December 2005

Will you have to pay for their mistakes?

by Timothy Feuling

The Florida doctor of chiropractic ‑‑ we'll call him Dr. A ‑‑ was just trying to help out a colleague when he allowed "Dr. B" to lease space in his office. He had absolutely nothing to do with Dr. B's patients or practice. Yet, when Dr. B skipped town with his patients' money, the board complaint named Dr. A, since his name was on the door!  It cost $ 6,000 to defend the case, and Dr. A ended up with a complaint on record with the Florida board.

In Arizona, a doctor hired a massage therapist as an independent contractor. When a patient alleged that she was sexually assaulted by the MT ‑‑ who had no coverage of his own ‑‑ the doctor was sued. The case cost $33,829 to defend and was settled out of court for $25,000.

In Louisiana, a patient claimed that one member of a chiropractic group ‑‑ where several DCs shared space‑‑ caused an injury to her lower back. Since the doctor who actually treated her had no insurance coverage, the entire group was sued. Already, $24,000 has been spent defending the case, which remains open after two years.

These are all actual cases and emphasize the need for "vicarious liability" coverage, which covers you if are sued because of the actions of someone else working in the same office. This can include your own staff, , members of your group practice, other independent DCs and virtually any other health care provider of any health related service who leases or shares space in the office.

It's easy to accept the fact that you are responsible for the actions of your employees, a CA or technician for instance. If one of them injures a patient, violates state regulations, or fails to protect a patient's privacy, you will be held liable for any damages they do. No matter how careful you are in the hiring process, the actions of a staff member could trigger a lawsuit or board complaint. That's always been the "price" of having employees.

It's harder to accept the reality that you might also be held responsible for the actions of non‑employees who happen to work in the same office. Yet, the rules of vicarious liability can put you at risk even if you've never seen the patient in question. As Dr. Leslie Wise said in an article for Institute for Chiropractic Ethics: "As professionals, in chiropractic practice, dealing with the public, we need to remember that there are occasions where we may reap what others have sown."

Insurance giant CNA explains to its policy holders that "when you have a professional practice, you can be held responsible for overseeing the patient care provided by associates, other licensees, technicians, and everyone else even vaguely connected to your practice. If an insured is sharing space (including subleasing their own space) with any other health care professional and there is or can be any perception of an association between the practitioners (no matter how remote) by the patient or lay public, it is virtually guaranteed both parties will be named in a claim by an injured patient."

This has become more of a problem in recent years, as many DCs have begun working in, or running, multidisciplinary offices. In some cases, the DC is legally considered to be an  "agent" for physical therapists, massage therapists, acupuncturists, nutritionists, or other health care providers. These other providers work often indirectly (usually as independent contractors or simply as tenants leasing space) with the DC, who can be held liable for their actions. Often, these other providers fail to obtain their own insurance policies and the DC is the one with the "deep pockets" when it comes to a lawsuit. Even if you are not ultimately held legally liable, it will still take hundreds of dollars in legal fees to remove you from the case.

In addition, your liability will increase if the other provider is authorized to perform procedures beyond your scope of practice. Depending on your state, this may include PTs, nurses, nurse practitioners, and other providers. This is why most boards prohibit or strongly advise against employing or contracting with persons with licenses in ancillary medical disciplines outside of chiropractic.  As the New York State Office of the Professions Advisory Bulletin puts it ‑‑ "it is not recommended that licensee's be the controlling entity in a practice with licensees in medicine or any other profession authorized to perform procedures beyond the scope of your chiropractic license..

Remember, as CNA points out, vicarious liability can occur even when no actual agency relationship exists. If a patient comes to your office and receives care from another person, that patient could sue you if there was a reason to assume that you "ran" the office, and had authority over the person providing care. This can happen, as we saw in the Florida case, simply because your name is on the door. It doesn't matter whether you are simply leasing the space to another DC or provider ‑‑ you could be held responsible for the actions of any person in "your" office. Keep in mind, too, that absentee owners may be subject to professional misconduct violations as well. Just because you aren't "on site" doesn't mean you aren't at risk.

The same thing applies if you are in a partnership or group practice. As a member of the group, you could be faced with vicarious liability issues should ANY member of your group practice be sued. Again, your risk is greater if the treating doctor does not have an insurance policy of his or her own.

The medical profession has a long history of vicarious liability exposure, since so many medical offices are group or shared‑space practices. An Arizona‑based medical malpractice company warns its doctors of the problem with the example of a group of doctors sharing office space and employees. "There is no actual agency relationship between the doctors; they are just sharing the burden of common expenses. However, because a reasonable person coming into the office may view this as a group practice, the doctors may appear to have some type of agency relationship. A patient filing a medical malpractice lawsuit against one doctor in the group may, therefore, name the other doctors alleging vicarious liability. In this case, the physicians named solely because of their apparent agency relationship may not have insurance coverage for this type of vicarious liability allegation."

Obviously, anytime you have employees, or share space with other professions (whether or not you have authority over them) you increase your exposure to lawsuits and board complaints. This doesn't necessarily mean you need to avoid these situations, but you definitely need to protect yourself.

There are three steps to take to do that:

One: Before entering into any type of space‑sharing agreement, carefully consider your potential liability risks. It may make sense to discuss the issues with an attorney, even drawing up a contract outlining each person's responsibilities and specifically addressing malpractice insurance requirements.

Two: Secure proof of current malpractice insurance with the same limits as your own coverage from every health care provider ‑‑ DC, MT, PT, etc.‑‑‑ who works in proximity to you and has the potential to create a vicarious liability issue for you.

Three: Make sure your malpractice insurance policy does not exclude vicarious liability, and your insurance company will respond should this type of situation arise. Many policies offered specify that liability applies only to the listed licensee, offering no protection for these situations.

Finally, notify your insurance company of any situation in your practice that might result in vicarious liability (hiring independent contractors, leasing or sharing space, etc.). Better to take steps now to protect yourself, your family and your practice instead of finding out the hard way that YOU are the one left holding the bag!

(Timothy J. Feuling, president of Chiropractic Benefit Services (CBS), assists doctors in maximizing their practices through the proper choice of insurance and related services. Doctors may contact him with questions, comments, and requests for insurance quotes by phone at 800‑883‑0412 or by e‑mail at tfeuling@cbsmalpractice.com. NOTE: Doctors can qualify for free prior‑acts coverage when switching to a Chiropractic Benefit Services program from a claims‑made policy from another carrier. For more information, or for a free rate proposal and policy comparison, contact CBS at 800‑883‑0412 or fill out a CBS Quick Quote request at the CBS website, www.cbsmalpractice.com).