Human Resources: When You Must Fire a Physician

November 1, 2007

Dismissing an employee is always an unpleasant event. But when that employee is a physician, it’s also complicated and potentially legally risky. Here’s how to avoid the pitfalls.


No medical practice enjoys the thought of severing ties with one of its physicians, but sometimes it’s the only practical solution to a bad situation. Perhaps the practice has repeatedly tried to work with a troublesome physician without success, or maybe the doctor has committed some unpardonable offense - whatever the case, there are some circumstances in which a practice must let a physician go.

We all start relationships - whether they are personal or business-oriented - with the best of intentions. But every relationship encounters trouble, and sometimes that trouble just can’t be worked through, says Paul Angotti, president of the medical practice consulting firm Management Design LLC in Monument, Colo.

“It’s analogous to a marriage,” Angotti says of the working relationship between physicians. “It needs to be a trusting relationship, where doctors trust their patients to the other doctor when they’re on vacation, and the other doctor is on call. … Sometimes it just doesn’t work out; sometimes there are personality conflicts.”

If your practice had to fire a physician, would you know what to do? Do you know what steps you need to take to protect your practice from a lawsuit? Even if there are no problems now, you should know how to protect your practice in case problems arise in the future.

How did you get there?

While there are any number of reasons a practice may want to dismiss a physician, most experts agree it usually takes an egregious offense - or series of offenses - before such situations come to the point of terminating employment.

“It takes very, very bad behavior to get fired as a physician,” agrees Jeffrey Denning, a management consultant at Practice Performance Group in La Jolla, Calif.

There are obvious reasons for termination, such as losing an insurance contract, a Medicare license, or privileges at a hospital. All of these can mean a financial loss for the practice, and that makes the physician a liability rather than an asset.

More often, though, the actions that drive a practice to consider firing a physician fall under the broad heading of “anti-group behavior.” These offenses are sometimes more subjective in nature than losing hospital privileges, but they are the types of actions that work counter to the group’s overall harmony and mission.

Take, for example, the doctor who harasses clinical staff. Whether he is actively berating medical assistants or merely badgering nurses into providing preferential treatment ahead of the practice’s other doctors, it is clear that such behavior falls outside of what the practice deems acceptable. On the other hand, a rude exchange with front-office staff isn’t the same thing as losing your Medicare license. Or is it?

Some reasons for termination are easier to prove than others. When a doctor loses hospital privileges, for example, the hospital usually sends a letter stating the loss of privileges and documenting the reasons for it. The same is true for the loss of an insurance contract or a Medicare or DEA license. In each of those cases, the practice will have written corroboration by an outside party that can be used to demonstrate justifiable grounds for dismissal.

In the case of the doctor who is verbally abusing clinical staff, though, it is likely that such behavior has occurred more than once. Unless you are thorough about documenting every instance of abuse, it is easy for discussions to degenerate into “he-said, she-said” arguments.

That’s why it’s important to follow an established process for termination.

Get everything in writing

Chances are, whether the offending physician is a partner in the practice or a full-time employee, that he or she has an employment contract. A good physician employment contract will specify a variety of possible causes for termination, including scenarios that cover the loss of insurance contracts, hospital privileges, and various licenses. In such cases in which an explicit cause is defined, the contract usually details the steps the practice will follow before terminating the offending doctor.


Some contracts require a 90- or 180-day notice before termination, even with cause. Others may define additional requirements. “Obviously, if it is a well-written contract, it is going to cover most everything,” says Angotti. “There will be issues of compensation, severance pay, and bonus pay that may come from collections.”

However, in more subjective areas such as harassment - or even something as simple as a fundamental disagreement in working philosophy between the physician and the practice - you need to think in terms of documenting everything. Write down every instance of the problematic behavior - including dates, times, and witnesses present - and keep such documentation for future reference if it is needed.

“The process is to first lay the groundwork to be able to prove, if needed, that you’ve been fair with the doctor,” Denning says. Denning has worked with a variety of medical practices, and he has been involved with firing issues firsthand. He knows that the key to protecting your practice is due diligence.

That means communicating all of the problematic behaviors to the offending physician. If things don’t improve, then you should gradually ratchet up the severity of the message so that termination doesn’t come as a surprise. “It’s the same thing you do with any other employee,” says Denning. “You want to be able to prove to a hearing officer of some kind that you’ve been fair. Firing people without telling them what is wrong is not fair.”

That said, if the physician’s disruptive actions are well documented, you don’t have to give him or her a long period of time to change behavior. Just be sure you put into writing the changes your practice expects of the physician and the outcome if that doctor fails to make those changes.

