Navigating Legal Concerns During Your APP Transition

- Good morning, everybody. I'd really like to welcome you to joining us, and thank you for your time. As we proceed with this webinar, we know that this is an issue of importance to all of you as well as our profession as we move forward. A couple housekeeping items, obviously, this becomes a very emotional issue. We're going to ask you again to raise the questions that we can provide the information that's needed, but understand that because there's so many different practice settings, there are gonna be some details here that may be more specific to individual communications versus broad. Also, we recognize that some of these deliberations and negotiations may still be ongoing, and there's some sensitive information, as a result, we ask you to follow the instructions as you can to make sure that we can preserve your identity should you want to submit any anonymous issues or questions. And then the last thing is, I wanna thank you again, not only for joining us, but this is an issue that we need your assistance with, and that is, as much as we want to remain committed to helping you find your fulfillment in your career, the information you provide helps us better shape what resources we can provide you and how we can shape future policies and actions to ensure that should this occur again in the future, that we can have a better response or mitigate that such occurrence. Having said that, I'd like to move forward and introduce our two experts here, and I just wanna thank both of them for being here, as we have two exceptional experts to help answer your questions, first is Laura Seng, a partner at Barnes & Thornburg, and she's also the former chair of Multinational Healthcare Department. She concentrates her practice in many different areas, but among them are regulatory compliance, transactional matters, and medical-legal business matters, including professional service agreements, which I think will be highly relevant to this discussion. She is also, was a registered nurse prior to her career in law and specializing in women in children's health, nursing education, staff development, and hospital administration. She's very passionate about this subject and has already had some insight into this, and as you'll see, she's a national expert. Also joining us is Dr. Diana Nordlund, who serves as emergency care specialist as a corporate compliance officer, and she's also a clinical physician, working in a couple hours later this afternoon.

- She's also immediate past president of the Michigan College of Emergency Physicians and the chair of not only Michigan state's legislative committee but also the chair of Nationals ACEP's Medical-Legal Committee, and she still practices law as well with Henn Lesperance PLCC and Nordlund Hulverson PLCC. And having said that, I'd like to go ahead and pass it on to both Ms. Seng as well as Ms. Nordlund.

- Morning, thank you. So, again, I'm Laura Seng, I'm a healthcare partner with the law firm of Barnes & Thornburg. I'm based out of our South Bend, Indiana office, but I spend a lot of time in our Chicago office, our Grand Rapids office, Indianapolis, and various other places across the country. As noted in the introduction, I've been working with healthcare providers, including hospitals, physician groups, and specifically, emergency physicians for more than 20 years, and was previously a nurse on hospital administrator. So I understand some of the challenges that are being faced by healthcare providers in these really truly unprecedented times. I'd like to thank Leslie Moore, Laura Lang, John and Nelson, and especially, Chris and Diana, and the whole team at the American College of Emergency Physicians for all their hard work in coordinating this presentation today, ACEP is working diligently to provide its members with additional support and resources, specifically related to the closing of American Physician Partners. In my role as a healthcare attorney for provider clients, I've been involved in numerous practice acquisitions and mergers as well as private equity-backed management contracts, and practice sales, but we are certainly now entering a new era of navigating the effects of what happens, when a private equity-backed national group collapses. The closure of American Physician Partners without notice and without really a viable transition plan for physicians, for hospitals, and for the patients you care for is simply beyond the pale, leaving everyone to deal with the crisis that's been created, ACEP has asked me to answer some of the questions that are uppermost on the minds of its members, and I'm gonna do that now. And we thank you all for the questions that have been submitted previously. And again, as Christopher mentioned, we will be taking questions throughout because we really intend this to be really a dialogue, really the opening dialogue of how to address various different issues and what are some options and opportunities for your ACEP members. In addition, ACEP is gonna be publishing a toolkit on the website with more in-depth information and consideration for its members who are now reviewing current or new employment contracts and negotiating new employment agreements. Please note that we cannot provide specific legal advice to individuals on this webinar, but we're going to be doing our best to address general issues that are facing many of ACEP's members. You're encouraged to work with ACEP and your own healthcare attorneys to address your specific concerns and situations. The first topic that seems to have come up very frequently is malpractice insurance coverage. With regard to APP, physicians are gonna have to be working directly with contacts at APP if they're taking calls, or the insurance companies directly to determine if the policies held by your employer cover your liability have been paid by APP, the dates of those policies, when the policies terminate, and whether the coverage is claims-made or occurrence based. For many physicians, they understand and they know that they've had malpractice insurance covered by their employers, but they don't get into the details, nor should they have any reason to to get into the details of what those policies actually do and how they actually work. So I'm gonna just kind of briefly address some of the topics under those malpractice policies related to timing. We'll address more specific questions about malpractice policies in general in the toolkit, but specifically, we wanna talk a little bit about timing of policies and how those work, because that's the most important thing that seems to be on people's minds today. First off, there's really two basic types of malpractice policies, one is an occurrence-based policy, that means that any malpractice claims are covered that occurred during the policy period, regardless of when the actual claim is filed. Occurrence-based policies usually have a much higher insurance premium because the coverage extends indefinitely. So for example, if a policy is in effect from 2020 through 2022, any claims filed related to an event that occurred, hence the name occurrence policies, that occurred within that timeframe or covered regardless of when the claim is filed. So if a malpractice claim is filed in 2026 about an event that happened in 2021, that's still covered under an occurrence-based policy. Now, it is no longer very common at all for employers to carry occurrence-based policies because of those higher premium costs. What's much more common is that employers will carry claims-made policies. A claims-made policy means that any malpractice claims are covered if the claim itself is filed during the time that the insurance policy is in effect, for example, if the policy is in effect from 2022 through 2023, any claims filed during that time period are covered regardless of whether the event occurred in that time frame or occurred before that time period. But if an event occurs in 2023 and that claim is not filed until 2024, a claims-made policy will not cover that event because the policy term itself has expired. Because claims obviously are gonna be filed after a policy term expires, tail coverage is then needed. Tail coverage is the common name for an extended reporting period endorsement, this is a rider or an additional coverage that's purchased to cover claims that are filed under a claims-made policy when the claim is filed after the end of the policy period, hence, extended reporting, that's the name, but most of us just call it tail coverage. If your employer provides malpractice insurance or provided malpractice insurance, read the employment contract carefully as to who pays for tail coverage after termination of employment. For some employers, they push that burden of tail coverage onto the employees. For some employers, they cover the tail coverage for the employee, but sometimes, it's only in the specific terms of how the employment contract itself is terminated, for example, an employment contract might provide that if the employer terminates the agreement without cause, then the employer will pick up the cost of that tail coverage, but if the physician leaves employment, if they're the one who resigns, it might, the burden may be shifted to the individual physician to have to pick up the cost of that tail coverage. So, again, looking very carefully at your contract terms from an employment standpoint is going to help give you some direction on who's paying for that tail coverage. With APP, it's extremely likely that tail coverage is gonna be needed for all physicians and that APP isn't paying for it. This leaves physicians needing to seek their own tail coverage policies. Now, it may be cheaper, it may be, you know, here's maybe practice tip of the day, it may be very much cheaper for a physician to work directly with the insurance company that provided the underlying policy to obtain that tail coverage rather than buying it independently on the market. The reason being is because the insurance company who has worked with you in the past, whether you know you've worked with them or not, if the employer has worked with that insurance company, but they know your claims history, and so if you have a good claims history that may be able to provide you a discount then on being able to purchase tail coverage. So, again, it's probably important to talk directly with the insurance company that provided your prior policy to determine if you can obtain tail coverage at a cheaper rate than going after it on the open market.

