Judge rules retro comp change violated docs' contracts

Physicians employed by integrated delivery system Wheaton Franciscan Healthcare, in Racine, Wis., won a partial victory in civil court this month after a judge ruled that changes to the way the organization compensated doctors violated their contracts.

The saga began in July 2008, when Wheaton switched from a net-collections model to an RVU-based (relative value units) compensation system. According to Wheaton officials, the comp system approved at the beginning of the contract year mistakenly gave physicians credit for charity care, so the change was applied retroactively.

According to the Journal Times, doctors said at the time that most physicians and surgeons found the change unfair and thought it was made without any physician input. Several physicians left the system over the matter, and two doctors ultimately filed lawsuits against Wheaton Franciscan Medical Group Inc., alleging that the switch violated the doctors' employment agreements and Wheaton's compensation plan. Although Wheaton maintained that not all physicians were harmed by the change, former Wheaton spine surgeon Branko Prpa, MD, and his lawyer argued that physicians indeed lost pay on work already performed and yet to be performed in 2008.

On April 1, 2011, Racine County Circuit Court Judge Gerald Ptacek ruled that while the act of making a mid-year compensation change was allowed, Wheaton was in breach of contract by applying that change (made to correct its own error) retroactively. A future hearing will determine what damages, if any, shall be awarded in the Prpa case, according to the decision.

Although the judge ruled previously that Wheaton's 18-month restrictive covenant is enforceable, he eliminated the provision that prohibits the group's former physicians from soliciting patients and referral sources from Racine County for a new practice outside the area.

To learn more:
- read this article from the Journal Times
- get more background on the comp change and noncompete ruling

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