I recently spoke with a physician who had just come out of a years-long legal slog. This physician owned his own practice and was in the habit of holding monthly staff meetings. He provided lunch at these meetings. One tragic day, he sent his receptionist out to get lunch for the meeting. She picked up some sandwiches and was hurrying back to the office when she ran a red light, striking another car in the intersection. That devastating accident resulted in the death of two teenage girls in the other car.
As healthcare professionals, we are begrudgingly prepared for malpractice lawsuits that come from the actions of our own hands. We live in the most litigious society in the world, we are home to 85% of all the world’s attorneys, and we have created a legal system that rewards frivolous lawsuits nearly as well as meritorious lawsuits. If we’re not ready to get sued, it’s time to hang up the white coat and scrubs.
While we have mentally accepted these facts, most doctors are surprised to discover just how far their liability extends. Consider the case we started out with above. This was not a malpractice case and doctor wasn’t driving, yet is he still liable? The answer, supported by acres of legal precedent, is a resounding yes. Did the doctor do anything wrong? Clearly, no, he did not, but it still ended up costing him millions.
Respondeat Superior
When you give your dental assistant a task, your liability is pretty straightforward. The same can be said when you approve of the job after it is done. Stamping the task with your seal of approval is seen through legal eyes as accepting the act as your own, whether that ratification is implicit (silent) or expressed. But what happens if you knowingly employ an incompetent person? Or what if you fail to provide the appropriate tools for the job? How about training? And what about the associate dentist or independent contractor?
These questions bring into focus the concept of vicarious liability. Vicarious liability (aka respondeat superior in legalese) is the legal responsibility that occurs when one party is liable for the actions of another party. Dentists incur substantial vicarious liability – possibly the most vicarious liability of any healthcare provider.
Think about the happy-go-lucky physician. Once he refers a patient to a physical therapist, the physician typically has neither responsibility for the therapists’ work, nor for the damage that may be caused by their negligence. On the other hand, dentists are routinely liable for work done outside of their office by professionals who are not their employees: the dental technician. In most places, dental technicians are self-employed and licensed and do not require supervision in following the dentist’s prosthetic prescription. However, the dentist is responsible for the work of those technicians. While these particular types of cases are rare, the patient may sue the dentist, as the one responsible for the technician’s work, and not the technician. Only the dentist may start any proceedings against the technician, after the case with the patient has been settled, or the work done to the patient’s satisfaction.
Generally, vicarious liability requires that the employee’s action serves the employer, the action is not outside the scope of employment, and that the patient could have a reasonable belief that the action was an act of the employer. In dentistry, vicarious liability commonly arises from at least four sources: (1) employees, (2) associate dentists, (3) dentist partners, and (4) referrals to specialists.
EMPLOYEES
Train first, verify first, then delegate. And not just procedures. Have you ever walked in on the tail-end of an employee-patient conversation only to jump in for major damage control? How many of those scenarios do you miss? Whether you are there or not, the patient may have a justifiable belief that the dental “advice” is yours and you are liable for resulting damages.
The rubric for vicarious liability from employees is relatively straightforward. Dentists are responsible when:
They select the employees who will act.
They control employee activities.
They benefit from employee activities.
If you benefit from your employee’s activities, you also assume the risk of those employee activities. If an assistant or hygienist gives erroneous advice resulting in an injury to a patient, you may be liable. Generally, if the staff person is acting outside the scope of his or her job description or license without the dentist’s knowledge, the dentist may avoid liability. However, if a dentist conducts him or herself in a way that leads patients to believe the staff person is acting within the dentist’s authority, the dentist may be held liable.
The vast majority of states require that the dental hygienist, though independent in some of her activities, and semi-independent in others, be under the personal supervision of the dentist. Dentists not only have the right to control activities of the dental hygienist working under the dentist’s supervision but also the duty to supervise the professional activities of the hygienists. Thus the dentist is responsible for the dental hygienist’s wrongful acts. Even where the fee of the dental hygienist is decided upon by and paid directly to the dental hygienist, the relationship between the dentist and the dental hygienist is that of an employer and agent.