- Laura, would you mind if I chime in very quickly?

- Sure.

- I was able to speak with our state representative for MagMutual, who I understand represents a significant number of APP physicians. And as I often ask reps questions that they can't answer themselves and have to go up the food chain, the question was sent up the food chain. So we are working on a direct link with MagMutual to see what we can do to help facilitate those discussions for tail coverage.

- Excellent, that's excellent, because there is power in numbers, and so, and there is, and groups, you know, and those are much more, much more interested if they can, you know, if they can receive premiums from a whole lot of people, they're much more likely to reduce the premium costs on an individual basis. So ACEP working with the MagMutual directly, that's a great benefit. So hopefully, that will bear some good fruit. Keep in mind that another potential alternative dime to obtaining insurance on your own from a tail coverage standpoint, or maybe in conjunction with providing it that way, is to talk to your new employer, because some new employers may provide what's commonly called nose coverage, so it works the opposite way, it's a prior acts endorsement. These endorsements to a new insurance policy cover the acts and the omissions of the physician prior to the start of the new policy period. This can be negotiated as a benefit potentially with a new employer in lieu of, for example, a signing bonus or recruitment bonus with the new employer. But be aware that in exchange for this benefit, many employers, similar to when they're looking at a recruitment bonus, they may require that you work for that employer for a period of time in order to receive that benefit. Again, these are all topics for negotiation, so look at those employment contracts very carefully. A related question on this topic was personal umbrella policies to use potentially while in transition between various different medical malpractice liability policies. Personal umbrella policies typically do not address or cover professional malpractice liability. Those are typically intended to supplement an individual's basic liability policy, such as their homeowner's insurance, renter's insurance, or their auto insurance policy. So that may be, you know, using a personal umbrella policy is probably not an option. But again, please contact your individual insurance carrier to address questions related to specific policies. A second topic that has come up frequently is benefits and COBRA coverage. In general, when a company is winding down, it may transition its health plans to another group health plan. If so, plan beneficiaries will typically receive a COBRA election notice regarding who is the new insurance provider, and can they obtain insurance through that provider? However, if a company simply ceases to do business, plan beneficiaries may receive a termination notice because the health plan itself, the underlying health plan is being simply terminated. If a health plan is terminated, there is no opportunity for post-employment COBRA coverage. So, again, this is going to be an area that people are going to need to look at very carefully as to whether they are going to have the opportunity to continue healthcare benefits for a previous policy, whether they need a new policy, or whether they may need to seek a policy on the general marketplace as they're between employment opportunities. And again, that may be a topic, payment for a stipend for payment of private health insurance is also certainly a topic for future negotiation with a new employer. A third topic is the topic that has come up about APP's basic failure to pay wages. We've heard that APP is not paying subcontractors, for example, for shifts that have been worked, which, of course, is a breach of contract. In addition, we have heard that APP has not paid employed physicians either for their hours of work, which this is now not only a breach of contract, but could expose APP to liability for violation of state wage and hour laws. Direct employer violations should be reported to the state's attorney general's office and the Department of Labor for the Wage and Hour Division It's highly recommended that you work with a labor and employment attorney on these particular matters. As to what recourse do physicians have for contract violations, certainly, claims can be filed for breach of contract, but the practical consideration, as everyone I think has already been thinking about, is whether, even if successful on these claims, is there a viable entity to pay damages? And that is a difficult, difficult question, but filing a claim certainly puts you in the queue if there are monies available and if you're successful on that claim. But more importantly, filing a claim puts the APP's insurance company on notice, who potentially might have funds available to address business liability and employment claims that are filed. Again, we don't know, Diana may know, we don't know if there are, what the opportunities or options may be in terms of filing claims directly against APP or its insurance, for, through its insurance provider at this point in time.

