Most jurisdictions employ the doctrine of vicarious liability to impose liability on a solo medical practice, medical group, hospital or clinic for the actions of a non-employee or independent contractor. This may include people you might not consider to be acting on your behalf. These people are called "ostensible agents."

The theory of ostensible agency was recently analyzed in the Mejia v. Community Hospital of San Bernardino case. It basically means that a medical group, hospital or other healthcare entity can be held liable for the actions of non-employee physicians or other healthcare practitioners under certain conditions. The patient must have had reason to believe that the person rendering medical treatment was an agent of the group, hospital or entity, and the patient must have relied on that apparent agency relationship.

Plaintiff attorneys are using ostensible agency more liberally to get to the "deep pockets" of hospitals, large groups and clinics, particularly if the physician defendants, who are allegedly ostensible agents of these entities, are uninsured or underinsured.

The following hypothetical situation illustrates how ostensible agency could affect a small medical group. A regular patient of one of the physicians in the group needs a cholecystectomy and is referred to an outside provider. The referring physician tells the patient, "Dr. X does all of our cholecystectomies." The patient thereby infers that the surgeon has a direct affiliation with the group and is an agent of the group. Further, the surgeon does not say anything that would suggest she is not an agent of the group.

During the procedure, the patient's common bile duct is severed. He sues the surgeon and the group. The suit against the medical group is based on its vicarious liability for the surgeon's negligence. In other words, the surgeon's negligence is imputed to the group under the theory of ostensible agency.

The patient contends that the statement "Dr. X does all of our cholecystectomies" during the referral process caused him to infer that the surgeon was an agent of the group. During the discovery phase of litigation, it is revealed that the surgeon does not have insurance to cover her for the incident and is "bare." Therefore, the group becomes the target of litigation, since it has professional liability insurance with limits of $1 million per incident.

Investigation reveals that, in this case, the surgeon's severing of the common bile duct was negligent and, furthermore, the patient has suffered damages. The group is held vicariously liable for the patient's outcome under the theory that the surgeon was the ostensible agent of the group. As such, the group would be responsible for the entire settlement since the surgeon is uninsured.

This is one of many issues discussed at the NORCAP Council meetings I attend representing the physicians of Riverside County. NORCAP is an organization comprised of the county medical associations that endorse NORCAL Mutual Insurance Co. for their members' professional liability needs. If you have any additional questions about ostensible agency, contact NORCAL or your professional liability carrier.