Firing hinges on employed doctor's medical judgment

Physicians should take proactive steps before signing an employment contract with a hospital to protect their rights to make decisions on how to treat patients.

By — Posted Feb. 4, 2013.

Print  |   Email  |   Respond  |   Reprints  |   Like Facebook  |   Share Twitter  |   Tweet Linkedin

When a nurse approached emergency physician Robin Borchardt, MD, complaining of abdominal pain, the physician thought nothing of referring her for outpatient care. Dr. Borchardt, then president of the medical staff at Saint Anthony Medical Center in Rockford, Ill.,was the employee health physician and routinely treated staff members.

The nurse's condition was not serious, and she expressed discomfort at being admitted to the emergency department where she knew staff, Dr. Borchardt said. He wrote an order for the nurse to have an outpatient CT scan, which was performed successfully.

But weeks later, Dr. Borchardt received a letter terminating his employment at the medical center. The note stated that Dr. Borchardt's failure to register the nurse in the emergency department and chart her condition constituted misconduct, according to court documents.

Dr. Borchardt said he used his best medical judgment in treating the nurse. No official hospital policy mandated that all patients be admitted to the emergency department, he said.

“I was very surprised [at the termination]. I didn't expect it to happen,” Dr. Borchardt said. “There was a lot of confusion and then, of course, anger.”

Dr. Borchardt is now suing OSF Healthcare System, which operates Saint Anthony Medical Center, for breach of contract and violation of the Illinois Hospital Licensing Act. The law effectively prohibits hospitals from interfering with an employed physician's execution of his or her professional judgment in a manner that “adversely affects the employed physician's ability to provide quality care to patients.”

Under the law, a physician is entitled to an independent review if the doctor believes an employer violated provisions of the act. The lawsuit, filed in June 2012 at the Circuit Court for the 17th Judicial Circuit in Winnebago County, claims that the medical center denied Dr. Borchardt's request for such a review before his Dec. 29, 2011, termination. Dr. Borchardt, now working as medical director for an orthopedics group in Rockford, is seeking reinstatement at OSF, plus back wages and benefits.

The case highlights the conflicts that can arise for physicians employed at hospitals. American Hospital Assn. data show that hospitals directly employed about 20% of practicing physicians in 2011, while other surveys have found about half of doctors working in an employed situation rather than owning their own practices. Those numbers are expected to rise as increasing financial pressures drive more physicians to larger medical groups and hospitals.

The Affordable Care Act also is prompting more doctors to consider hospital employment as a way to more easily participate in new health system delivery models such as accountable care organizations.

Legal and medical experts say doctors should take proactive steps before joining a hospital to avoid conflicts and protect their independent medical judgment.

Physicians “need to be able to make autonomous decisions that are clinically relevant and scientifically substantiated,” said Michael Carius, MD, past president of the American College of Emergency Physicians and chair of the Dept. of Emergency Medicine at Norwalk Hospital in Connecticut. “Ethical decisions are not always popular decisions. If that [decision] is found not to be in favor of the institution, there has to be a process that allows for that physician to be heard prior to any sort of employment change.”

Test of licensing act

Dr. Borchardt's case is believed to be the first charging a violation of the interference provision of the state's Hospital Licensing Act, said Joseph Wood, MD, Dr. Borchardt's attorney. The rule was added as an amendment to the act in 2001.

“To my knowledge, it's never been tested,” Dr. Wood said. “I hope [our case] sets a precedent for other physicians employed by hospitals, [showing] that they can't exercise control over your medical judgment or your ability to stand up for patients.” Dr. Borchardt said he believes the hospital encourages emergency department patient registrations to generate higher charges from their insurance.

At this article's deadline, OSF Healthcare System had not returned messages seeking comment.

In its court response, filed in October 2012, OSF denied violating the Illinois Hospital Licensing Act. The hospital did not elaborate on the reasons Dr. Borchardt was terminated except to say its termination letter “speaks for itself.” In the letter, the hospital says the firing was made in “keeping with the provisions” of the employee agreement. Specifically, it notes a provision that prohibits “any misconduct or intentional act by [a physician] constituting fraud, misappropriation, embezzlement, dishonesty or similar act, whether or not a punishable criminal offense, which is injurious to” the hospital.

“Your recent conduct in rendering medical services (including, but not limiting to, the ordering of a CT scan) to an individual who had not been properly registered as a patient, failing to chart that individual's condition … are acts or omissions that constitute a breach under” the agreement, the letter said. “You have been previously warned about the consequences of engaging in this and other types of similar behavior.”

