Texas Nonprofit Healthcare Organizations May Be Vicariously Liable for Malpractice of Their Employee Physicians

The Texas Supreme Court recently held that nonprofit health organizations could be vicariously liable for the alleged medical malpractice of an employed physician.

In a case involving Renaissance Medical Foundation and its employed surgeon, the Court’s opinion states that if the negligent act, which is the subject of a malpractice, is something the NPHO could exercise control over without interfering with the physician's exercise of independent medical judgment, then the NPHO could be vicariously liable in the malpractice suit.

This holding has ramifications for Texas NPHOs and serves as a reminder for NPHOs to ensure that they do not impact or interfere with their physicians’ independent medical judgment but that they monitor their employees in the areas for which the NPHO can exercise control.

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The Texas Supreme Court ruled Friday that nonprofit health organizations can be sued for the alleged medical malpractice of one of their physician employees, in a dispute over an allegedly botched brain surgery.

The Lone Star State's highest court found that Renaissance Medical Foundation can be held vicariously liable for the actions of Dr. Michael Burke, who is accused of negligently performing brain surgery on Rebecca Lugo's then-underage child in February 2018 and causing permanent injuries.

When an NPHO is sued because of an employee physician's alleged negligence, its vicarious liability will depend on whether the plaintiff can prove that an exercise of control over the alleged negligence would not interfere with the physician's exercise of independent medical judgment," the opinion states. 

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When an NPHO is sued because of an employee physician's alleged negligence, its vicarious liability will depend on whether the plaintiff can prove that an exercise of control over the alleged negligence would not interfere with the physician's exercise of independent medical judgment," the opinion states.

The justices laid out a few loose guidelines for courts to follow in determining whether an NPHO can be held vicariously liable: the nonprofit's level of control over the doctor's specific action that caused the alleged injury; and whether that control interfered with the doctor's judgment.

https://www.law360.com/articles/2344555/texas-nonprofits-can-be-sued-for-doc-med-mal-justices-rule