for Prime, declined to answer questions and provided only an emailed response: “In Pennsylvania, we contract with an emergency services group to provide physician coverage in our emergency departments. Legacy was the direct employer of the physicians contracted to work within our [Pennsylvania] emergency departments through November 12. Effective November 13, a new medical group began providing care in our ERs. Our ERs have remained open throughout the transition.

“We acted quickly to onboard a new medical group, ensuring that emergency medical services could continue to be provided at the emergency departments within Lower Bucks Hospital, Roxborough Memorial Hospital, and Suburban Community Hospital. Prime Healthcare trusted Legacy as a longstanding partner to fulfill their obligation to their employed physicians. Prime Healthcare paid Legacy for physician services provided within the hospitals. The contract with Legacy was terminated when it became clear that Legacy was not able to continue full coverage of our ERs.”

Ms. Bearden said she realized “there are unanswered questions. Unfortunately, Legacy is the only partner that can respond to the majority of those questions.”

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