- Laura, can I ask you a question about that?

- Sure.

- So I've heard you give us a lot of great advice about things to think about and things to look for and also things that are way over 99.9% of our heads, right? We're smart people, we know a lot of stuff, but corporate and bankruptcy and employment law is not at the top of most of our lists. So if we need an expert, thank you for being one for us today, where do we go? I mean, I know we can go to our state chapters and ask our state college executive directors if they have any resources that they can recommend, we can go to our state bar associations, and add inquiry at out state bar associations if there are any attorneys who hold him, her, or themselves out to be specialists in this area that are currently taking clients. How do we know we're not picking a bad lawyer? How do we know we're getting-

- Yeah.

- The right guy or gal? Like what do we do?

- That's a great, that is an excellent question. It is difficult. I mean, it's the same as, I'm trying to pick a new family practice physician, how do you know how to pick, you know? Attorneys work the same way physicians do and from the standpoint of people specialized in different areas, and how do you know when you're getting a good one? And some of that is word of mouth, right? Some of that, but for sure, having recommendations from the state chapter, from the local bar association, those are much more reliable sources when you know, when you have no idea where to go, then just Googling, "Find me an attorney," no different than Googling up, "Find me a good physician who's an orthopedic surgeon." That's just a little dangerous, right, to try and pick things that way, but because attorneys specialize the same way physicians do, it's also, you can certainly use each other. I mean, or use attorneys that you've worked with in other capacities to get recommendations. So, for example, if you've worked with a good real estate attorney, right? Asking them who they know who's a good attorney in contract law, healthcare law, specifically, corporate law, and/or labor and employment. And they may be able to provide you with some recommendations as well. But just like physicians, you don't ask your real estate attorney to help you negotiate an employment contract, right? No more than you go to your cardiologist to ask about what to do about, you know, about my knee issue, right? That's my orthopedic guy, not my cardiologist. So, you know, it's, I did have, I'll have to share the story. I did have a physician a couple of years ago, client who came to me and he said, who said, he said, "I've tried working with my usual attorney, and then he now said that I needed to call you." And so I asked him who his usual attorney was, not by name, but by specialty type. Well, it was his divorce lawyer. And I said, "Well that's the perfect example," right? They know, they may know a great person to recommend you to, but it might not be the work that they can do personally. Obviously, firms that have a breadth and lot, and, you know, a lot, it's like a multi-specialty physician practice that have a large breadth of services can certainly, and a large number of offices can also get you into a particular specialty area as well as local representation if that's important as well. In this day and age, having an attorney who's down the street is probably not as important as it used to be because almost everything we do is electronically. But you do need an attorney who is licensed in the state that you are, where you're performing services and where you're looking at particular issues if you're talking about litigation. So from a litigation standpoint, the attorney has to be licensed in the state, where they are appearing before the courts or whether filing claims on your behalf. In regards to general employment law, it's very helpful to have an attorney who is licensed in that state because employment laws are state-specific, general contracting principles, not so much, general employment, employment contract questions, how to put together a new business, how to negotiate with between a physician and employer, the physician in a hospital, physician group in a hospital does not require boots on the ground from an attorney standpoint, but you do need the experience side of it.

- So then for that subset of questions such as, I recently left APP, or, I work for a group that's not APP, but I'm worried about the stability of my group, can I demand a retainer, down payment per se, against my shifts next month? Or, can I demand now written assurances, that in the event of an unexpected financial collapse, X, Y, Z will be guaranteed to me? Those really are questions that can only be answered in a helpful way by an attorney who practices and is licensed in your state, the state in which you as a physician are practicing medicine under that contract. Sit down, take a look at your contract, sit down to see what leverage you have, and then how to address it with that corporation. Is that, would you agree with that?

- I would agree with that in general, I think there are, for example, our law firm that, you know, has offices across the country, right? And so when we are working on, we may bring together certain teams to work on a...

- No, we lost you, Laura. Technology.

