Petition urges reinstatement of Michigan physician terminated after contract impasse

A physician is being terminated "without cause" after she and Munising (Mich.) Memorial Hospital failed to agree on a new contract, the hospital said April 26. 

Chelsea Ray, MD, worked at the hospital six years and was relieved of patient care responsibilities as of April 25. She will receive full pay and benefits for the next 90 days pending expiration of the contractual notice period.

Now, a petition is calling for Dr. Ray's reinstatement, claiming that the physician emailed questions and concerns on March 23, but never received a response or a meeting she suggested. As of 2 p.m. CT April 28, the petition had 7,525 signatures. 

The decision to terminate Dr. Ray "was driven by legal rules for physician compensation to which we, as a tax-exempt hospital, are subject," rather than by Dr. Ray's quality of care or work ethic, the hospital said in a news release. 

"Following independent comprehensive analysis of her compensation package by a national consulting firm with special expertise in small and rural hospitals, our business advisers recommended adjustments, not only to Dr. Ray’s contract but also to our physician-compensation structure generally," said Munising Memorial. "Out of respect for the parties' privacy, we cannot comment on the detail."

Munising Memorial said Dr. Ray is, by far, the most highly paid employee at the hospital, and rejected what the hospital viewed as a fair and generous contract for a family physician in Michigan's Upper Peninsula. The contract offered a higher base salary and determined her performance compensation using the relative value units calculation method. The hospital cited fair market value legal requirements which implicate its nonprofit tax-exempt status and Medicare funding as explanation for the adjustments.

"Were it not for the legal constraints placed on the hospital under federal and state law, this is not the path the hospital would have chosen," Munising Memorial said. "Dr. Ray has been a respected provider on the MMH team for the past six years, and she will be missed."

Dr. Ray told WLUC she learned she was being terminated during an emergency meeting with the CEO, and she was surprised by the news.

"I really felt like I had what I was looking for, and I had no plans to leave Alger County," she told the TV station. "I would have worked there until I was 80."

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