CHANGING LIABILITY When Hospitals Employ Physicians Risks and Benefits for Hospital Defense
Karen A. Butler, Esq. Thuillez, Ford, Gold, Butler & Young, LLP
THE MODEL 1980s through 1990s Private practitioners in community w/ privileges Traditionally employed physicians become contractors Anesthesia Radiology ED physicians House Doctors Rethinking the model Doctors as Employees
Hospital Liability for Private Practitioners As a general rule a hospital is not liable for the actions of a physician not in its employ A hospital has no duty to ascertain whether a physician has explained the risks and benefits of a procedure
EXCEPTIONS TO GENERAL RULE Where the hospital staff knows that the doctor s orders are so clearly contraindicated by normal practice that ordinary prudence requires inquiry into the correctness of the orders Mduba exposure Liability for policies, procedures, care maps, practice guidelines Liability may increase with EMR embedded guidelines Liability if hospital controls means/manner of medical practice
Mduba Vicarious liability for medical malpractice may be imposed under an apparent, or ostensible, agency theory, or, as it is sometimes called, agency by estoppel or by holding out. Essential to the creation of apparent authority are words or conduct of the principal, communicated to a third party, that give rise to the appearance and belief that the agent possesses authority to act on behalf of the principal
The third party must reasonably rely upon the appearance of authority created by the principal. The third party must accept the services of the agent in reliance upon the perceived relationship between the agent and the principal. A hospital is not "obligated to affirmatively disclaim an anesthesiologist as an employee in order to avoid the creation of ostensible agency.
Mduba Liability ER physicians (CLASSIC) Physicians on call for ER Plaintiffs have attempted to extent to anesthesia, radiology etc.
OTHER THEORIES OF LIABILITY AGAINST A HOSPITAL Equipment selection, maintenance, use Simple negligence Credentialing and privilege issues
LIABILITY FOR EMPLOYEES A hospital is almost always liable for the acts of its employees [Unless clearly unrelated to employment-ie sexual abuse of patient by employee unless hospital under some notice] Liability for nurses failing to follow orders Failing to monitor, report to physician, retained surgical objects, falls, etc
A HOSPITAL IS LIABLE FOR PHYSICIANS IN ITS EMPLOY Why employ physicians????????
PHYSICIAN S SEEKING EMPLOYMENT RELATIONSHIP Complexity of medical system Coding/audits/regs/contracts/certification- JCAHO/DOH Protection Malpractice/criminal liability-ie medicaid fraud unit/no vicarious liability for nurses, techs, clerks/opmc support etc Security Salary/less competition/economic security No longer dealing w/personnel issues/lease etc
Quality of life-few managerial responsibilities Downshifting reimbursement Bundling of codes-ppaca 3023 Pilot program to pay for integrated care duing an episode of care around a hospitalization Improve coordination, quality and efficiency of health care services Bundled payment includes inpatient care, physician services (in and out of hospital) outpatient/ed service
From 3 days before admission to 30 days following discharge To be established by January 1, 2013 Cannot result in more spending Entities participating expected to improve quality of care, decrease readmissions, improve functional status, decrease ED use, decrease hospital acquired infections
PPACA Economic impact of Patient Protection and Affordable Act on Physicians White house officials have said that as a result of PPACA the health care system will evolve into one of two forms: organized around hospitals or organized around large physician groups Annals of Internal Medicine, August, 2010
Uncertainty of future Systemic changes in health care system Personal uncertainty Will I make partner Will we keep this space/increased rent/taxes Will we lose partners/personnel/will my partnership survive
How will practice survive disability/death of partner How will practice survive soaring costs Salaries Health insurance Malpractice insurance/other liability insurance Record maintenance EMR/updates to system
Greater flexibility Possibility of part-time/flex time/retirement options Coverage Funding retirement Paid vacation/health insurance/disability
Quality Sharing of information/improved communication between and among practitioners Up to date information regarding changes in practice/regs/statutes/practice recommendations Improved educational (paid CMEs)and teaching opportunities
FHCDA Decisions by surrogate applies only to hospital and nursing homes If extended to outpatient will most likely require same/similar ethics committee oversight Ethics Committees meeting requirements are hospital or nursing home based
MANDATORY REPORTING OF OVERPAYMENTS PPACA 6402 REQUIRES THAT IF A PERSON HAS RECEIVED AN OVERPAYMENT THE PERSON SHALL REPORT AND RETURN THE OVERPAYMENT WITHIN 60 DAYS AFTER OVERPAYMENT WAS IDENTIFIED OR THE DATE THAT ANY CORRESPONDING COST REPORT IS DUE Failure to report and return overpayment is prosecuted under the False Claims Act
PHYSICIAN DISADVANTAGES No longer your own boss May not make as much money But could make more Bureaucratic issues Less control of time/practice/who you work with Less control over litigation decisions
BENEFITS FOR THE HOSPITAL Recruitment of physicians Services to community Hospital coverage in all specialties offered Control Capture of revenue from low risk procedures Increased revenue-decreased costs overall Litigation More likely a united defense Easier to resolve Lower malpractice costs overall
RECRUITMENT The days of hanging out a shingle are over Single practitioners and small groups are increasingly unable to handle complex regulations,coding, billing, certification/doh requirements, EMRs, employment issues etc. Want to decrease exposure to civil/criminal liability Want the support of an institution or large group
SERVICES TO COMMUNITY May be able to recruit physicians in specialties not available in your community Staff clinics and offices in rural areas Continuity of care and enhanced communication
COVERAGE Will be able to provide 24/7 coverage for ER and inpatients Adequacy of coverage for all specialties and for each practitioner Improved quality and access
CAPTURE OF REVENUE FROM LOW RISK PROCEDURES More private practitioners (Plastics, GI, ophthmology etc) moving low risk procedures out of hospitals to office or stand alone surgical centers leaving hospitals with high risk procedures When all physicians are employees all revenue from procedures, even low risk, are captured Increased compliance with SOC, regs, DOH under hospital umbrella
CONTROL Compliance with DOH other standards and regs even in outpatient settings Staffing/scheduling issues Interface and uniformity of records Standard/best practices/evidence based medicine Credentialing/privileging issues
Increased Revenue Overall Decreased overhead for entity than would be for hospital system and multiple private practices Malpractice coverage necessary for every physician However cost of underwriting coverage for entire entity much less than coverage for each individual physician Negotiation advantages with vendors/insurers
WHAT HAPPENS IN LITIGATION?? Hospital is liable for all physicians in its employ Even if hospital not named Hospital exposure is increased exponentially for every physician employed
LITIGATION More likely to have united defense However may require separate counsel if conflicts arise Hospital has control of litigation Usually one law firm Data bank issue-may be less exposure Increased number of suits-will require increased, well qualified management staff to facilitate handling of claims
Future Trends Fewer physicians are practicing in solo or small (<10) practices; Demographic, regulatory and economic forces are moving physicians from solo or small practices into hospital/employee or large group practices; These forces are likely to persist or even intensify over the coming years; This trend is likely to continue
Filling the Gap Must work to provide access in underserved rural areas PPACA increases slots for physician loan repayment program in underserved areas Medicare bonus payment to primary care providers and surgeons in HPSAs (health professional shortage areas)