- In that particular state to look at this issue, and I need a general healthcare, healthcare generalist to look at things in general, and that might be, you know, might be me or someone else in our department who's not potentially licensed in a particular state. And so we work together in groups so that the person who is licensed in the state can address those specific state law issues. But you're absolutely right, you need someone who knows the area, who knows the area of law, and we have the particular question you asked about, can we start asking for money upfront? Yes, we have been doing that. People have been doing that, and they've been, and the people they've been asking for it from is not only guarantees from potentially new employers or new contractors, it's from the hospitals themselves. The hospitals, of course, are panicking, right? And they know the physicians that they work with, they love those physicians, they want to help keep them happy, and typically are wanting to help provide assistance through this crisis. So, you know, for a while we've been, you know, dealing with a lot of questions this morning that are sort of the negatives and the difficult pieces of dealing with APP's collapse. Certainly, this is a challenging time for everyone, but it's also an opportunity for new employment relationships, working together collaboratively to offer professional services in a collaborative manner, joining together to say, "Hey, we are the physicians, who have always served X, Y, Z hospital, we have a great relationship with that hospital. Can we continue that relationship, but perhaps we need to do it under a, you know, a new group," right? "It's under, and maybe it's a group that we're forming ourselves?" And working with that hospital and some of that assistance or that pre-funding, some of those things to get people over the hurdle, nose insurance, recruitment, bonuses, some guaranteed payments for a period of time, recruitment assistance to build out that group and make it even bigger are potential opportunities in working with the hospitals who are also being hit by this crisis.

- And that is a fantastic segue into a reminder, the toolkit ACEP has provided for members on those considering and exploring building an independent group. And I wanted to ask a follow-up question, Laura, if I may. Some of our members have seen great responses and preservation of long-standing relationships with hospitals, and others have been abandoned, they can't even get the front, and I'm thinking particularly of one of my state members who couldn't even get in the door of the C-suite, and contracts that have existed for 30 years are just tossed aside and subsumed by this new, presumably, not having any intimate knowledge of these contracts cheaper.

- Right.

- So, you know, I think I heard you say that coming together is an option. There has been some questions about things like class action lawsuits, or simply a large group of physicians coming together and hiring representation, pooling resources to help with fees.

- Right

- Is that something that you see having a viable option moving forward when we're looking at how much leverage do we have to negotiate, whether or not we have to stay on for two years to get our tail covered or get paid for the last month, or, because it really seems like we've been stripped of our autonomy, and our, I mean, we have roots in our communities, our kids are in school, or our partners love the mountains, or whatever it is, that there are a lot of disincentives to feeling empowered to negotiate.

- Right. No, I think you're absolutely right. There is strength in numbers, right? And that is, and being able to, and you know, not being able to get into see the C-suite folks in a particular situation, that's just, you know, that's just very short-sighted. I think on the part of people who aren't taking those calls. It's certainly, you know, hospitals are businesses as well, and they are, you know, they're, for some of them, this is just like for certain physicians, this is an opportunity, for certain hospitals, this is an opportunity as well. Perhaps it's a new group that they, you know, that they've always wanted to work with, but they were locked into a contract with APP and weren't able to do that. So, everyone is looking at what are the opportunities, you know, being presented here as well as addressing the challenges. I think the more that, a particular hospital is challenged by APP's collapse, the more opportunities there are, obviously, for the physicians to be able to address that challenge. But certainly doing it collectively, doing it as a group, doing it as, "Hey, here's a new group we are going to form." Those are, so that you look, hospital, you know, it's, you don't want to have a whole new group of physicians come in here either. So, you know, if we can help provide those services and continue things as incredibly stable, which reduces your expenses, you don't have a whole new, you know, new group of physicians coming on board, that those are, you know, viable options, and those are opportunities that many hospitals are gonna listen to. But it will take, it can't be just a single physician who comes in and says, you know, "Hey, I'll take over your ER," right? No one physician can do that. So there has to be, you know, there has to be some collective action, I think with in terms of collective actions against APP, certainly, coming together, I, you know, I'm not gonna be surprised if there's some big class action lawsuit for dealing with, you know, dealing with this across the country, and certainly, those are going to be, certainly, again, it's banding together in numbers, certainly, reduces expenses for all, and potentially increases the ability to have some recoupment.

- Chris, did you wanna make a comment?

- Yeah, if I can. Just because both of you touched upon an important topic, and that is, as mentioned at the very beginning, that there's a variety of different settings and the fear of stakeholders. Some have stepped up and some not necessarily. And one of the things I just wanna make sure is that we recognize that there are some hospitals and there are some other stakeholders that have stepped up, and there are others who haven't, that where and when we can recognize and appreciate those who did, fantastic. And where and those that not is where we have further dialogue and/or actions later. But I just wanna make sure that we recognize that some people have stepped up, and they should be acknowledged.

- Absolutely. Absolutely.

- I didn't mean to interrupt your flow. But .

- No, I think that's, no.

- So perfectly, thanks for letting me jump in.

- No, it's a great segue. I mean, we are, you know, we, there are an awful lot of questions out there, there are a lot of issues, and a lot of people are just hurting, right? In trying to work their way through this. It's a challenge, it's a challenge for everyone. I think, you know, I've just, you know, from my side of it, I've been incredibly impressed that ACEP is, you know, recognizing this challenge and trying to step in, and, you know, take action on behalf of its members. Again, at the end of the day, you know, this is, it's a challenge, and trying work your way through how, what does this mean for me? How do I, you know, how do I continue to provide the outstanding patient care that I always have, and be compensated for it in a fair and equitable manner is the bottom line. And, you know, with these challenges, it's new opportunities, it's opportunities for new employment agreements, joining together to offer professional services in a collaborative manner, you know, direct contracts with hospitals, grouping physicians together to form new groups on their own, that with potentially with hospital support or without. All of these, there's a lot of opportunities out there, and there are a lot of challenges out there. And I think, you know, the underlying principle here is that, you know, the American College of Emergency Physicians is here to help. And so, whatever can be done to help support, to support everyone, and as members, to work their way through this challenge is really where, you know, this is the kick-off to that to some of that support. So I think with that probably, Diana, I don't know if you wanna start taking questions, I've been seeing all kinds of things popping in, popping in here that I'm trying not to read and talk at the same time. So if we wanna start addressing particular questions, or questions that have come in during the course of the webinar. I think I'll turn things over to Diana.

