Reservist sues after hospital calls in loan

Military law may not adequately protect the Kentucky physician because he is an independent contractor.

By — Posted March 6, 2006

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The Army called up Col. Bedford Boylston, MD, a thoracic surgeon and reservist, in January 2005. He immediately informed Our Lady of Bellefonte Hospital, where he had privileges, that he would have to close his practice in Ashland, Ky.

The hospital claimed that by closing his practice, Dr. Boylston breached his recruitment agreement and owed the hospital the $500,000 loan that brought him to Kentucky from Pennsylvania, court documents show.

Soon after returning from serving his country, Dr. Boylston in January sued the hospital. He filed the lawsuit in response to a letter he received last year stating that he owed Our Lady of Bellefonte the money.

Dr. Boylston alleges that the hospital is violating the federal Servicemen's Civil Relief Act by requiring him to repay the loan. If the hospital is successful in this case, it might set an example that "could have a chilling effect on surgeons getting involved in military service, and on the other hand, affect the recruitment policies of hospitals," said David O. Welch, Dr. Boylston's attorney.

The hospital denies the allegations.

Although military legal experts could not comment directly on Dr. Boylston's case, they say that because doctors are often self-employed or independent contractors, the law might not afford them all of the same protections as other business employees.

A question of how the law applies

Our Lady of Bellefonte recruited Dr. Boylston in March 2003 to set up a practice for vascular and thoracic surgery and to treat patients at the hospital. It gave him a $500,000 loan that was to be paid off over three years, with the first payment slated for April 1, 2005.

The military called up Dr. Boylston a few months before he was to start repaying the loan. According to Dr. Boylston's complaint, the hospital indicated to him in a letter that if he followed his orders, he would breach his hospital contract.

But Dr. Boylston says he complied with the contract by providing his services to the hospital, and that he was "legally obligated to provide services to the United States of America," according to the lawsuit, filed in the U.S. District Court for the Eastern District of Kentucky.

"The doctor entered into the contract in good faith," Welch said, explaining that the SCRA entitles Dr. Boylston to damages for not being able to practice, and it restricts Our Lady of Bellefonte from suing him for allegedly breaking his contract.

The hospital's attorneys declined to comment on the pending litigation. But the hospital has not sued Dr. Boylston for breaking the contract. Instead, it filed a third-party complaint against Dr. Boylston's professional service corporation to recover the loan.

Hospital denies charges

In its response to Dr. Boylston's complaint, Our Lady of Bellefonte denies the doctor's allegations and states that it is in full compliance with the federal law.

The hospital alleges that by closing his practice, Dr. Boylston broke the agreement and "did not indicate to OLBH that he would return to the Commonwealth of Kentucky."

According to Welch, Dr. Boylston intended to have the option of returning to his job if the hospital had no one else to replace him; however, it was not discussed.

Military experts said they could not comment on the legal merits of Dr. Boylston's case. But they were familiar with the law's application in a general sense.

While the SCRA recognizes the hardship on employees who are pulled away from their jobs to serve, "it does not protect against every eventuality that may come about," said Major Dylan Seitz, a staff judge advocate for the Kentucky National Guard.

The act was intended to help soldiers mitigate some of the costs associated with leaving for duty but does not apply to private contracts, he said. Although it allows for a temporary suspension of civil proceedings, it is not intended to resolve employment disputes, Seitz said.

Employment issues fall under the Uniformed Services Employment and Reemployment Rights Act, according to David Orange, executive director of the Employer Support for the Guard and Reserve in Kentucky, which serves as a liaison in employment disputes. Orange assisted Dr. Boylston when he came into the agency for advice on whether he was protected by USERRA.

Dr. Boylston did not qualify for USERRA protection because he was an independent contractor and not an employee of the hospital, Orange explained.

Otherwise, "he did what he was supposed to do," in giving proper notification, he added.

Stressing the need to be prepared

Dr. Boylston's case points to the urgency for reservist doctors to be prepared in case they called away, physicians and military professionals say.

"Call-ups occur more frequently these days, and when they do, all matters -- your practice, your family -- need to be looked after," said retired Maj. Gen. George K. Anderson, MD, executive director of the Assn. of Military Surgeons of the United States.

He said doctors should seek military advice long before they are called up so that they understand the law and to determine the best practices to maintain their businesses while away.

Seitz and Orange recommend that reservist physicians get an attorney involved early when signing any employment contract to ensure that there is no question about who is responsible for damages if they are called to duty.

"Doctors know that the day can come, and, if they haven't done their homework, they may not know what they're coming home to," Orange warned.

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Case at a glance

Bedford Boylston, MD, v. Our Lady of Bellefonte Hospital Inc.

Venue: U.S. District Court for the Eastern District of Kentucky
At issue: Whether the Servicemen's Civil Relief Act protects a doctor from having to repay a loan after he had to close his practice because he was called up for military service.
Potential impact: The physician says fewer doctors will be willing to serve as reservists if he is forced to repay the loan.

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