Hospitals & Other Health Care Institutions

Medical malpractice claims are not limited to individual physicians,physicians; they may also be made against business entities like hospitals and managed care organizations. Like any malpractice claim, a lawsuit against a hospital must meet all the elements of an action for negligence. The key questions in a suit against a hospital are chiefly in the duties owed to the patient and the theory of liability against the hospital or organization. A hospital owes a duty of reasonable care to its patients and is liable for the actions of its employees. This analysis, however, can be complicated where the practicing physician is not a direct employee of the hospital. There are also circumstances where a hospital can be liable for refusing to treat an individual. Managed care organizations, such as HMOs, can also be held liable for some acts of malpractice, but liability can often be cut off under federal law.

Medical malpractice claims against hospitals are subject to all the ordinary elements of negligence claims. A plaintiff must prove the defendant hospital had a duty, breached the duty, that the breach was the factual and direct cause of the injury, and that the injury caused damages. One of the common issues in suits against hospitals is the duty owed to the patient. It is generally recognized that hospitals owe a general duty of reasonable care to their patients, and in accordance with certain industry standards and governmental regulations. Deviation from customary standards or failure to follow regulations is evidence of a breach of duty.

Hospitals are also liable for the acts of their employees. In addition to regular claims of negligence (slip and fall or other ‘normal’ personal injury claims), a hospital can be liable for the medical malpractice of its employees. A breach of medical duties—discussed in Medical Malpractice Part One and Two—can be imputed to the hospital if the practitioner is an employee. The employees of a hospital often include nurses, its paramedics and EMTs, and its paid resident physicians. Private physicians who merely contract with the hospital are independent, and so a hospital is generally not liable for their acts.

Under certain circumstances, a hospital can be vicariously liable for the acts of an independent physician. Depending on the extent of its involvement, a hospital can be liable for the malpractice of an independent physician if the hospital lends use of its nurses or other practitioners to the physician. If a hospital sustains the appearance that an independent physician is a hospital employee then vicarious liability may attach. Such an appearance may be sustained if the hospital presents independently contracted services as routine hospital work. For instance, a hospital could be liable for an independent contractor who manages the hospital’s emergency center. A hospital can also be held liable for the negligent procurement of staff or the negligent provision of facilities. In other words, a hospital can be negligent by failing to properly train or screen employees, or maintaining substandard or inadequate facilities.

Apart from its duties for the provision of medical care, hospitals have certain duties in relation to offering or denying treatment. The common law traditionally does not impose a duty on any individual or entity to come to the aid of a person. Under this kind rule, a hospital only owes duties to persons individuals once medical treatment has been initiated. There are, however, exceptions to the general rule.

Generally speaking, hospitals are required to screen and stabilize persons with medical emergencies regardless of their ability to pay. Under federal law, hospitals that participate in the Medicare program are generally required to provide medical screening and emergency treatment to people who come to the hospital. This rule only applies to hospitals with emergency centers.

A person arriving at an emergency center is typically owed two duties by the hospital. A hospital is first under a duty to provide appropriate medical screening given the patient’s circumstance and the hospital’s facilities and capabilities. Appropriate screening is sufficient if it determines whether a patient is stabilized and is what would be provided to any other paying patient. If there is an emergency the hospital is under a second duty to provide sufficient care to stabilize the patient. Stabilizing treatment is sufficient if a person would not suffer further deterioration of their health by transfer to another hospital or institution. Such care is owed until the patient stabilizes. This duty can become difficult to work out when there is little chance of the patient’s recovery or when the stabilizing process is very long-term treatment.

Managed care organizations (MCO), like HMOs, can sometimes be liable for medical malpractice. Depending on its structure, an MCO can be held vicariously liable for the medical malpractice of its staff, for the wrongdoings of its independent contractors, and sometimes even directly liable for the negligent retention of physicians or cost-containment methods. Much like a hospital, ifI an MCO actually retains physicians or other professionals, then it can be vicariously liable for medical malpractice. It should be noted that some jurisdictions do not follow this rule, and will not impute an MCO with liability for its employee’s medical negligence.

An MCO is generally not liable for the medical malpractice of independent contractor physicians, but there are with two exceptions. First, an MCO can be liable under apparent authority or agency by estoppel. “Estoppel” is a broad legal concept that encapsulates the idea that persons should be prevented, “estopped,” from doing something simply because to allow the conduct would be inequitable or unfair. In this context an MCO cannot shield itself from liability if the independent contractor acts like an agent of the MCO. Like in the case of hospitals, if an independent contractor appears to be part of the MCO then it can be treated like an agent of the MCO.

An MCO may also be liable where, despite being an independent contractor, the MCO exerts significant control over the physician. Where an MCO exercises pervasive control over a contractor such that they appear to be a direct employer or supervisor, then the MCO can be held in vicarious liability. This control likely has to extend beyond management of the provision of treatment, and likely requires control over how the physician conducts their practice. This exception is relatively new, and has not been widely used.

MCOs can be directly liable in two distinct ways. First, an MCO may owe a duty of care in its retention of physicians and other providers. Failure to select appropriate or qualified medical personnel may lead to liability. Second, if an MCO utilizes a cost-containment plan that effectively denies a patient the health care guaranteed by their insurance plan then they may be liable under both tort and contracts law.


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