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During the early stages of the COVID-19 response, hospitals, practices, and healthcare systems were hurt financially when clinics were closed, and most elective surgeries were halted. One response was to cut the salaries paid to employees. Physicians weren’t immune to the reductions in pay, despite many being under contract.
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April 2021A September 2020 study by Medscape found that 62% of American doctors had experienced a cut in pay. One out of four responding physicians said the reduction was 50% or more (Kane L. Medscape U.S. and International Physicians’ COVID-19 Experience Report: Risk, Burnout, Loneliness Accessed March 3, 2021.).
“I’ve received too many calls concerning physician contracts during COVID,” said Dennis Hursh, JD, a physicians’ attorney in practice with Physician Agreements Health Law in Middletown, Penn. “The calls generally have the same underlying issue: ‘My employer cut my pay by X% and I don’t see anything in my contract that allows them to do that.’”
The question then becomes, what can you do to remedy the situation?
Navigating Physician Contracts
According to the physicians’ attorneys interviewed for this article, the answer often is that the physician is right: There’s no legal way for an employer to unilaterally reduce the income of a physician who is under contract. However, as with many things legal, this finding is the easy part. The decision then is what you can actually do about it.
“A law student might say that this is breach of the contract and you don’t need to agree with that breach,” said Hursh. “In the real world, however, many employers will just cut a physician’s pay anyway, and leave it to the physician how to react. This will be a personal decision that each physician will have to make based on their very specific situation.”
“There are no easy answers,” said Benjamin J. Mayer, JD, MBA, head of the Mayer Law Firm, LLC, in Highlands Ranch, Colo., who specializes in physician rights. “Your response to a unilateral cut is very contextual depending on what the contract says, the extent to which the employer violated the contract, the amount of money in play, and the importance to the physician of maintaining a good relationship with the employer.”
There are also personal criteria to consider. For example, what amount of loyalty to do you feel you owe your employer? If they have been good to you and you’re happy there, you may feel it’s in your best interest to repay that loyalty by waiving the breach. If not, or if you’re near the renewal period for your current contract, then trying to enforce the contract might be your best course of action.
Another variable to consider is the amount of money at stake. Lawyers are paid by billable hours or contingency fees, rather than set rates as physicians are. That means taking an employer into court can be an expensive and long-term project.