ASSOCIATE DENTISTS
If bringing on another dentist makes sense in your practice, carefully weigh the pros and cons of employee or independent contractor. When you decide, spell it out clearly in the contract and follow your state’s rules to ensure that you get what you want. Neither option creates a perfect shield for vicarious liability. If a serious incident arises, the potential for your silence to be interpreted as implicit approval makes a strong argument to consider terminating the relationship.
When it comes to legal material, vicarious liability through associate dentists provides the most plentiful source of cases. And there are some doozies! Consider a 2003 case, where an associate scumbag sexually molested a sedated female patient. The patient sued under a theory of vicarious liability. The court found that the theory did not apply to the associate dentist because the assault did not serve the employer, was outside the scope of employment, and that the patient could not have a reasonable belief that the dentist's sexual assault was an act of his employer. However, the court concluded that vicarious liability did apply to the dental assistant who was also in the room assistant and failed to prevent the assault. Marie Y. v. General Star Indemnity Co., __ Cal.App.4th __, 2 Cal.Rptr.3d 135 (3rd Dist., 2003).
Associate dentist liability is largely, but not entirely, a question of whether the associate is an employee or independent contractor. If the dentist is an employee, the employer will be held responsible for any negligence committed by the employee while the employee doc is acting within the scope of employment. If an associate is found to be an independent contractor, then it is more likely that no liability will be imputed to the employer. Remember, every state is different, but a typical test for determining whether the relationship of the parties is that of employer and servant or that of employer and independent contractor is whether the employer retains the right to control the time, manner, and method of executing the work. In fact, there are at least eleven (11) factors that courts will consider if they need to make the determination of the exact nature of the relationship.
The good news, if you are the employee associate dentist, is that are not vicariously liable for the malpractice of another dentist employed by the corporation, even if that dentist is the officer or director of the corporation.
PARTNER DENTISTS
Strongly consider a different business entity than the traditional partnership, if only from a tax-benefit perspective! If you are working together and have not set up any other entity, the law will likely assume that you are in a partnership, with all of its particular liability and asset risks.
While there are a number of legal vehicles for creating your business entity, those in a true partnership are vulnerable for any acts that his or her partner may conduct when treating patients. Each partner has unlimited liability for the negligent injuries associated with the practice of the partnership affairs. This is seen when a patient sues both partners and one partner has never seen a specific patient or participated in that patient’s care.
SPECIALIST REFERRALS
Know the dentists and specialists you refer to. Know how they handle cases. Make sure the multi-specialty office makes risk-management sense. Friendship is not a legally defensible motive for making a referral.
A dentist is not released of the obligation and duty of rendering dental care and attention duty by delegating to others. If the referral dentist performs his or her duty incorrectly, the original referral dentist could be responsible for sending the patient in the first place. This is known as a negligent referral.
Negligent referrals hinge on a combination of three factors. They are:
1. Whether the referring dentist knew or should have known that the specialist was impaired or incompetent.
2. Whether the referring dentist materially benefited from the referral (generally money, but not always).
3. Whether the referring dentist directed or took part in the treatment provided by the specialist.
What about referring to another provider in your office? Intra-office referrals in multi-specialty practices, husband/wife partnership practices, and even itinerant dentists specialists working out of a general dental office create a mutual and materially beneficial relationship. While the setup is typically convenient for patients and doctors, the doctors carry mutual risks and may be found liable for each other.
CONCLUSION
Professional liability claims are going to examine the practice owner’s responsibility, the treating dentist’s part, and the intent of the employee. But remember, no fault on the part of the dentist is required for a finding of vicarious liability.
Although we analyzed a series of professional vicarious liability scenarios, non-technical clams, like the lunch pickup case we discussed at the beginning, can be more vexing to the doctor. Those cases are more likely to fall into a gray area that may result in reduced or no insurance coverage. You can’t prevent every accident, but consider ordering delivery at the next staff meeting.
-Ben