Abrupt St. Vincent's shutdown leaves legal questions for laid-off physicians and staff

Despite the slow and public demise of Manhattan's St. Vincent's Hospital, the abrupt shutdown has lawyers looking to resolve some surprise loose ends on behalf of the hospital's some 3,500 former employees.

First, as the Wall Street Journal reported yesterday, hundreds of laid-off physicians are worried about malpractice coverage for future claims that may arise for care they provided before the hospital's close. Adult patients usually have 2.5 years after treatment to file a claim for malpractice, and 10 years for cases involving children, the newspaper points out.

Neil Maxwell, an attorney for the doctors, said that despite ongoing negotiations, lawyers have been unable to get the bankrupt hospital to turn over policies to determine who is covered and how long the policies extend.

Displaced physicians, many of whom do not have job offers, would have to pay roughly $40,000 per year for individual malpractice coverage.

And as for the hospital's entire work force, it seems that St. Vincent's mass layoffs resulting from the shutdown may have violated the federal and state Worker and Adjustment and Retraining Notification (WARN) Acts, according to law firm Klehr Harrison Harvey Branzburg LLP.

The statutes require that employers give 60 and 90 days, respectively, advance notice of any closure or mass layoff. The penalty for failing to give such notice is wages and benefits that the employee would have been entitled to during the notice period. St. Vincent's notified employees of the closure on April 7, laid off 1,000 workers on April 19 and shut its doors for good April 30.

"We have spoken with several employees and union representatives," said Charles A. Ercole, a partner with Klehr Harrison Harvey Branzburg. "We are continuing our investigation and intend to file a class action lawsuit or class proof of claim in the bankruptcy court."

To learn more:
- read this Wall Street Journal article (reg. req.)
- here's the Klehr Harrison Harvey Branzburg statement
- check out this New York Times blog post from last month

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