Many practices, medical groups, or professional associations may have liability exposure based on the conduct of another in their office or practice due to vicarious liability.  This liability is based upon the legal concept of Respondeat Superior. Respondeat Superior (Latin) translates to “let the master answer,” or “let the superior respond.”  The doctrine of Respondeat Superior imposes upon an employer strict liability for the negligent acts or omissions of his employee or agent that are committed in the scope of employment or agency.  This theory of liability is not based on any improper action of the employer.  The fact that the employer may have acted reasonably in hiring, training, supervising, and retaining the employee is irrelevant under the theory of Respondeat Superior and does not provide a basis on which the employer can avoid liability for the acts of employees or agents. That being the case, when the right to recover is based entirely on the doctrine of Respondeat Superior, and if there is no negligence by the servant (employee/agent) there should be no judgment against the master (employer). [i]  Meaning, if an employee or agent is exonerated from liability because the employee has not committed a tort or negligent act, then the employer is also exonerated.  The basic legal principle of Respondeat Superior is that the cost of medical negligence committed in the conduct of a business enterprise should be borne by that enterprise as a cost of business.

Missouri revised Statute 538.205 defines employee “any individual who is directly compensated by a healthcare provider for health care services rendered by such individual and other nonphysician individuals who are supplied to a healthcare provider by an entity that provides staffing.”  The statute does not define a physician employee, and therefore allows for an analysis of the status of physicians as employees, agents, independent contractors or borrowed servants under Missouri law.

The determination of whether an individual is an agent (employee) of the enterprise or is an independent contractor working for the enterprise depends primarily on the control exercised over the individual.  If the right to control does not exist, then the person is an independent contractor.  Independent contractors generally have independent business and sole control over the means and methods of the work to be performed.  But keep in mind, the mere fact that a healthcare provider retains the freedom to exercise independent medical judgment does not preclude an agency relationship.

Respondeat Superior imposes vicarious liability on employers for the negligent acts or omissions of employees or agents if the acts or omissions are committed within the scope of the employment or agency.  To establish an agency relationship: (1) the principal must consent, either expressly or implicitly, to the agent’s acting on the principal’s behalf, (2) the agent must be subject to the principal’s control and (3) the actions of the employee/agent must be for the benefit of the employer.  The right of control at issue is the right to control the details and manner of the work performed by the employee or agent. The inquiry into control in healthcare claims focuses on whether the employer has the ability to control the agent or employee’s provisions of evaluation, diagnosis, or treatment services to patients.  Some of the factors that contribute to a finding of control include:

1. The business enterprise establishes the medical standards for the provision of services,
2. The business enterprise determines the qualifications necessary for the individual,
3. The business enterprise requires the healthcare professional to submit reports regarding services according to established standards,
4. The business enterprise sets the price of the services of the healthcare professional, and that price can not be changed without prior approval,
5. The business enterprise can require the healthcare professional to maintain liability insurance in specific amounts,
6. The business enterprise has the right to terminate the healthcare professional if dissatisfied with his/her performance,
7. The business enterprise owns and provides all of the office space for the services and provides all necessary equipment, supplies, and fixtures,
8. The contract between the healthcare professional and the business enterprise is of an infinite duration vs being hired for a discrete, limited purpose,
9. The manner in which the healthcare professional is paid,
10. The contract between the healthcare professional and the business enterprise,
11. If the business enterprise holds out the healthcare professional as an employee such that there is a reasonable appearance that the healthcare professional is an employee.
12. How services of the healthcare professional are billed and paid

No one factor is determinative as to whether the control exercised by the business enterprise gives rise to an agency or employee-employer relationship to establish vicarious lability.  Additionally, there may be a fair difference of opinion on the factors and the weight to be given to each factor.

Whether hiring independent contractors, locum tenens, or borrowing employees from another employer the best practice is to ensure that the contract with those individuals clearly state the nature of the association.  These individuals should control the means and methods of the work they do, and the work should be of a limited duration.  Furthermore, the independent contractor, locum tenens or borrowed employees should not be represented to the patients as employees.  Whether it is locum tenen or independent contractor, they should be identified as such when seeing the patients.  The patients should be directly informed that the healthcare professional who is seeing them is a temporary substitute and not an employee.  Additionally, these individuals must maintain their own professional liability insurance.

Physicians can also be vicariously liable for the acts of nursing and other nonphysician personnel in the office.  This liability can be based on failures of communication, failures to update information on patients correctly, failing to file or misfiling test and lab results, or any other breach of procedures and protocols by office staff.  To best prevent such exposure, all employees should possess adequate experience, be well qualified, and should be properly trained and supervised.  Any concerns about employees should be promptly reported and addressed, with a note in the employee file.  Any problematic employees should not be retained by the practice.  All policies and procedures should be properly implemented and enforced, as well as routinely reviewed and revised as needed.

Physicians cannot prevent lawsuits based on vicarious liability. However, understanding the concepts of Respondeat Superior and taking appropriate steps can greatly reduce the likelihood of lawsuits and increase the chances of prevailing if a lawsuit is filed.

[i] Dalbey v. Heartland Regional Medical Center et al. 821 S.W. 3d 36 (Mo.App.WD 2021).