- So, we've had a few questions, and please, Laura, chime in anytime, regarding some of the fundamentals of what the bankruptcy means, and also how similar is the situation with APP to the situation with Envision, which happened in May, and sort of some of the shades of difference between, and other groups that have had similar situations as well as how, you know, okay, let's say I have the flexibility to not, to feel like I can say no to this new contract that's been waved under my nose, how do I keep from making this mistake again? Like if there isn't an independent group that's viable in my areas, not all of us have the choice, not all of us have the opportunity to say, "Well, this is the only type of group I wanna work for, and I'm not saying one is better than the other, independent groups fail all the time too. I personally have been through that. We had a relationship for 30 years, and in swooped a large group, and suddenly my contract and my deferred comp and my 401k meant a whole lot less than it had for 24 hours before," because these are the kinds of things that happen in hours, not weeks. So the first thing I wanted to bring up was the difference between the filings that we're looking at with Envision versus APP, Envisions was a chapter 11, which is a reorg filing, which means they have a certain time period, 120 days from filing, in order to be able to try to move some money around and stay viable. So that's why Envision is operating, at least according to their website, business as usual. There's very little, in fact, on their website about their filing, there was a little press release on the day of their filing, but talking to the members in my states, in my state who work for Envision, they did have much more of a sense of stability with ongoing operations of business than the folks who are with APP because of the difference in the way that they approached the solvency problems. So, Envision had 7. something billion dollars in debt that they needed to reorganize, and through the reorganization and the chapter 11, they were looking through, get at relieving 5. something billion of it, which would then give them the opportunity to proceed as close to business as usual as possible. Whereas, and again, please correct me if I'm wrong, to my knowledge, APP has not in fact filed yet. Please, I, very good. But they were talking about chapter 7, which is a whoop, we're done, doors close, and then there have been a number of questions about, well, how can we do this? How can APP just take the money that I earn for them and then not pay me? I don't understand. And that's, and by no means am I intimately familiar with bankruptcy law, even in my own state, let alone in the 17 other states that APP practices. So these are very broad general principles only, but when a corporation declare bankruptcy, then all their existing assets go into a pool, and then the creditors get to chip away at it. And now, as someone who is owed money by APP, you are technically and for all intents and purposes a creditor, which is why then we'd start talking about filing claims for wages due, and that sort of thing because that's the only way we're gonna get it, unless something miraculous occurs, which we can hope for miracles. it's okay to hope for miracles, but I think better to cover one's bases, and at least check the boxes and do the right filings, and those things that need to be done in order to try to protect your own assets that are earned by you and due to you, and that would include things like deferred comp, other benefits that were incentives and bonuses, these have all been questions that have been coming in, these are the things, that I had a contractual relationship with my employer, I worked for them, they agreed to provide them for me, now they're gone, what are my recourses? So aside from then finding an attorney who is skilled in the ways of becoming a creditor to a large corporation, do you have any other thoughts as far as what our members could think about when they're trying to, you know, while still hoping that APP makes good on its contracts with them, how we might kind of move forward with specific steps just in case APP doesn't?

- That's a good one. And I think one of the big things in the bank, you know, if APP files for bankruptcy, which I, you know, I haven't heard that they have done that yet, but I am assuming that they will. And if they file for chapter 7, as you said, it's gonna be, "Here's the assets, they're in a pool, and here's the creditors." My concern, big concern here is that the physician employees or contractors to APP are not gonna be secured creditors, they're going to be general creditors. And so, which the-

- So many back sutured sections. Yeah. So the terminology there being a secured creditor are the ones who have priority of payment. And so employees are not secured creditors, unfortunately, and so the biggest, you know, the, probably the secured creditors, which I'm assuming because they have defaulted or are potentially in default on a number of loans, and/or loans that might have been provided to them, and this is an assumption on my part, but I have to assume that they are in default on a number of loans, that that's what's causing part of the collapse here. And those loans, whether they are from banks or whether they are from private equity companies, et cetera, are going to most likely be secured loans, and that is secured by the assets of the company, whereas employment payments or wages, contract payments is not secured debt of the company. And that, and what that unfortunately means is that the unsecured creditors are at the bottom of the pile. And that's why, I think, potentially in a bankruptcy situation, it's not, go out here on a limb here, I don't think it's incredibly likely that unsecured creditors are going to see a lot of cash come out of a company that goes through bankruptcy, that's just pretty historically how it works, not specifically to APP, but I hardly ever see bankrupt companies paying out large amounts of cash to unsecured creditors because the cash is just not there. And so, that becomes the problem. So the potentially more viable option may be if there are actual lawsuits filed, is there an insurance company in the background here? So it's not, so that the insurance company who is handling, or who is responsible potentially for providing coverage for lawsuit claims made against the company, that may be a potentially more viable source of funds than the company itself who goes through bankruptcy.

- And then if we wanted to at least explore that as a backup option, would that be a bankruptcy attorney who could help us answer that question, or would it still be an employment labor attorney?

- It may just simply be a corporate attorney.

- Okay.

