35 HMG doctors file lawsuit against company after unexpected furloughs, patients left scrambling for care

Updated: Apr. 22, 2020 at 8:32 PM EDT
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CHARLOTTE, N.C. (WBTV) - Last week, a Mecklenburg County Superior Court judge ordered Holston Medical Group to release contact information so patients could reach doctors who were unexpectedly furloughed earlier this month.

At the beginning of April, 21 of the 35 doctors who planned to part ways with HMG later this year were furloughed by the company. HMG also closed 10 of the 14 offices it opened in North Carolina at the beginning of 2019.

Patients like Deborah and Michael Reif were caught off guard by the closure and terminations.

“No letters, no explanation, no phone calls. We received nothing,” Deborah Reif said.

The Reifs were first patients at Novant Health but followed their doctor when the group of then-Novant Health physicians left the practice for Holston Medical Group at the beginning of 2019.

Holston Medical Group is a practice based in Tennessee. It opened 14 offices in North Carolina including three urgent cares facilities, family practices, and OB/GYN offices.

Three days after the physicians who left Novant Health for HMG were notified of their last day of practice, they filed a lawsuit against HMG for a breach of contract.

In the complaint filed in Mecklenburg County Superior Court, the doctors say HMG failed to provide them with adequate staffing, a proper electronic medical record system, a working telephone system, and they say there was an initial delay in necessary personal protective equipment.

Nearly a year after HMG opened its North Carolina offices, the North Carolina doctors say 47 staff members were laid off and two out of the three urgent care facilities were closed. Without the proper staffing to treat patients, on March 4 the 35 doctors notified HMG of their intent to leave the practice on September 6. They gave the medical group six months notification as required by the employment agreement they signed.

On March 27, CEO and President Scott Fowler sent the 21 doctors a letter notifying them they would receive salaries and benefits until September 6, but their last day of caring for patients on behalf of HMG would be April 3.

The doctors filed a lawsuit against HMG claiming the furlough and preventing them from treating patients is a breach of their employee agreements. The doctors filed a motion to issue a restraining order and preliminary injunction against HMG.

In response, HMG’s counsel issued a Notice of Removal regarding the doctors’ lawsuit. According to an affidavit written by Fowler, he places blame on the doctors and the COVID-19 pandemic for the unexpected closures and furloughs.

According to Fowler, HMG suffered net losses of more than $1 million each month since it opened offices in North Carolina. He says the doctors in charge of integrating the North Carolina practices with HMG did not follow HMG standards.

Fowler says due to financial loss, HMG began negotiations in the summer of 2019 to partner with Atrium Health. However, the negotiations stalled and financial losses each month continued.

HMG says negotiations with Atrium Health stopped because the two doctors who lead HMG’s North Carolina operations began negotiating with Atrium Health separately. Fowler claims the two doctors formed three limited liability companies to form a private practice that would be in direct competition with HMG.

Due to continued financial loss, Fowler says HMG laid off staff members and closed two of its three urgent care facilities in North Carolina in January 2020. When the COVID-19 pandemic hit, Fowler claims business at its North Carolina offices drastically decreased. As a result, HMG sent letters to 21 of the 35 doctors listed in the lawsuit. The letter notified the doctors that they would be furloughed and starting April 3, they could no longer see or treat patients. HMG also issued 90-day notices to some nurse practitioners and terminated or furloughed certain at will employees.

Patients, like the Reifs, say they were left in the dark. They say they tried to call the numbers HMG listed on its doors but struggled to get answers.

“I said this is not a restaurant that I’m calling about this is a medical facility, people have visits the week after they closed their doors, what are they supposed to do?” Deborah Reif said.

On April 14, a Mecklenburg County judge ordered HMG to release contact information for furloughed physicians to any patient who requests it. The judge also permitted physicians listed in the lawsuit to contact their patients.

WBTV contacted HMG about patient concerns. A spokesperson responded with the following:

“Regarding your questions, yes, there were plans and considerations made by HMG to help offer every path available for patients to address immediate care needs. For background around the doctors’ departure from HMG along with the office closures and resulting layoffs from COVID-19 a full statement is available here: https://holstonmedicalgroup.com/ncpatients. All information regarding options for patients should they have an immediate need as well as those looking to transition their care are also available through the link above.

HMG conducted phone outreach over the past several weeks to patients with scheduled appointments, and is continuing that effort until all patient care needs are addressed. Patients have also received letters in the mail with these continuing care options outlined.

Most importantly, we want to note that we have also set up a process with Novant for any patients that require immediate care - including, and especially for OB patients. Those OB patients simply need to call 704-316-4830, and primary care patients can call 704-384-1729.

HMG provided several options for patients to reach out with questions, or for support, with the primary focus on ensuring that patient needs are met and helping direct them to the best available resources. We understand that phone wait times have been longer than normal at this time and are doing our best to manage every caller's needs in a reasonable time.

Patient records are available through an online tool we created, available here: https://www.holstonmedicalgroup.com/medical-records-release-form/, or through a call to 423-857-2772, but are not being transferred to Novant unless requested by the patient.”

According to court documents, it appears the providers listed in the lawsuit will operate under a private practice known as One Health. Emails made public in the court documents reveal attorneys for One Health plan to negotiate a partnership with Atrium Health.

Representation for HMG stated in court documents the company plans to file a counter suit.

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