SCGhealth Blog

Provider visa payments may fall on employer when it chooses lawyer to file the waiver

Wednesday, October 22, 2014

Federal law is silent, when it comes to the J1 visa required to hire a non-immigrant foreign medical graduate, about whether the cost of the visa needs to be borne by the practice doing the hiring or by the physician seeking the job.

But a recent ruling made by the U.S. Appeals Court for the Sixth Circuit suggests that when it is the employer who furnishes the attorney and/or the guidance needed to get the visa, then the employer should bear the cost. 

While the ruling currently applies only to sixth circuit states of Kentucky, Ohio, Michigan and Tennessee, it has led to concerns that the Department of Labor or the U.S. Citizenship and Immigration Service may move to make it a rule that applies across the country.

The ruling comes from the case of Kutty v. The United States, involving Dr. Mohan Kutty, a physician with designs on opening a series of group practices in the South that would be staffed primarily with J1 physicians.
Kutty, who operated under a series of corporate identities, helped 17 physicians obtain J1 waivers based on a promise of employment. Most were to be paid $80,000 a year, and could be terminated at will, but had to commit to Kutty for 40 hours a week for at least three-to-five years. 

Kutty referred the physicians to associates and an attorney both for assistance with the J1 visas, as well as hardship waivers that would allow the providers to stay in the country longer. A J1 visa typically requires a physician to return home for two years following the completion of medical studies before trying to return to the United States.

Waivers are available, however, when a state or federal agency intercedes on behalf of the physician. Because these physicians would practice in health professional shortage areas, there was an interest in keeping them beyond the customary J1 visa departure date.

Unfortunately, the employment arrangement between Kutty and the physicians fissured, which is most of the reason why you’re reading this now. Kutty was running out of money to run his group practices, and upon visiting the sites found that many of the physicians were absent.

Based on these visits, he attempted to order them to work extended hours, even though many argued they were rounding at the hospital at the time of his visits. For others, he docked their pay until their productivity increased.

As a result, the physicians retained an attorney and demanded back pay. A number of them were ultimately fired, which spawned this lawsuit.

The rest of the case holds relatively little interest for most other group practices. As it turns out, these physicians were entitled in many cases to back pay. Kutty also tried to represent himself at one point, which seems to have ended dismally. 

The key takeaway, however, is that hiring immigrant physicians may come at a higher cost to the practice than anticipated.

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