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  • Writer's pictureTheresa Barta

A Termination ‘Without Cause’ Can be Legally Challenged.

Updated: Oct 15, 2021

If you’re a physician, a “without cause” termination is just as harmful as being terminated for cause. In many cases it can be legally challenged because it is pretext for an unlawful reason. Here are a couple of examples.

‘Without Cause’ As Pretext For Age Discrimination

Dr. Smith was employed (and a partner/shareholder) for ABC medical group for 20 years with a practice in a specialty in high demand. Despite positive annual reviews and having no disciplinary issues, he was terminated without cause. The medical group replaced him immediately with a young physician just out of residency.

Despite the no cause termination, ABC’s termination may have been unlawful age discrimination. A case of age discrimination arises when an employee shows:

1) They are 40 years of age or older at the time of the termination

2) At the time of termination, the employee was satisfactorily performing their job, and

3) The employee was replaced in their position by a significantly younger person.

‘Without Cause’ As Pretext For Retaliatory Conduct

Dr. Jones is a contracted (i.e., participating) provider with XYZ insurance provider network. Dr. Jones’ billing department routinely appeals claims that are denied by XYZ insurer. Without any warning, Dr. Jones is notified by XYZ insurer that her provider contract is being terminated without cause pursuant to “without cause” provision in her contract.

Despite the contractual language allowing for the contract to be terminated without cause, the termination may be legally actionable as violating California Business & Professions Code 2056. That is a law protecting physicians and surgeons when they are terminated because they appeal a payor’s decision to deny payment for a service. Similar laws protect other types of health care providers.

Involuntary Terminations Can Cause Long-Term Career Damage

A “without cause” termination may appear harmless compared to a “for cause” termination, but this is not the case. The truth is, especially if you are a physician, a “without cause” termination is very harmful and can cause long-term damage. That is because a “without cause” termination is still an involuntary termination and many, if not most, credentialing or employment applications require that involuntary terminations be disclosed. That can lead to applications or credentialing being denied, which in turn leads to loss of employment, hospital privileges or provider contracts. Because the question typically asks whether the physician was ever involuntarily terminated, the damage (i.e., denied and rejected applications) continues indefinitely into the future.

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