- As opposed to, you know, it may not necessarily need to be, it might be labor and employment. And there are probably, there are definitely employment-related pieces to that, if you're looking for money based upon wages and hours, because the additional claims are not just gonna be, "You owe me this," it's gonna be, "Oh, and by the way, you're in violation of this wage and hour law from a states standpoint," or, "This federal law from a state, from a wage and hour standpoint." So, yes, having a labor and employment attorney working on those kind of claims is gonna be, would be extremely helpful. If it's purely a breach of contract claim, because it's the subcontractor who provided physicians, and those physicians aren't getting, you know, and that company didn't get paid by APP either, it's not a wage and hour claim, now, it's just, it's gonna be a corporate litigation claim.

- So then there's a potential benefit, let's say there are 20 docs at a site, they all have the same contract, they all want these questions answered. Getting together, pooling resources, an attorney can only represent one interest, right? So if there are competing interests within a group of attorneys, the group has to decide on the interest and things that are going to be most effectively negotiated, but if that group then ended up at a firm that had several attorneys who specialize, maybe we've got a bankruptcy lawyer, maybe we've got a contracts lawyers, maybe we've got a couple employment lawyers, then that might be a way that a group of docs who have very similar, if not exactly the same questions, could pool their resources, get their questions answered by an expert on the law in their state, which is the only person who can also litigate on their behalf, or negotiate on their behalf-

- Yeah.

- As necessary, and then move forward with, a, answering these questions that now you're helping us understand in the first place, that we need to have answers to. Since I'm imagining that there are a few people in the audience who have new things to think about today, as well as, okay, now we have these questions that need to be answered, where do we go next? So we can go to our state chapters, we can go to the state bar, we can call up our divorce attorneys or our real estate attorneys, or whoever, and say, "Hey, do you know anybody who does this kind of work?"

- Right.

- And they're almost always happy to send a text or get on the phone and connect you with someone, even if the first try isn't right, the next one down the hill might be the right fit to give at least some sense of leverage and useful information going forward rather than feeling like all of this is raining down and there's nothing that can be done.

- Absolutely, absolutely. And when you talk about people pooling together, part of that, you know, from the legal side is our joint and several represent, you know, joint representations, right? So, I've been working with a group of physicians who had an issue with a private equity-backed company, and those physicians are not APP, and those physicians are all individual clients, but they are together in a joint representation. And what that means is, they get to pool their resources, they work collaboratively with each other on making decisions on, are we going to sue, are we going to do this? What are we going to include in a lawsuit, et cetera. And they work together on from that side of it, but it also means they're pooling their resources, so they're not, there's not seven or 10 different representations by that law firm. They're treated as a one client. And so they're, that way, you know, it's one legal fee, right? And they pool it together, and they work together, and that, because they have very similar common interests, and because they all had the exact same contract, they all came from the same geographic area. And so their interests are so much in alignment, that they, you know, they act as a collective client, and that lets them save incredible amount of money by doing that.

- Absolutely. So then when our members are in the position where, you know, there's a group of folks who are trying to decide what to do, "What do I do with this contract that's in front of me," as well as, "What do I do with these potential benefits, salary, insurance, tail, that sort of things, that are owed to me?" There were a few outstanding questions on tail. We've covered the personal umbrella policy option, we've covered the brokerage slash, you know, for following up with the existing insurer with MagMutual, to see what a group negotiation might look like. What about the... One of the questions was about using offshore risk management groups, and how we may think we're insured, but then couldn't the same thing here, couldn't the risk retention group also have insufficient funds to cover my 18 years of tail coverage that I need if I'm seeing pediatric patients? And are there other things that I should be thinking about as I'm shopping for tail coverage?

- Yes. The short answer to that is yes.

- Yes.

- Because tail, the short answer is yes because tail coverage is complex. And so because it is, goes so far back in time, it really requires not only, you know, it's really an insurance contract review, and, you know, and from a legal standpoint, there are folks who look at insurance contracts. and that's their subspecialty, you know, they're not cardiologists, their specialty is insurance contract reviews, and not only the review of the contracts themselves, but also how to enforce your rights with that insurer when you need them. And so, you know, because insurance companies like any other business, you know, aren't like jumping up and down trying to say, "Hey, how can I make a payment?" You know, "How can I pay out this claim?" You know, the first piece they look at is, "Do I have an obligation to pay this claim or not?" And so being able to sometimes, you know, insurance risk attorneys are not only the policy on the front end, but they're looking at how do you enforce your rights potentially against the insurer themselves to make sure that a claim is covered. And again, that's its own, you know, it is it's own subspecialty as an insurance risk retention group, and who look at those pieces. And the first place to start when you're shopping is gonna be with obviously with brokers, right? With the insurance agents and understanding, you know, apples to apples, this policy versus that policy. And how do I, you know, what am I getting? What am I getting from my dollar here?

- Which, and I think it hasn't been said out loud yet, but I'm going to, that going bare is not viable.

- I'm sorry.

- It just is- I'm sorry. Yeah.

- I don't know how many folks are actually even considering it, but going bare is a good way to put all of your personal assets at risk.

- Oh, yeah.

- So I would say that not purchasing some form of tail that is decent enough, I mean, lawsuits, even without litigation, lawsuits can run, please, Laura, correct me if I'm wrong, but anywhere from 50,000 to a hundred grand without litigation, and can certainly well exceed that by a factor of several if you end up going to trial, so.

