Steps to Take When Handling Closures and Layoffs During the COVID-19 Pandemic

Written by Sarah Lim Lic# 0M52397

In light of the COVID-19 pandemic, many physician practices are trying to figure out how to handle their contracts with their employed physician(s) and staff.  Not all practices have been required to close but many have canceled or postponed elective procedures and non-emergency visits.  Even those who are still continuing to practice and offer patient services are experiencing considerable reductions in the number of patient visits and revenue.

If you are a practice that is struggling, the following steps will help you manage any necessary closures and layoffs:

REVIEW YOUR PRACTICE CONTRACTS AND POLICIES

By reviewing your current contracts and policies, you will familiarize yourself with obligations that relate to scheduling and compensation.  Not all contracts are the same so be sure to know which employees have them, and the differences between each contract.

MAKE A DECISION AND CREATE A TIMELINE

You need to think about whether or not you should close the practice and if so, will it be permanent or temporary?  You also need to create a timeline that includes deadlines for when these decisions need to be made.  If you decide to continue operating, you will need to consider the following:

·      Will you lay off any employees?

·      Will you cut hours?

·      Whatever the decision is, what is required to follow through? 

COMMUNICATE WITH YOUR EMPLOYEES

It might surprise you to find that your employees are much more flexible than you previously anticipated.  By working with them, you may be able to negotiate terms based on what their current needs are.  Some may accept lower pay or fewer hours.  Others may be willing to temporarily give up compensation as long as their benefits are kept in place. 

BE FAMILIAR WITH STATE UNEMPLOYMENT OPTIONS

There are special unemployment options that many states are providing for those who have been laid off or had their hours cut because of the pandemic.  By understanding the different kinds of support that are available in your state, you can help ensure that the employees are receiving the maximum support they need. 

CHECK YOUR RESOURCES

Research into what resources are available to your practice.  Organizations like the Small Business Administration (SBA) are providing assistance in many states.  Some banks are making it easier to draw on lines of credit and take out loans. 

PREPARE TO SURVIVE THE UPCOMING MONTHS

Consider all the different ways your practice can survive the weeks and months ahead.  One way to help keep your patient volume is to offer telemedicine services that offer flexibility and safety for both the patients and providing physicians.  Depending on what kind of services you provide, you may be able to offer home visits, or even office visits by limiting the available services in order to make your patients feel secure in the office. 

CHECK YOUR COVERAGE IN YOUR INSURANCE POLICIES

Your insurance policies, whether it be for professional liability or general liability, will tell you important details on what is covered and what is not.  Some business owner policies include coverage for Business Interruption which covers the loss of income due to a catastrophe that disrupts the operation of the business.

RE-EXAMINE YOUR EXPENSES

Evaluate what your current expenses are and see if you can either reduce or eliminate it altogether.  For instance, if you have a benefit pension plan, consider temporarily freezing the accrual of benefits or adjusting the benefit formula to decrease future contributions. 

Please keep in mind that the current situation is constantly changing and any available guidance can be updated or revised at any time.  The one constant thing you can do is check with counsel and stay up to date on what your state and our government are doing to help medical practices survive these turbulent times.