Gender, race, and age

Under federal law, gender, race, and age cannot be factors in terminating an employee. If you think there could be any question of these factors playing a role in your practice’s decision, it’s even more important that you document all the reasons for the termination.

“You’re going to have to be really, really careful if you are in any of those situations - more careful that you would be normally,” warns Angotti. He recommends working with an attorney to make certain the practice isn’t leaving itself open to a discrimination lawsuit. “If you have done your homework, and you have a good, legal, bulletproof reason for termination, that should not come up.”

“We once terminated a physician who was 43,” remembers Angotti. “Age discrimination, by federal law, begins at 40. We asked, ‘Are we doing anything here that would allow this person to bring up the age issue?’ Make sure that you don’t say anything in writing or verbally that would be a potential problem.”

On the other hand, circumstances that may seem cut and dry to practices aren’t always perceived as such by others. Denning has found this especially true when it comes to female physicians working in predominantly male groups. “Male physicians can be very rooted in their interpretation of what other doctors should be like - and the answer is ‘You should be more like me!’ So men and women often come into conflict over this issue. It’s an easy one to solve with a pay formula, but if they come to a disagreement over it, it may be a gender-related problem.”

What about severance pay?

It’s become such a cliché that we almost hesitate to mention it, but there are enough physicians who demand a severance package upon termination that you should know what to expect.

If the physician in question is a partner, the partnership agreement usually details how payment will be made in the event of retirement, termination, or other partnership dissolutions. However, sometimes a practice wants to avoid protracted dealings with the exiting partner over ongoing issues such as collections. In those cases, it might make sense for the practice to offer a cash settlement equivalent to, say, 25 percent of the departing physician’s outstanding accounts receivable.

But if the physician is not a partner, usually the practice owes that doctor nothing. “If it’s an employee physician who is not an owner, the employee contract usually calls for you to be paid to and through your last day of work, and that is it. Just like any other employee,” says Denning.

It’s likely that some physicians won’t see it that way, though. “They often feel like they should get it because they did the work,” explains Denning. “It often comes as a surprise to an employed physician, who might have been on a partner track, but it’s not working out. They say, ‘I quit, give me my money.’ But there isn’t any money.”


Still, some practices are so desperate to get rid of a physician that they’re willing to pay them a couple of months’ salary to put an end to his or her employment. If that’s the case, be sure to get something in writing that absolves your practice from any future liability. “Some people will even have a document that says that if you accept the settlement, then you agree not to pursue legal action,” explains Angotti. “This is something you obviously need to do with an attorney in advance so that it is all legally correct.”

It’s not over when it’s over

Although the act of firing a physician can be difficult, and even traumatic, there is still work for the practice to do after the physician has left.

The local board of medical examiners usually has specific rules about what must happen when a physician leaves a practice. “Usually the top line is continuity of care of patients,” explains Angotti. “You need to figure out how you are going to take care of [the departing physician’s] patients.”

If yours is a 20-physician practice, it may be simple to shift patients to other doctors. But if it’s a three-physician practice that has to let a doctor go, the solution isn’t always so easy. In such cases, Angotti recommends referring patients to a medical referral process at a local hospital or medical society.

You’ll also need to let a variety of people know that the physician in question is no longer with your practice. Be sure to get in touch with your board of medical examiners, the state medical licensing organization, all insurance carriers that your practice deals with, and all government entitlement programs, such as Medicaid and Medicare. “There is almost always a requirement in the managed-care contract and a requirement in the law to notify the insurance carriers and other programs,” says Angotti.

Then there’s the staff. Not only do you have to let them know that the physician is no longer with your practice, you have to be prepared for any kind of emotional backlash that might accompany the announcement.

Angotti suggests keeping any notice to the staff brief and professional - “As of last night at 7 p.m., Dr. Smith is no longer with the practice.” Don’t invite discussion or debate on the topic. “They’re going to ask why,” says Angotti. “You just say that it is a privacy issue, and we want to respect Dr. Smith’s privacy and his legal rights. We’re not going to make a comment on that.”

More important, make sure your staff doesn’t elaborate on the physician’s departure to patients. If patients call and ask why a particular doctor is no longer with the practice, tell staff not to comment on the reason and to schedule the patient with another doctor. Angotti stresses this last point in particular: “I write a script up and give it to every staff member and say, ‘This is what you say when patients call.’ Don’t say more and don’t say less, because the staff can get the practice sued.”

Robert Anthony, a former associate editor for Physicians Practice, has written for the healthcare and practice management industries for six years. His work has appeared in Physicians Practice, edge, Humana’sYour Practice, and Publisher’s Weekly. He is based in Baltimore, Md. He can be reached via editor@physicianspractice.com.

This article originally appeared in the November 2007 issue of Physicians Practice.