- Absolutely.

- Yes, I would strongly discourage you if anyone is considering just letting the tail slide. That's all I'm gonna say about that.

- Yeah, no, I'd agree, I'd agree, that's, going bare is, you know, I'm not a risk-taker kind person by nature, going bare makes me, you know, makes my blood pressure really go up, that is just, that is extremely risky, and yes, it does mean all your personal assets are at risk.

- So, to that end, that's a nice segue too to, as we look at, we touched a little bit on how do I avoid this in the future? How do I, you know, I get through this storm, whatever it looks like, perhaps I find a group of docs and hire a great attorney, or perhaps that contract is something I can stomach, and I'm just gonna sign it, or perhaps I'm gonna try an independent group. And you know, there are, one thing we've covered is we have a lot of options. We do more options than it initially feels like when you get those texts or emails from your corporation in the dark of night on the holiday evening usually, in my personal experience. So we do have some options that are starting to crystallize for us that didn't feel possible when this first started. So how do we, as we're looking ahead, how do we vet a new group that we're looking at a contract? And to this point, like when physicians look at contracts, they're looking at things like pay rate and fringe benefits, and if there's a non-compete clause and if there's a force majeure clause, and if there's, so we've known some things to look for, but now there's this new level that we haven't stopped to think about before, And how do we go into determining if this is the kind of group that is gonna be stable enough for us to work for? Yes, it's a roll of the dice no matter what you do. I mean, Moody's AAA can still go under, right? But is there a toolkit for that?

- Yeah. That's a good one. There was a lot packed in there, Diana, thanks.

- And you can turn it back to me, it's all fair game here.

- Yep, yep, yep. It's all good, it's all good. I think, I mean, two big themes in that, I mean one is, yes, when you're looking at a new agreement, you've got to just, it's time-consuming, it's looking at it piece by piece by piece, clause by clause, physicians hate that, generally speaking, they don't wanna, you know, they wanna go out, and they wanna save lives, right? Let me save lives and be well compensated for it, as I should be. And now you get, you know, you get this 20-page employment contract put in front of you and no one wants to dive through that minutiae. Unfortunately, that's the minutiae exactly that you have to dive through, is to work your way, clause by clause, or have someone work their way through it for you and tell you what are the highlights, what are the, what does this mean, what are the things that can bet, are likely to be able to be negotiated? What are things that, you know, can't be negotiated or typically are never gonna be, you know, renegotiated by the employer, so that you can make some decisions on what's important. You know, I tell physician clients all the time, "If it's important to you, it better be in the contract," because two years from now, no one's gonna remember what was in important to you or what they said to you, and, you know, employers, administrators and employers change, administrators at hospitals change and what was, you know, what was promised to you or what you think was promised to you, if it's not in writing, it's not there. It's just like documentation in a medical record.\ you know, the first, you've got to look at the medical record first. There may be a whole lot of other things, you know, behind the scenes, but the first place you look is the medical record to figure out what was done with the patient. The first place you look for what you're promised in an employment relationship is your employment agreement.

- Yeah. And so if it's important to you, it should be in writing.

- Yes. And you need someone who can help you walk you through those pieces, because who should also be able to tell you, "Don't spend your time fighting on this particular clause because no one gives in on that," right? No one, no one will, you know, no one gives in on that. So let's focus on this instead, you know, is this important to you? Let's focus on this aspect instead. Deciding who, you know, so working through the contract is one piece, deciding who you want to be employed by, which I think was kind of the second piece of that is, yeah, that's difficult, right? You know, that, again, is one of those that it's not only, am I, is there an opportunity for me to know, if this group or this hospital or this health system or this private equity-backed group is financially stable, that's just due diligence, you know, that's looking at, you know, what information can I find out about them? What is their history? If they're publicly, you know, if they're publicly traded, let me, you know, look at some of that information. After that, it's word on the street, right? It's who do you know and who can tell you, not only is this group stable from a financial standpoint, but is this the culture that I wanna be a part of? That is a huge piece, you know, physician mergers, physician group mergers, typically when those fail and fail early on, it's not a financial issue, it's a culture issue. You know, are these the people that, does this group have the mission that I can support? Are these the people that I wanna spend my time working with, that I'm gonna be spending, you know, my time with? How, you know, what is the culture of that organization? What's important to them as a group? And does that match with what my goals are and objectives are? And that's an important piece. And those interviews, you know, interviews with a group go two ways. It shouldn't just be you being interviewed, you should be interviewing the group and talking to not just the one person in HR from a group standpoint, but talking with leadership and talking with them in a social setting if possible. You know, it's taking the group out, taking the folks out to dinner, and when they're a little more relaxed and talking a little more loosely about the group and about what they, how they work and what their culture is, and then talking to the rank and file folks, you know, get beyond the C-suite if you're talking about, you know, becoming employed by a particular group practice or in a hospital for that matter. Go, you know, if you're talking about being employed by a hospital, go talk to the nurses, you know, don't just talk to the physicians, go talk to the other, to the rank and file nursing staff. They, you know, that's where you learn huge amounts of information, right? And it's the same thing with a physician group. You know, it's talk to the folk, the folks who have only been there for a year, not just the people who have been there for 20.

