A recent Nevada Supreme Court opinion clarifies whether the state's hospitals can expect to be held liable for care in their emergency rooms provided by physicians who are independent contractors.
Not (necessarily) liable
Nevada court strikes down strict hospital standard
The clear answer is: It depends, which is generally the standard elsewhere. In the eyes of hospitals is better than a lower court's conclusion that hospitals have what's called an “absolute nondelegable duty,” meaning essentially that they are strictly liable for the acts of the independent contractors, no matter what.
In an opinion published July 1, the Supreme Court ruled that there's no basis in state statutes for such an obligation.
The case involves Renown Regional Medical Center, Reno, which was sued by the family of a boy whose mother brought him to the hospital's emergency room four times. He was variously sent home with antibiotics and painkillers before it was discovered he had basilar meningitis, which left him brain damaged.
A judge granted partial summary judgment against the hospital based on the finding of absolute nondelegable duty. Renown reached a settlement with the family resolving the matter but reserved the right to appeal on that particular legal question.
Chief Justice Ron Parraguirre, citing another Nevada hospital case decided in 1996, wrote that Renown could instead be held liable under a theory referred to as “ostensible agency,” which in part turns on whether the patient was given appropriate notice of the doctor's status.
“That theory is a common theory that plaintiffs in malpractice cases will promote and hospitals have to be prepared to defend against,” said Anna Grizzle of the law firm Bass Berry & Sims in Nashville. She said it's crucial that hospitals clearly communicate the arrangement to patients with signs and consent forms. “The Nevada case really is in line with where you see most courts coming down.”
Although the terminology can be mind-bending—a South Carolina case discussed by the court concluded hospitals have a “nonabsolute nondelegable duty”—Las Vegas lawyer Dennis Kennedy said the precise legal foundation affects important business decisions when hospitals are confronted with the choice of handing off the burden of managing and staffing their emergency departments.
“We'd like to just be free of the emergency room, but if there's a nondelegable duty, we're still on the hook for everything these people do,” Kennedy said. Then he offered the other perspective. “You think the patient who has a huge gash in his arm stands outside the emergency room and says, ‘Gosh, I wonder if this is the hospital or if they've contracted this out?' ” he said.
Indeed, Justice Michael Cherry wrote in a dissent joined by two colleagues that “emergency room patients may base their decisions regarding care largely upon hospital advertising and the reputation of the hospital as an entity.” Some, he added, are steered to particular hospitals by their health plans.
Cherry preferred South Carolina's “nonabsolute nondelegable duty,” but the majority opinion questioned whether that's any different from ostensible agency because “the result is the same”: Liability depends on whether the hospital chose the doctor and whether the patient reasonably believed the doctor was an agent of the hospital.
Tom Vallas, corporate compliance officer and counsel for Renown Health, said in a written statement that Renown is “pleased that the court recognizes the reality of how hospitals operate in the state” and that the “decision reaffirms the current law in this state and follows the vast majority of jurisdictions in the United States.”
The Nevada Hospital Association filed a friend-of-the-court brief on behalf of Renown but did not respond to requests for comment.
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