We continue with our series of articles penned by one attorney, an MD, JD, giving you a view of the world through a malpractice plaintiff attorney’s eyes. In this article, the author addresses “Can Doctors Form a Union”. This attorney is a seasoned veteran.  The series includes a number of pearls on how to stay out of harm’s way. While I do not necessarily agree with 100% of the details of every article, I think the messages are salient, on target, and fully relevant.  Please give us your feedback – and let us know if you find the series helpful.

Can doctors form a union? Not a civil union. But a legal entity to “collectively bargain.”

Doctors are a ferociously independent lot – the proverbial unherdable cats – but as financial and regulatory pressures mount –  this question is increasingly asked: Can we form a union to level the playing field?

There is certainly strength in numbers, a strength on which collective bargaining is based.

However, doctors are different than typical union members because doctors include independent entrepreneurs, physicians in training, AND employees.

A union cannot include all of these categories. For example, a union doesn’t ordinarily include a salaried car designer as it does for a salaried factory line worker in an auto plant. If these individuals are part of a union, they are part of different unions.

Let’s look at the various types of physician work situations to see how they fare regarding the possibility of unionization.


1. Independent private practitioners.


When independent physicians (who typically compete with each other) decide to join together to set fees and negotiate with payors, this looks like collusion to the government. When a group of independent physicians stage a boycott of a payor that rejects their fee schedule, it may look like tough collective bargaining to the doctors, but it looks like price-fixing to the government.

The salient issue vis a vis unionization is at what point is concerted activity not impermissible collusion (and immune to anti-trust laws).

Over time, this legal test evolved: is the effect of the union, on balance, to restrain trade (subject to anti-trust regulation) or to effectuate labor-management relations (not just exempt from anti-trust regulation but actually protected by statute)?

Doctors attempting to organize are fully subject to this analysis because the “learned professions” such as medicine and law are subject to anti-trust regulation to the same extent as any other providers of goods and services.

Under this analysis, trying to set up a minimum fee schedule would be an anti-trust violation.

The alternative then is to be a certified labor union and so enjoy the statutory exemption from anti-trust regulation afforded those organizations. However, unions are for employees, not for independent business owners like doctors in private practice.

Just calling an association of individuals who practice independently a “union” doesn’t make it one.

American Medical Association v. United States was a pivotal case on this issue. The government charged that the AMA, the Medical Society of Washington, D.C., and individual physicians had violated the Sherman Anti-Trust Act by colluding to coerce doctors (a) from accepting employment under Group Health (a government employee healthcare program); (b) from consulting with Group Health physicians; and (c) to persuade hospitals from caring for Group Health patients. The case reached the Supreme Court. The Court rejected the defendants’ claim that this was a labor dispute and so qualified as protected union activity. The Court noted that the AMA and its co-defendants were comprised of individual practitioners who were not, and did not want to be, employees.

These principles are still sound law.  An attempt by individual practitioners to form a collective bargaining group would likely fail on anti-trust grounds.

Unless your situation can actually meet the anti-trust Guidelines that the Federal Trade Commission (FTC) and the Department of Justice (DOJ) have promulgated, you can’t wear a doctor union cap. These guidelines require that physicians hoping to engage in joint negotiations must “have sufficiently integrated their practices such that they are no longer viewed strictly as competitors for this purpose.” Assume that any attempt to band together with your colleagues to press for common interests is going to be subject to anti-trust regulations.

The other alternative is a “messenger” system, which is permitted by the FTC and the DOJ. Here, an independent agent acts as a go-between. The agent corresponds with the payor and the Independent Provider Association separately. However, the messenger cannot bargain on behalf of the IPA. He’s just a messenger. And, as metaphorically articulated by Shakespeare, don’t kill the messenger.

A messenger may not do individually what the physicians cannot do collectively.  If it can, the government will look to “pierce the veil” of the messenger model.

An illustration: In a Florida case, an IPA consisted of competing general and vascular surgeons who made up the majority of surgical staff at five hospitals.  The IPA hired a consulting and accounting firm as its messenger.  The agent “informed” the payors that the physicians would terminate their contracts and refuse to participate in the plan networks unless their fee demands were accepted. The DOJ argued that the activities were, albeit delivered via a messenger, just garden variety illegal joint negotiations, using illegal threats of boycotts as a tool. The IPA settled.

Given the strong scrutiny that messenger systems receive and the limited scope of their activities, they have not gained wide usage.


2. Employee physicians


Physicians employed by a hospital or healthcare system CAN unionize as long as they are actual employees. Typically, this means being paid a salary reported on a W-2 form. Salaried doctors at public hospitals can also unionize.

This necessary status as an employee excludes supervisors. That detail has been repeatedly used (or abused) by hospital employers who do not want their physician staff to unionize.

The “supervisor” issue was at issue in a Washington State case. There, doctors at 46 primary care clinics voted to be represented by the United Salaried Physicians and Dentists Union.  Their employer, Medalia Healthcare, argued to the National Labor Relations Board (NLRB) that the doctors were “supervisors” because they were clinic administrators or served on management committees. The NLRB sided with the doctors, concluding they could organize. The reason: they did not have authority to hire, fire or make managerial decisions. Under the National Labor Relations Act, these characteristics defined a “supervisor”. This standard has been upheld in subsequent cases, including in Arizona and New York.

Attempts to shoehorn private practitioners as “employees” by  arguing “de facto employment” have failed.

In United Food and Commercial Workers v. AmeriHealth Corp, a blue collar union wanted to represent 450 New Jersey physicians in negotiations with their HMO. The union argued the HMO imposed so many conditions on the practice of medicine and on the doctors themselves, that the doctors were reduced to being employees. However, the NLRB agreed with the HMO  that since the doctors made independent medical decisions, provided their own facilities and support staff, and could leave the HMO at any time, they were independent contractors and not eligible to unionize.


3. Physicians in training


Interns, residents and fellows are a special sub-set of salaried hospital-based physicians. Of course we knew that already.

In a 1999 case (Boston Medical Center) the NLRB held that interns, residents and fellows are employees subject to the national Labor Relations Act. This case involved a merger between a public hospital that had permitted its physicians in training to engage in collective bargaining and a private hospital that opposed that.

The NLRB’s decision noted that post-graduate training is an essential part of medical education. But, it concluded house-staff qualify as employees because they work for the hospital and are paid for doing so. Unlike traditional students sitting primarily in classrooms learning didactically, interns, residents, and fellows spend most of their time engaged in patient care, often relatively independently.

The NLRB characterized them as “junior professional associates”, analogous to “apprentices in the traditional sense.” Accordingly, interns, residents and fellows are included in a broader category of employee physicians vis a vis the NLRB’s rules regarding appropriate bargaining units.

The issue reared its head again in a 2010 case that was firmly resolved in favor of continued employee status for physicians-in-training (St. Barnabas).  The Service Employees International Union filed a petition for an election among the house staff of St. Barnabas Hospital that was upheld by the NLRB.  The hospital appealed claiming that the house-staff were basically like teaching assistants. The NLRB rejected the appeal and reaffirmed Boston Medical Center and the employee status – and right to unionize – of interns, residents and fellows.

In summary: Physicians who are hospital employees (or collective employees of a different large organization) may unionize.   Physicians still in training now have an enforceable right to unionize under the National Labor Relations Act. Independent physicians who attempt to unionize will likely violate anti-trust laws.

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