- And so we do also have a member toolkit, as it goes to contract negotiations that I believe you helped us prepare. So thank you for that very much. That will be available to members, and that information will be available too as part of the follow-up, and I believe in the initial email that we received as well. If I'm wrong, then I'm sure someone will hear about it. And then also, you know, we talked a little bit, another question came in about being unsecured creditors, and as employees or subcontractors, and that applies if APP in fact files chapter 7. If they don't, there's a different route, then it would be individual suit against APP to try to achieve remuneration for back wages and bonuses and that sort of things. So it really does depend on whether or not they file chapter 7 or they don't, correct?

- Correct. Although getting, although, even if you're just suing them and automatically and getting a claim on file, that's gonna at least push you a little different, push you up the chain a little bit in terms of the unsecured creditors, should they file bankruptcy, because they've also got, with these lawsuits and with these claims that are on file. So it does give you a different, a little bit different authority in terms of, or a different little bit power level in terms of being able to address some of those payment issues.

- Thank you. So we're coming to the end of our time together, and I want to make sure that Dr. Kang has a moment to get any closing jabs in, but I can't thank you enough, Laura, for the work that you've done.

- Oh, certainly.

- To prepare the toolkits for the time that you spent with us today, it's incredibly helpful. And our goal was really to, a, dive into some of the meat of the information that we need and then provide some of the empowering routes out of the mess. And you've helped us incredibly with both. So thank you so much, we're very grateful.

- Thank you. Any other last-minute comments that you'd like to add before I hand it over?

- I think just two pieces, I know I've seen a lot of comments rolling through the chat boxes about, you know, the problem with reviewing contracts as an individual, and getting the typical, "Hey, this is the way we," you know, from a potential new group, "this is the way we always do it, this is our contract." No, it's not. I mean, yes, that is everybody's base contract. Of course, people don't want, of course, that's where the negotiations start. You just can't let it stop there. That's always gonna be a response. But, you know, as I've worked with a number of physicians, where we've tried to say, tried to frame up those discussions by saying, "I don't wanna change your base contract. I know that's what you put out there. So now let's talk about my amendment to that." And so that all my private stuff that I've negotiated for me and me alone, that stands above and beyond what's in your base contract is over here on the side so that you can, you group can continue to go out there and say, "This is our contract," right? And so there are ways to work through some of those things. But you're right. If you come in with, as someone else mentioned, if it's four or five of you that are coming in together and saying, "This is what we want in our contract," of course, again, it's strength in numbers. And the last one of, I guess I would just hit on, is the concept that can hospitals who are willing to, can hospitals help with some of the, you know, the back issues of the payment are lost. Of course, they can, that's called a recruitment bonus. So some hospitals that I know are already doing that, they're saying, "I know you didn't get paid for your last six that you worked at this hospital when you were with APP, but now what we're looking at is you coming on potentially as an employee or potentially as an employee of another, the new group that's going to serve us. And from a recruitment bonus standpoint, we're gonna cover those back shifts for you. That's how we're gonna frame up a recruitment bonus." So yes, again, there are opportunities to work through some of those things.

- Thank you.

- And there's just gonna be a lot of challenges and a lot of opportunities, so.

- And a lot of room for negotiation, I love the comment that you closed with is, you know, they're more like guidelines, right? The contract is a place to just, but no contract is written well, one contract is written on a stone tablet, right? The rest of them are on paper, so.

- Right.

- It's a place to begin. So, again, thank you so much. And with that-

- Thank you.

- I'll sign it back to Dr. Kang.

- Thank you very much, Ms. Seng and Dr. Nordlund, for this informative discussion. And I will close on several points, and one of them is, thank you again to our experts as well as the ACEP staff, who many of you, may or may not be aware have been working tirelessly over the last several weeks this situation was first announced to explore all different options, to confirm certain details, whether it's regulatory, legal, financial, state-based, et cetera. Second of all is, I know that right now, it seems like, this has seemed a little bit lacking of clarity, but I won't think informing people of certain definitions of understanding your situation is the first start, and the analogy I like to use is, just like when you see patients clinically, you get a critically ill patient, you may not know all the details, what do you do? You take a deep breath, you see what resources you have, and you work your way through whatever algorithm or whatever process that you wanna do with a patient that's high acuity or critically ill, right now is we wanna make sure that certain definitions, certain important factors such as your contract and certain understandings of your rights and responsibilities are clearly understood because everybody's situation's a little different. We've seen a myriad of questions, both received before this webinar as well as during the webinar. And some of them are more relevant and higher priority than others, it all depends on your situation. And as we sort our way through this, our first goals and our commitment to you is, how do we get the appropriate information, confirm certain details, and then address the things that we believe and you believe are the most important? And that is, somewhere along the way, it is your liability coverage, your rights and benefits, as well as somewhere along the way, pay for past work, but also moving forward. And as more details come and as other parties step up, or other parties do not step up, we'll have additional insight. And this is the first of several steps that we're committed to helping better support all of you. And whether it's gonna be additional webinars, whether there's additional educational resources, where there actually may be more direct support, it comes back to all of your questions and what you share with us, so that we can better guide, what we can do to better support all of you, both in the short and the long term. So in wrapping that up, I'd still have to encourage you, all of you, to continue to be engaged, to continue to go ahead and share information with us. We are listening to you, and we are ready to act on those informations that we receive and that we're able to confirm, not just now, but further down the road, again, in our commitment to your careers and your satisfaction. And with that, thank you very much for your participation and your attention, and looking forward to having further communications in the near future.