Is It Time To Revisit Physician Unions?

The Patient Protection and Affordable Care Act (PPACA) isn’t quite one year old but has already had far reaching effects while generating visceral responses from all involved.  For those who were added to the roles of covered individuals..a sigh of relief.  For just about everyone else..retching, headaches, fear and loathing.  From insurance providers and employers to hospitals and physicians, the expectation of the implementation of the PPACA is being met with the same reservation and feeling of doom as I had when my mother would say “Just wait till your father gets home”.

One response on the part of hospitals and physicians has been the purchase of practices by hospitals, essentially turning the physicians into employees.  The benefits to hospitals are a steady group of physicians referring patients to the hospitals’ inpatient and outpatient facilities, control over certain physician activities, collection of physician related fees and collecting the savings for reduced  overhead expenses.  The benefits to physicians are a steady, pre-established salary, bonuses that can be paid without regard to Stark regulations and limited management of day to day office activities and staff.  An additional benefit to these physicians is the ability to collectively bargain with their employer.  That’s right, a union!

The National Labor Relations Act was enacted in 1935 at the same time that the Federal Labor Relations Board was formed.   The Act was designed to “protect the rights of employees and employers, to encourage collective bargaining, and to curtail certain private sector labor and management practices, which can harm the general welfare of workers, businesses and the U.S. economy”.  Several groups of workers were excluded from the Act’s protection, including independent contractors, federal employees, domestic servants and agricultural workers to name a few. Implied, but not specifically stated, were physicians also. The Civil Service Reform Act was enacted in 1978 to cover previously exempted federal employees, giving them the right to collectively bargain with the United States Government.

Physician unions are not new and have been in existence for many years. Their numbers peaked around 1974, with an estimated total membership of 55K.  That was a time when physicians were seeking specific relief from malpractice liability cost increases, relief from government regulation and talk of nationalized health care.  Those numbers have drifted downward but remain steady at about 40K.  The main reasons cited for lack of interest in unions is that currently they can’t be used as collective bargaining units for reimbursement.  Physicians are also afraid to join for fear of bringing the wrath of the federal government down upon them.  An article on the history of physician unions and recent legal developments is here.

An interesting article comparing the issues currently affecting the state employees in Wisconsin and the author’s father, who is a physician, is here. I agree. Physicians are as much a group that should be allowed to unionize as much as any other health related personnel. If we take the definition of an employee vs an independent contractor and apply the test to the current physician/Medicare relationship, the waters appear to be a little muddy on the subject, in the physician’s favor.

Medicare requires a contract to participate. Medicare requires the physician to obtain and supply them with an NPI (National Provider Identification number) before an application of participation will even be considered. Medicare requires the physician to supply banking information for remittance of electronic payments (checks will not be issued). Medicare sets its fee schedule and tells physicians what they will pay; there is no negotiation possible. Medicare sets specific guidelines for documentation of physician/patient encounters to justify certain levels of charges submitted to them; no exception and if incorrect, the penalty for each offense is a $5,000 fine and up to ten years in jail.  All of these items, plus many more, are requirements and NONE are negotiable.

“An employer has the right to control an employee.” Since physicians are “hired” by Medicare to see and treat Medicare patients for a fixed fee (fee schedule-non-negotiable), “the right to direct and control the workers” (Medicare dictates how documentation is to be done, how charges are to be submitted, how remittance will be made and penalties to be levied if not done correctly), … but also as to the details, manner and means by which the results were accomplished. ” Another factor to be considered is the term and duration of the relationship between the company and the workers. The relationship of an independent contractor generally contemplates the completion of an agreed service and result within a stipulated period of time. On the other hand, an employment relationship generally contemplates a continuous rendering of services for an indefinite time” (Medicare “agreements” are yearly and automatically renewable unless terminated by either party in writing).

Since the majority of physicians, in most communities, rely on Medicare as the single largest payer in any given market, most physicians or practices could not survive without participating with Medicare. And with the implementation of the PPACA, more of our income will be dependent upon government sponsored programs.  Under these circumstances, physicians have little choice except to continue working with Medicare. It would only seem fair if we could at least negotiate like any other group with our employer.

Hey NLRB, you can’t have your cake and eat it too.

Doc B

My opinion is free.

Advice is worth exactly what you pay for it.

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