EMPLOYEE SERVICE DETERMINATION

Southern Pacific Transportation Company

Nurse Consultants

This is the determination of the Railroad Retirement Board

concerning the status of nurse consultants who performed services

for Southern Pacific Transportation Company (BA No.1713) (SPTC) as

employees under the Railroad Retirement Act (45 U.S.C. §231 et

sea.) (RRA) and the Railroad Unemployment Insurance Act (45 U.S.C. 

§351 et sea.) (RUIA).

Background

The Board's Division of Audit and Compliance conducted an audit of

SPTC to determine the accuracy of creditable compensation and 

service reporting under the RRA and the RUIA. The nurse

consultants were identified through a review of IRS Forms 1099

"Miscellaneous Income" and accounts payable invoices issued by SPTC 

to individuals treated as independent contractors. Because the

audit found that those individuals worked for SPTC for extended

periods of time on SPTC property, the question was raised as to

whether they were properly classified as independent contractors.

SPTC's comments on the coverage report relating to the nurse

consultants are noted in the discussion below.

The scope of the investigation was limited to obtaining an 

understanding of the services performed by the consultants and 

determining the number of individuals involved, the amount of

compensation paid during calendar years 1991 and 1992, the

period(s) of time services were provided, and whether the

consultants performed service for other clients, as well as to

obtain any other information necessary for the Board to make a

coverage determination.

Information Gathered About Nurse Consultants

SPTC employs nurses as nurse consultants to provide medical

services to sick, disabled or injured employees of the railroad or 

its subsidiaries to assist them in medical and/or vocational

rehabilitation. An Appendix to the agreement that each consultant

has with SPTC sets forth the services to be provided by the

consultant. The nurse consultants provide the following services:

1. Assistance to employees of the Railroad and/or its

subsidiaries for medical referrals and consultations.

2. Assistance to treating physicians in the monitoring of

home exercise and explaining medical conditions to

employees of the Railroad and its subsidiaries.

BCD 1996-8 BA # 1713
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Southern Pacific Transportation CompanyNurse Consultants

3 . Assistance in the establishment and ongoing relationship

between the Railroad and/or its subsidiaries and medical

facilities for urine and toxicological testing.

4. Assistance to the Railroad's Medical Department to obtain

pertinent medical evaluations, and request, obtain,

review and retain medical reports and documents,

including diagnostic tests.

5. Liaison between management, employees, and the Railroad

medical department.

6. Visitation of sick, disabled or injured employees of the

Railroad and/or its subsidiaries to assist them in their

medical and/or vocational rehabilitation.

7. The provision of assistance to physicians and medical

facilities in providing consultants, transportation, and

other medical services requested by the Railroad, 

authorized treating physicians, or facilities.

The nurse consultant's agreement provides that services "shall" be

performed "a maximum of 4 0 hours per week" and a maximum of 5

business days per calendar week. The agreement contains a

provision that requires prior clearance from SPTC's Chief Medical

Officer's office in San Francisco before the nurse consultant is

permitted to work any additional days beyond the stated maximum.

Nurse consultants interact daily with sick or injured employees, 

conduct medical and safety training programs and update supervisors

on the status of employee medical conditions and determine possible

dates employees can return to work. Nurse consultants also meet 

regularly with other SPTC employees in the claims, operating,

maintenance of way, safety, and superintendent's offices, and with

attorneys handling settlement of employee injury claims.

SPTC employed the services of nine nurse Consultants during the

calendar years 1991 and 1992 . All but one of the nine nurse

consultants currently provide service to SPTC. Many of those

individuals have provided service in prior and subsequent years.

SPTC has used nurse consultants from 1976 through the present. The

nurse consultants surveyed by the Division of Audit and Compliance

have worked for SPTC from a minimum of four years to a maximum of

18 years.

Most nurse consultants surveyed work on SPTC property or property

leased to SPTC or one of its subsidiaries. At some locations,
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Southern Pacific Transportation CompanyNurse Consultants

office space is shared or adjacent to the claims department. SPTC 

commented that seven of the nurse consultants employed by SPTC 

provide services for other clients. SPTC also stated that many of

the nurse consultants work only part time for SPTC. SPTC stated

further that the nurse consultants are not required to perform

their services on SPTC property. SPTC stated that the nurse

consultants are provided office space if available and that some 

work exclusively out of their own places of business.

The nurse consultants indicate that they follow a work schedule or 

routine which coincides with the work hours of SPTC. The majority

of nurses work from 8 A.M. to 5 P.M. on Monday through Friday. 

