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Physician Engagements: Who Do I Really Work For and Does it Matter?

by admin on September 11, 2019 No comments

By: Randy Goldberg, Co-Counsel

I am a successful physician who works for a thriving practice that is affiliated with a local hospital or Ambulatory Surgical Center (“ASC”).  The hospital/ASC was so impressed with my professionalism and skills that they retained me to perform certain additional duties and services for them.  Of course, they are paying me for my time and services.  This is great, I love my work, I am generating two sources of respectable income – all is good.

Not so fast!

As can sometimes be the case, all is good while there is smooth sailing and while the money is coming in.  However, once there is a bump in the road, a hiccup in a procedure, or a third party employee files a complaint with the Equal Employment Opportunity Commission (“EEOC”); the Florida Commission on Human Relations (“FCHR”); Department of Labor (“DOL”) or any federal or state agency complaining about some alleged incident in their workplace. Their filing of a lawsuit can be against you individually, against your practice or against the hospital/ASC.  Not to mention, a lawsuit can be filed by a patient or third party against the practice or the hospital/ASC.  Then what?

With more physicians taking on additional duties with affiliated hospitals/ASC, the question that often arises in these Complaints is, what role was the physician in when the issues raised in the Complaint occurred?  Was the physician acting in their capacity as a physician with the practice or as a Medical Director or Board member at the hospital/ASC?  This is an extremely important question and concern for not only the physician but for the practice and the hospital/ASC as well. There is no reason for a practice to have legal responsibility for a physician’s actions as a hospital board member, or for a hospital/ASC to be held responsible for the actions of the physician in their office.  A well-prepared engagement agreement will be significant in establishing the resolution to this question.

When a Complaint is made or filed, your immediate question is how does this affect me?  The immediate short answer is that it depends.  Depends on what?  As an attorney who routinely defends the above complaints and lawsuits (collectively referred to as “Complaints” for the purposes of this paper), one of the first things to do is determine who are the key people related to the Complaint and what is their relationship to the parties in the Complaint?  This may not include you at first but, depending on your actual or perceived role in the organizational structure of any of the entities, you may inadvertently have a role and certain responsibility for the events are at issue in the Complaint.

One of my first questions is, what is your specific role in the entities?  I would then ask to see a copy of your engagement agreement with the practice, the hospital/ASC, or any third party who may be related or even mentioned in the Complaint.  You may have noticed that I have not referred to an employment agreement or independent contractor agreement.  I have referred to these agreements collectively as Engagement Agreements.  The reason is that the issues discussed herein applies equally whether you are an employee or independent contractor.[1]

What does your engagement agreement state?  What are your specific duties, responsibilities, liabilities with the entity and with the entities’ relationships and now more importantly, in this Complaint?  Are you indemnified by the entity or do you need to indemnify them?  Do you need to get separate legal representation from the practice, from the hospital/ASC, and who is paying for your attorney, especially if your position is pled as being adversarial to the practice, hospital/ASC, and other individuals referenced in the Complaint?  Many times, a well pled lawsuit will portray people within an entity or relationship to be in an adversarial position to one another.  (The reason for this is a subject for another article.)

I have come across many cases of late where the physician does not have an engagement agreement with either their practice or their hospital/ASC, or the agreement that is in place is so poorly structured that the agreement can be more detrimental than having no agreement at all.  This makes it extremely difficult to effectively defend the position of the physician in many of these cases.  It is not impossible, but it is difficult and more importantly much more expensive to build the same defense that a physician would have if she/he would have taken the time to have a proper and detailed engagement agreement in place from the onset of their relationship.

I cannot stress the importance that all physician relationships be properly set forth and detailed in a proper written engagement agreement.  It protects everyone, the physician and the entities.  Aside from the healthcare regulatory compliance issues, which are not addressed herein, but from purely a business perspective, having a proper engagement agreements is paramount to your sanity and success.  I can tell you when issues such as those described herein arise, when there are properly prepared engagement agreements in place, not only is the defense of the Complaint simpler, but more importantly everyone knows where they legally stand.  This helps to keep the costs of defending the Complaint down, prevents unnecessary intra-relationship rivalries from developing (which will destroy personal and professional relationships), and will keep the overall legal costs down.

[1] It is important to remember that whether your agreement states “employee” or “contractor” they are subject to the interpretation of the current IRS and the DOL rules and regulations, which is determinative as to whether you are an employee or independent contractor.  These issues are not subject to this article.

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