Doctors at 3 Philly-area hospitals are pushing back after working for weeks without pay

For Gerald O’Malley and 56 of the doctors and physician assistants he calls his colleagues, their current crusade against Prime Healthcare is principally about principles.

The safety of patients at the three Philadelphia-area hospitals run by the health system, for one. And the issue of being shorted about six weeks of pay each for working in those hospitals, an amount O’Malley personally estimates at $20,000.

“In my line of work, people’s lives are at risk, but I don’t care who you are: a plumber, a doctor, or someone at Wawa," O’Malley said. “If you work for a company that says, ‘We’re not going to pay for you those six weeks, unless you agree to work for another company at 20 percent less salary,’ I think any reasonable person would say that’s not fair."

The nearly 60 emergency-room staffers at Lower Bucks, Roxborough Memorial, and Suburban Community Hospitals have banded together after Prime unexpectedly terminated its contract with Legacy Physician Partners, a third-party staffing company it had hired to fill the ERs at the small community hospitals. Now, they’re mulling legal action to recoup their lost wages, as well as to rail against Legacy’s replacement, a firm that they contend is using “predatory tactics” to force them to sign new contracts they deem less favorable.

Some, feeling backed into a corner, have signed the agreements. Others like O’Malley and Joseph Matula, a former ER doctor at Lower Bucks, refused and are seeking work elsewhere. But it’s not an easy task: Most hospitals require a three- to four-month credentialing process before physicians can start, leaving some of the former Prime staffers potentially out of a job for nearly half a year.

“For those who don’t have other opportunities to work right away, they’re holding a gun to their head, forcing them to work, forcing them to sign a restrictive contract, and I’m concerned that that’s the shape of things to come,” Matula said. “If this is allowed to happen, why wouldn’t other groups do it?”

Legacy’s successor, Progressive Emergency Physicians, is using the staffers' back pay as a retention bonus, promising it in increments in the first six months of a new contract that offers a 20 percent lower hourly rate than Legacy’s, according to four of the former ER staffers who were offered the deal. The agreement also extends the at-will period at which a doctor can be fired to six months, and stipulates that the retention bonus must be paid back by the employee if he or she leaves within a year, the staffers said.

Andrew Sama, the CEO of Progressive, hung up on a reporter from the Inquirer and Daily News. David Calabrese, Progressive’s chief operating officer, said that “this difficulty is between Legacy and its former employees" and declined further comment.

Legacy, headquartered in Tennessee, is in the process of being dismantled about a year after its organization. Its founder, Christopher Kelly, filed for Chapter 11 bankruptcy in November for business debts, and listed two separate, $3 million claims against him by former partners at the firm, federal court records show. Those claims stem from a searing civil suit in which those colleagues accuse Kelly of erratic, “oppressive behavior,” as well as financial mismanagement that was allegedly ruinous for the company.

Neither Kelly nor his attorney returned requests for comment.

And in the center of this is Prime and its local leadership, who said the debate hasn’t affected the service it offers to the public.

“We value our physicians and staff and maintain strict confidentiality as it relates to compensation and contract negotiations,” Rick Lucas, the chair of the department of emergency medicine at Suburban Community Hospital, said in a statement. “Our Emergency Departments in Philadelphia remain open, fully staffed and ready to serve the medical needs of the community.”

Officials at the health system said that Prime paid Legacy for the physicians' services and that the money should have been distributed to them. They have no records of what has and hasn’t been paid to the physicians, describing that as solely Legacy’s responsibility.

Patricia Pierce, a labor attorney working with the ER physicians, sees the issue plainly.

“This is an unconscionable business practice. It’s inconceivable to me, particularly the sort of carrot-and-stick behavior on part of both Prime and Progressive,” Pierce said, adding that she is still gathering information about the case and weighing her options on how to proceed.

“It’s unbelievable that any responsible business, let alone health-care professionals, would behave that way,” she said.

At smaller hospitals that don’t have the resources to hire and maintain a full roster of doctors, transitions between contracted staffing companies are usually seamless.

In fact, none of the five other hospitals that Prime contracted with Legacy to staff – in Ohio, Georgia, Texas, and Missouri – are dealing with issues of lost wages with Legacy’s replacements, according to Prime.

Prime’s issues began in September, when ER staffers at the three local hospitals received notice that Prime was terminating its contract with Legacy, which had become insolvent, according to the doctors.

Initially, the word from Prime was that the contract would last through the new year. Instead, the staffers at the three hospitals were later told that the contract would end in mid-November, and that Legacy was unable to pay its premiums for medical-malpractice insurance.

“Progressive saw the bleeding of the providers, that Legacy wasn’t going to pay us, and they went for the jugular," said Sandy Boyd, a physician assistant that previously worked at Lower Bucks. “That’s why they came in early and started adding all these stipulations.”

Meanwhile, 800 miles away, Legacy’s legal troubles continued.

Michele Sexton and Brant Gamble claim in their September lawsuit that Christopher Kelly tried to change the terms of Legacy’s terms of operation, diminishing their stake in the company they helped form.

When they objected, they say, Kelly went on the offensive, threatening to end the company.

“Kelly’s threats were not mere conjecture,” the complaint filed in the suit said. The two allege that Kelly “caused Legacy to fail to pay its emergency room contractors," caused some vendors and providers to threaten suspending services and caused other providers to “completely terminate their contracts with Legacy."

The lawsuit is still active in Tennessee.

In Greater Philadelphia, the Legacy employees at the three prime hospitals were encouraged to keep coming to work even without the prospect of being paid. Catherine Pelletier, a doctor who had worked at both Roxborough Memorial and Lower Bucks, said she personally felt compelled to, for the sake of the patients in the surrounding communities that relied on the hospital.

O’Malley said that Sama, the head of Progressive, assured him in November that he would be paid, and that his company had won the staffing contract from Prime by promising to handle the staffers' lost wages. In a separate conversation, O’Malley said Lower Bucks Co-Interim CEO Ruben Garza told him the same: That Progressive edged ahead in the bidding with its claim to handle the back-pay issue.

Days later, after not being paid on the scheduled payday and unwilling to sign the Progressive contract, O’Malley left the hospital.

As of last week, he and the other staffers who walked away from the Prime hospitals still don’t know if they have “tail” medical malpractice insurance, a term referring to the coverage given to former employees in case lawsuits are filed after they stop working at a facility.

Now, they’re worried about the state of affairs in the three Prime hospitals, concerned about safety.

“You have more patents per provider and you have providers forced to work longer hours, which is not healthy either,” Matula said. “The combo of all that is it’s a less safe environment for the patients, and a greater chance for bad things to happen.”