The letter does not explain the details of this past conduct. Dr. Borchardt said he was reprimanded previously for failing to register his son as a patient when he visited the hospital for an x-ray and for allegedly spreading rumors during a second occasion. He denies spreading the rumors.

Dr. Wood said the medical center retroactively agreed to a hearing for Dr. Borchardt, despite his termination. That meeting is scheduled for March.

The Illinois State Medical Society is aware of Dr. Borchardt's case but is not involved. The society does not comment on individual legal cases. The ISMS has backed several amendments to the licensing act that have strengthened protections for hospital-employed doctors. These include a provision that physicians have the right to a hearing when privileges are terminated.

“These important protections provide physicians both procedural and substantive due process, ensuring a fair and equitable credentialing process,” William N. Werner, MD, ISMS president, said in a statement.

The Illinois law is in line with other states that allow hospitals to directly employ physicians. For example, Texas Gov. Rick Perry signed a law in 2011 enabling critical access hospitals, sole community hospitals and hospitals in counties of 50,000 or fewer to employ physicians. The law includes a provision that employed physicians retain independent medical judgment in providing care to patients and says doctors may not be disciplined for reasonably advocating for patient care. State regulations and attorney general opinions in Indiana, Louisiana, New Mexico and Tennessee have similar language that protects hospital-employed physicians.

Experts: Review contract closely

When joining a hospital, doctors should review their employee contracts carefully to ensure that their rights as physicians are clearly defined, said Jerry Kennett, MD, chair of the American College of Cardiology's advocacy steering committee. The ACC released a survey in September 2012 showing that the percentage of cardiology practices owned by hospitals has tripled in five years, and nearly as many cardiologists work for hospitals as they do for themselves or other doctors.

“It's important for physicians to seek out legal advice before they sign a contract,” he said.

The American Medical Association House of Delegates in 2012 adopted principles on physician employment pertaining to conflicts of interest to help guide doctors. The principles say employed physicians should be free to exercise their personal and professional judgment in voting, speaking and advocating on any matter regarding patient care interests, the profession, health care in the community and the independent exercise of medical judgment.

Employed doctors should not be deemed in breach of their employment agreements or be retaliated against by their employers for asserting these interests, the principals said. In addition, “doctors should always make treatment and referral decisions based on the best interests of their patients.”

If physicians run into situations in which they feel their medical judgment is being compromised, they can turn to professional medical associations or ethical committees within the hospitals for help, Dr. Kennett said. Dr. Carius adds that the exercise of proper medical judgment is a strong defense against unreasonable hospital polices.

“I think that hospital policies can't always be defended,” he said. “It's important for every physician to exercise their independent, ethical, clinical and professional judgment, regardless of hospital policy, because that can always be defended.”

With more younger doctors moving toward hospital employment, it's essential that medical students consider such conflicts of interest during their training and explore how they will best respond, said Jesse M. Ehrenfeld, MD, an associate professor at Vanderbilt University School of Medicine in Nashville, Tenn., and a member of the AMA Young Physicians Section. Above all, patient care should come first, he said.

It's important “to recognize that conflict exists, acknowledge the conflict and try to make a reasonable effort to resolve it,” he said. “At the end of the day, most physicians want to do the right thing.”

Back to top

External links

“AMA Principles for Physician Employment,” adopted November 2012 at the American Medical Association Interim Meeting (link)

Back to top



Read story

Confronting bias against obese patients

Medical educators are starting to raise awareness about how weight-related stigma can impair patient-physician communication and the treatment of obesity. Read story

Read story


American Medical News is ceasing publication after 55 years of serving physicians by keeping them informed of their rapidly changing profession. Read story

Read story

Policing medical practice employees after work

Doctors can try to regulate staff actions outside the office, but they must watch what they try to stamp out and how they do it. Read story

Read story

Diabetes prevention: Set on a course for lifestyle change

The YMCA's evidence-based program is helping prediabetic patients eat right, get active and lose weight. Read story

Read story

Medicaid's muddled preventive care picture

The health system reform law promises no-cost coverage of a lengthy list of screenings and other prevention services, but some beneficiaries still might miss out. Read story

Read story

How to get tax breaks for your medical practice

Federal, state and local governments offer doctors incentives because practices are recognized as economic engines. But physicians must know how and where to find them. Read story

Read story

Advance pay ACOs: A down payment on Medicare's future

Accountable care organizations that pay doctors up-front bring practice improvements, but it's unclear yet if program actuaries will see a return on investment. Read story

Read story

Physician liability: Your team, your legal risk

When health care team members drop the ball, it's often doctors who end up in court. How can physicians improve such care and avoid risks? Read story

  • Stay informed
  • Twitter
  • Facebook
  • RSS
  • LinkedIn