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           The corporate practice of medicine has raised new issues in the way that patients pursue medical malpractice actions.  One of those issues involves who to sue.  Obviously, the individual who allegedly provided substandard care will be a target.  However, other entities or individuals may also be subject to suit.  Over the last two decades, more physicians have become employees of medical corporations.  Some of these corporations are for profit, some are not for profit.  Often, a decision on whether to name a corporate defendant is premised on the deep pocket theory.  That is, would the corporate defendant have additional or better ability to satisfy a judgement.  The theory that would render a corporate employer responsible for a judgement against an employed physician is known as respondiat superior.  This theory is applicable to all tort situations where an employee is accused of negligent act while performing the business of the employer.

            A serious legal question involving this issue arose in a recent Kentucky lawsuit.  In that case, an emergent care corporation was sued for the alleged negligence of one of its employed physicians.  A patient was examined by the physician for pain in his foot.  Upon examination, the physician found no foreign objects in the wound and recommended soaking the foot.  He also recommended the patient return for signs of infection.  For eight months, the patient experienced pain and finally returned for further evaluation.  A splinter was discovered and had to be surgically removed.  Apparently, the plaintiff alleged that the initial evaluation was inadequate in that the foot was not anesthetized and therefore was not fully examined.

            The plaintiff sued a doctor whose name appeared in the medical record.  However, it was later discovered that the wrong doctor had been sued, who was dismissed from the case.  The doctor who provided the treatment could not be sued as the Statute of Limitations had expired.  Therefore, the plaintiff sought to continue the suit against the corporation above.  The corporation objected, arguing that its liability could only be premised upon the liability of the physician.  Because the physician could no longer be found liable, the corporation, under its theory, should be immune from judgment as well.

           The trial court and appeals court agreed with this logic and dismissed the case.  However, the Kentucky Supreme Court disagreed.  The Supreme Court reasoned that the liability of the corporation was premised upon the negligence of the physician.  If a jury determined that the physician was negligent, then the employer would be responsible for a monetary verdict, even if the physician was not.  The court sent the case back for trial against the corporation.

            In a recent decision, the Massachusetts Appeals Court set forth the basis upon which a corporation could be held responsible for the acts of its employed physicians.  In Zucco v. Kane, the Appeals Court stated that a medical corporation could only be held liable if it was shown that:

           “…the employer exercised control over the conduct which was deemed to be negligent, that is the provision of care to the Plaintiff.  Thus to prove vicarious liability, there would need to be evidence that the corporation not only provided patients, equipment and support staff for the physician’s practice, but that they actually directed the physician in his care and treatment of that patient. The Court’s have held that another person will seldom exercise this level of control over the details of the physician’s treatment of patients as the profession is distinct and requires a higher level of skill and training.”

 

    By its very nature, the physician must exercise independent judgement in his practice. Thus, in Massachusetts at least, it is quite difficult to satisfy the legal standard for holding a medical corporation vicariously liable for the acts of its health care employees.

                              This issue is likely to be raised more frequently in the future.  It is important therefore, that medical corporations adopt significant risk management programs. There should be a process by which the care provided is reviewed in an organized fashion to ensure quality care has been provided.  Such programs should apply to care provided by all health care professionals in their employ and not just physicians.  Such programs will serve as a good defense for the corporation in the eyes of a jury.


The Corporate Practice of Medicine

by Attorney Frank E. Reardon

August 2002