Often, hospitals and EPs are named jointly in malpractice litigation. The EP defendant’s status, as either a hospital employee or independent contractor, can determine whether the hospital is liable.

“A hospital’s potential liability when named in a suit along with an ED provider can vary due to a number of factors,” says Megan Kures, JD, director at Hamel Marcin Dunn Reardon & Shea in Boston.

If the EP is an employee, plaintiff’s counsel usually will proceed under a respondeat superior theory of liability. “This typically requires the plaintiff to prove that the provider was acting within the scope of his or her employment at the time of the negligence in question,” Kures explains.

In some jurisdictions, many hospitals are charitable corporations with statutory protections in the form of caps on damages. “Some counsel will make a strategic decision not to name the hospital due to application of the cap and the possibility that the jury might find against the hospital rather than the provider,” Kures says.

Whether the EP defendant is legally considered to be an independent contractor or an employee is not always clear. “There may be an entire separate legal analysis that goes into that determination,” Kures says. Courts may consider:

  • the language of any applicable agreement;
  • the degree of control that the hospital exercises over the provider;
  • how benefits are handled;
  • how patients are assigned;
  • how schedules are made.

“Nurses, nursing assistants, social workers, therapists, and other non-physician providers are more likely to be legally defined as employees than physicians,” Kures says.

EPs are less likely to be subject to the direct control of the hospital because they have to exercise independent judgment in treating patients based on their education, training, and experience. “For example, a hospital is not going to have a specific policy that tells a physician how he or she should treat a patient with a fractured tibia,” Kures explains.

Other providers may be more likely to be subject to specific policies and procedures that guide their clinical interactions with patients. For instance, a written policy that instructs a nurse how to insert an IV may exist.

EPs also are more likely to have a direct say in their schedules, shifts, and time off compared to other non-physician providers. “These factors may push against a finding that the physician is controlled by the hospital,” Kures notes.

If the provider is not an employee, then a plaintiff will find it difficult to proceed under a respondeat superior theory of liability against the hospital, Kures offers. This is true, although there may be a claim against a different entity or a different theory of liability. If the EP is not an employee of the hospital in question, he or she might be an employee of a different corporate entity or practice group. “The plaintiff may elect to then go after that entity or group,” Kures notes.

Frequently, issues related to the EP’s employment status are sorted out in the discovery phase of the case. “At this time, you may see amended pleadings filed to reflect the legally accurate status of the defendants,” Kures adds.

Whenever an EP or a physician assistant (PA) employed by a staffing company is named in malpractice litigation, it’s a safe bet to assume the hospital will be named, too. “The presumption is that the hospital is vicariously liable for the actions or inactions of the ED provider,” says Jason Newton, senior vice president and associate general counsel at Medical Mutual in Raleigh, NC.

If the EP is a hospital employee, it increases the hospital’s liability exposure for vicarious liability related to the alleged negligence of the EP defendant. If the EP is an independent contractor, the opposite is true; the hospital’s exposure for the EP’s alleged negligence decreases, Newton says.

State law determines whether the EP is legally viewed as a hospital employee or independent contractor. Newton says courts consider many factors, including (but not limited to): billing structure, verbal and written patient instructions, insurance coverage, and contract language.

Hospital administrators may believe using independent contractors in the ED limits the facility’s exposure in malpractice cases. However, Newton cautions this often is not true because hospitals didn’t conduct due diligence up front.

Newton says hospitals can limit their liability by writing contracts carefully. He recommends contracts spell out several stipulations, including (but not limited to):

  • facility cannot fire the independent contractor without cause;
  • hospital pays fixed prices for independent contractor services rendered;
  • independent contractor uses separate billing for services rendered;
  • independent contractor can work at other facilities and treat other patients;
  • hospital forfeits supervisory rights;
  • facility does not dictate number of vacation and sick days;

When it comes to determining the EP defendant’s status as employee or independent contractor, the patient’s perception “definitely weighs into the equation,” Newton says, noting that courts often focus on what the patient believed about the EP’s employment status.

Typically, plaintiffs claim they did not see signs nor read the details of consent forms, which they signed while in the ED anyway. Newton says it is vital that hospitals ensure patients understand clearly that an independent contractor is not a hospital employee, which means the hospital is not liable for that contractor’s care.

To make it more difficult for plaintiff attorneys to argue that the patient thought the EP was an employee, Newton suggests hospitals hang colorful signs with large font in many places, including triage, treatment areas, and waiting rooms.

Newton suggests this sample wording for such signage: The emergency physicians who staff the ED at the hospital are not employees of the hospital. They are independent contractors. That means they have their own liability insurance and the hospital is not responsible for any action or inactions in which the patient is dissatisfied. The emergency physician will send the patient a separate bill.

Other tactics include:

  • Direct independent contractors to wear name tags or badges without the hospital’s name or logo;
  • Do not assign independent contractors email addresses that contain the hospital’s domain name;
  • In all authorizations and consents, list the independent contractor’s employer;
  • In any information available to patients online and in printed form, avoid any “team” references when highlighting services that include services independent contractors provide.

Newton says a team-oriented statement used for marketing purposes, such as “Our emergency physicians are the best in the business,” may be used against the hospital. This is because it allows the patient to argue that it sounded like the EPs were hospital employees. Even with all these measures in place, Newton says an administrator should assume his or her facility somehow represented itself as the provider of all care, thus putting legal responsibility on the facility. The hospital can reduce this likelihood if it can prove evidence to the contrary existed at the time the patient received treatment in the ED. These include dated photos of the signage that was posted and the patient’s signature on informed consent or care authorization forms, with the independent contractor language initialed.

It’s also important for the EPs who are independent contractors, and the companies that employ them, to make this distinction. If the hospital is deemed vicariously liable, in actions in which the hospital really should not have been named as a defendant to begin with, “the hospital will then threaten to revoke the contract of the emergency medicine staffing company or will want the litigation settled to avoid hospital exposure,” Newton warns. Thus, both the hospital and ED staffing company have a vested interest in making sure the relationship is clearly delineated. Ideally, says Newton, “there can be no ambiguity when a court looks at what the patient would have signed or seen before treatment.”

SOURCES

  • Megan Kures, JD, Director, Hamel Marcin Dunn Reardon & Shea, Boston. Phone: (617) 482-0007. Email: MKures@hmdrslaw.com.
  • Jason Newton, Senior Vice President/Associate General Counsel, Medical Mutual, Raleigh, NC. Phone: (919) 878-7603. Fax: (919) 878-7592. Email: Jason.newton@mmicnc.com.