NEW YORK – An appeals court ruling in New York may throw into question whether physicians with admitting privileges could be considered employees of the hospitals at which they have privileges.
The case, remanded back to a district court for further consideration, could play havoc with the traditional hospital-physician relationship, raising potential issues involving human resources, taxes and malpractice.
Regardless of the outcome, the case could serve as a reference case that could be mentioned in other filings, said Shaffin Datoo, employment lawyer with Venable LLP, a New York-based law firm.
Physicians with admitting privileges have been viewed as independent contractors in their relationships with hospitals because facilities don’t exert the degree of control over doctors that is typical with employees. Physicians with admitting privileges set their own hours, and the hospital does not pay them a salary. No court has ruled that an admitting physician is an employee, Datoo said.
But the U.S. Court of Appeals for the Second Circuit ruling suggests that such physicians may be considered employees under Title VII of the Civil Rights Act, which bars employers from discrimination.
The case is Salamon v. Our Lady of Victory Hospital, which was decided in late January by the appeals court. It returned the case to the district court, asking it to reconsider its original ruling that dismissed the physician’s complaint.
The doctor sued the hospital in 2006, contending that she had been sexually harrassed by the chief of the hospital’s gastroenterology department and then faced retaliation when she complained about his actions. She alleged that her complaints were not acted on and the hospital began a campaign to force her out.
While the appeals court noted that the physician theoretically has a degree of freedom as an independent contractor, the hospital also has substantial control over the physician, and these factors need to be considered in determining whether a physician is an employee.
For example, the physician in this case had to comply with hospital policies and supervision, participate in meetings and handle “on-call” shifts, both for her own and other physicians’ patients. She also was under the influence of the facility’s quality assurance department.
Hospital control over physicians is increasing, Datoo noted. Some suggest what drugs can be prescribed or what types of procedures should be done.
“At the end of the day, it matters who’s exercising more control,” he said. “This could be opening hospitals to a tremendous amount of liability and extend the reach of anti-discrimination statutes to physicians who have never been covered by them.”
If physicians are considered employees, “it’s more of a human resources nightmare,” he said. “A hospital may be liable for all the employment taxes that haven’t been paid. If an admitting physician harrasses a nurse, the hospital could now be liable for their actions, and it’s possible that a physician's malpractice liability also could flow to the hospital.”
The appeals court ruling could have wide implications. Even if the case is not eventually ruled in Salamon’s favor, Datoo said future cases involving admitting physicians may point to the appeals court ruling as a case to support their legal contentions.
The district court should reconsider the case and make a ruling within six months, Datoo predicted, adding that an appeal is likely no matter which way it rules.