Court Decides Apparent Agency Cases Concerning Hospital-Based Physicians

The Tennessee Supreme Court issued its first two tort law opinions of the year yesterday, both dealing with the same subject: the potential liability of a hospital for the acts of a non-employed,, hospital-based physician. 

The Court said  that

"to hold a hospital vicariously liable for the negligent or wrongful acts of an independent contractor physician, a plaintiff must show that (1) the hospital held itself out to the public as providing medical services; (2) the plaintiff looked to the hospital rather than to the individual physician to perform those services; and (3) the patient accepted those services in the reasonable belief that the services were provided by the hospital or a hospital employee."

The Court went on to say that  while “[a] hospital generally will be able to avoid liability by providing meaningful written notice to the patient, acknowledged at the time of admission”  there was a genuine issue of material fact whether the plaintiffs had adequate notice of the contractual arrangement between the hospital and the physicians in the two cases.  Thus, it remanded both cases to the trial court, clearing the way for a jury trial on the issue.

This is the language contained in the admission documents in the cases:  "I understand those physicians providing medical services are not agents or employees of the Hospital. This includes but is not limited to: The emergency department physicians and physicians assistants, the anesthesiologists, the radiologists, the pathologists, and the physicians’ [sic] on-call to the emergency department to render specialty services."  (Note:  the quote of the language in the  DeWald opinion stops at the word "radiologists;"  I simply assume that the rest of the language is the same because the hospitals in both cases are HCA hospitals.)  In both cases the person who signed these documents testified they did not read them (both patients came to the facility through the ER).

What is the practical impact of these decisions?  Quite frankly, there is little impact in the vast, vast majority of cases.  First, most of the physicians have more than adequate insurance coverage, and I submit that if insurance policy limits were discoverable in this state it would be very unusual for an agency claim to be asserted against a hospital for the acts of any hospital-based physician other than a hospitalist (who probably will be an employee of the hospital anyway).   Second, hospitals can protect themselves from liability by requiring hospital-based physicians to have adequate insurance coverage.  Third, hospitals will probably  be able to effectively disclaim apparent agency for  non-emergency room admissions because the patients are admitted under circumstances in which they can be reasonably expected to look at the documents. 

The cases are Boren v. Weeks, No. M2007-00628-SC-R11-CV  (Tenn. S. Ct. May 6, 2008)  (read it here) and DeWald v. HCA Health Services of Tennessee, No. M2006-02369-SC-R11-CV (Tenn. S. Ct. May 6, 2008) (read it here)

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