Three nurse consultants indicated that they are on call 24 hours a

day, 7 days a week for medical emergencies. SPTC commented that 

nurse consultants set their own hours and that full-time work is

not required. SPTC also stated that the company does not ask

anyone to be on call for 24 hours.

Nurse consultants complete and maintain the following information

and reports:

1. "Nurse Consultant Expense Reports," which detail by date 

the employee contact, services provided (e.a.. hospital,

home visit, drug screen), conferences attended, claims

department personnel contacted, travel time, hours

worked, mileage and expenses.

2. Medical records on injured workers from time of injury to

conclusion of medical treatment.

3. Medical management reports of patients seen and 

treatments provided.

4. Records detailing the treatment and medical progress of

employee disability injuries.

5. Records relating to the collection of specimens for drug

toxicological testing.

6. Records relating to contacts with facilities and medical

providers regarding employee medical problems.

7. E-mail to San Francisco Office Medical personnel, SPTC

officers, and "RTD" Drug Testing.

8. Monthly reports to the Medical Director outlining goals

for each disabled/injured worker.
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Southern Pacific Transportation Company

Nurse Consultants

9. Quarterly listings of on-duty injuries.

10. Processing and approval of employee medical bills paid by

Travelers Insurance Company.

11. Entry of information into SPTC Wage Continuation System

for reporting purposes.

Nurse consultants indicated that they follow SPTC's Medical

Department operating instructions and procedures when performing

their work. Examples of procedures followed include:

1. the processing of wage continuation claims;

2. the approval and processing for payment of employee

medical bills to Travelers Insurance Company;

3. procedures relating to expense reimbursement; and

4. procedures concerning the preparation of weekly and 

monthly reports.

Nurse consultants receive training and instruction from the

Director of SPTC's Medical Department, Ms. Patricia Boynton. They

also attend in-service training classes sponsored by the medical

department, participate in periodic medical management meetings and 

seminars with employees of the claims, legal and other departments

within SPTC. Two nurse consultants were found to write articles

for the Medical Department's Newsletter "Health Trax" and are shown

in the credits section of the newsletter to be principal

contributors. SPTC commented that the training provided by SPTC to

nurse consultants is minimal and not required. SPTC stated that

some nurses are required by state law, and not by SPTC, to attend

educational sessions to maintain their professional licenses.

Nurse consultants assist in training and seminar programs for SPTC 

employees in the areas of hearing conservation, drug screening, 

CPR, first aid, safety and medical management meetings. SPTC 

commented that nurse consultants never conduct drug screening, 

seminars in drug and alcohol abuse programs, CPR training, or 

safety or first aid meetings. SPTC stated that nurse consultants

occasionally assist in safety classes by explaining medical terms 

or arranging for another outside provider to be an instructor.

SPTC also commented that some nurse consultants assist in hearing

conservation programs by answering medical questions for

technicians or employees.
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Southern. Pacific Transportation CompanyNurse Consultants

All nurse consultants surveyed by the Division of Audit and 

Compliance responded that they only work for SPTC and do not

provide services to any other clients. Nurse consultants indicated

that they report to and are directly supervised by Ms. Patricia

Boynton, Director of the Medical Department. Prior to being

supervised by Ms. Boynton, they were supervised by the former

medical director, Dr. Hyder.

SPTC provides all equipment, materials and supplies used by nurse

consultants. SPTC provides office furniture and equipment,

telephone and telephone answering machines, pagers, nationwide 800

telephone numbers, fax machines, computers, computer software, 

postage, printing and medical supplies used in the performance of

their duties. Nurse consultants are reimbursed by SPTC for

supplies purchased on their expense reports. In addition, SPTC 

provides office space, parking and cafeteria facilities. SPTC

commented that any nurse consultant who has a mobile telephone

provides it at her own expense. SPTC also commented that nurse

consultants are not reimbursed for computers and that neither

computers nor software are provided to all nurse consultants. SPTC

stated that if an 800 number is provided, it is for the convenience

of SPTC employees contacting the consultants.

Seven of the nurse consultants surveyed indicated that they are not

incorporated. Only one individual was incorporated, but stated

that all billings submitted for payment of services were in her own

name. None of the nurse consultants advertise their services in

any nurse registry or trade publication.

Nurse consultants have SPTC business cards showing their position

as Medical Consultant and are listed in the SPTC telephone book.

The Division of Audit and Compliance stated that its audit

information indicated that nurse consultants have participated in

SPTC safety award programs, receiving watches, shirts, gift 

certificates, jewelry, etc. SPTC commented that the company has no

knowledge of any nurse consultant participating in an SPTC safety

program and therefore receiving any type of award.

Review of Forms 1099 "Miscellaneous Income" issued by SPTC for the

calendar years 1991 and 1992 show that nurse consultants were paid

compensation exceeding $307,000 in 1991 and $350,000 in 1992 .
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Southern Pacific Transportation CompanyNurse Consultants

Discussion and Conclusions

Section 1(b) of the RRA defines the term "employee" to mean "any

individual in the service of one or more employers for

compensation." Section 1(d)(1) of the RRA provides in pertinent

part that an individual is in the service of an employer if:

(i)(A) he is subject to the continuing authority

of the employer to supervise and direct the manner of

rendition of his service, or (B) he is rendering

professional or technical services and is integrated into 

the staff of the employer, or (C) he is rendering, on the 

property used in the employer's operations, personal

services the rendition of which is integrated into the 

employer's operations. [45 U.S.C. §231(d)(1)(i)].

Section 1 of the RUIA contains essentially the same definition.

The information summarized above indicates that two of the

definitions of employee [those in sections 1(d) (1) (i) (A) and (B) ]

might apply to the nurse consultants. First, the Board finds that 

the definition in section 1(d) (1) (i) (A) applies to the nurse

consultants because the evidence indicates that those consultants

are subject to the continuing authority of SPTC to supervise and

direct the manner in which they render their services.

Specifically, the contract that SPTC enters into with the nurse

consultants sets a maximum number of hours and business days that 

the consultants may work and requires the consultant to obtain

prior clearance from the company's Chief Medical Office before

working any additional days. Moreover, the nurse consultants

follow a work schedule that coincides with the work hours of SPTC.

The majority of nurses work from 8 A.M. to 5 P.M. on Monday through

Friday.

In addition, the nurse consultants follow SPTC Medical Department

operating instructions and procedures when performing their work.

Nurse consultants receive training and instruction from the

Director of SPTC's Medical Department. Perhaps the single most 

important fact is that the nurse consultants indicated that they

report to and are directly supervised by, Ms. Patricia Boynton, 

SPTC's Director of the Medical Department, and that prior to being

supervised by Ms. Boynton, they were supervised by the former

medical director, Dr. Hyder.

The evidence gathered thus clearly indicates that the nurse

consultants are subject to the continuing authority of SPTC to

supervise and direct the manner of rendition of their services.
Southern Pacific Transportation CompanyNurse Consultants

The Board therefore concludes that the nurse consultants were and 

are employees of SPTC within the provisions of section

1(d)(1)(i)(A) of the RRA.

The evidence also shows that the nurse consultants fall within the

definition of employee set out in section 1(d) (1) (i) (B) of the RRA.

The Board finds that the services provided by those consultants may

be considered to be professional services in that those services

consist of specialized work which can be performed only by

individuals who have had particularized training and education.

The Board also finds that the consultants are integrated into the

staff of SPTC for a number of reasons. First, SPTC employs the

nurse consultants to provide medical services to sick, disabled, or 

injured employees of the railroad or its subsidiaries to assist

them in medical and/or vocational rehabilitation. Most of the

nurse consultants surveyed by the Board's Division of Audit and 

Compliance work on SPTC property or property leased to SPTC or one

of its subsidiaries. The nurse consultants work a schedule which

coincides with the work hours of SPTC. They complete and maintain

a variety of information and reports concerning SPTC's employees

with injuries and/or medical problems. Nurse consultants interact

daily with sick or injured employees, conduct medical and safety

training programs and update supervisors on the status of employee

medical conditions and determine possible dates that employees can 

return to work. In addition, nurse consultants meet regularly with

other SPTC employees in the claims, operating, maintenance of way,

safety, and superintendent's offices and with attorneys handling

settlement of employee injury claims.

The nurse consultants follow SPTC Medical Department operating

instructions and procedures when performing their work. They

attend in-service training classes sponsored by the medical

department and participate in periodic medical management meetings

and seminars with employees of the claims, legal, and other

departments within SPTC. Two of the nurse consultants write

articles for the Medical Department's newsletter and, in fact, are

listed as principal contributors. Nurse consultants assist in

training and seminar programs for SPTC employees. SPTC provides

equipment, materials, and supplies used by the nurse consultants.

Further, nurse consultants have SPTC business cards showing their

positions as Medical Consultants and are listed in the SPTC

telephone book.

The Board finds that the evidence overwhelmingly demonstrates that

the nurse consultants function as an integral part of the medical

department of SPTC and that they are integrated into the staff of

SPTC. The Board therefore finds that the nurse consultants are
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Southern Pacific Transportation Company

Nurse Consultants

employees of SPTC within the meaning of section 1(d)(1)(i)(B) of

the RRA.

k h.

V.' M. 6peakman, Jr.

<7

(Jerome F. Kever