When the Missouri Legislature passed tort reform in 2005 tort, it attempted to limit a hospital’s liability for the negligence of doctor’s on staff at the hospital. In the majority of the cases, these doctors were not paid by the hospitals and neither the doctors nor the hospitals viewed their relationship as being that of employer and employee. Therefore, the hospitals should not be held liable for the doctors’ actions. To make this clear, the Missouri Legislature enacted Section 538.210.2(3), which states “[n]o individual or entity whose liability is limited by the provisions of [Chapter 538 of the Missouri Statutes, which addresses medical malpractice claims] shall be liable to any plaintiff based on the actions of omissions of any other entity or person who is not an employee of such individual or entity.” Until recently, many health care providers and lawyers assumed this had taken care of this issue. The Missouri Eastern District Court of Appeals recently held otherwise.
In Jefferson v. Missouri Baptist Medical Center, the Eastern District held that this statute did not accomplish what the legislature apparently intended. In Jefferson, the Eastern District addressed the plaintiffs’ argument that the hospital could be held liable for a staff radiologist’s negligence under common law agency principles. The hospital disagreed and asserted that the reference to “employee” in section 538.210.2(3) was a reference to the term “physician employee,” which was defined in Chapter 538 as “any person or entity who works for hospitals for a salary or under contract and who is covered by a policy of insurance or self-insurance by a hospital for acts performed at the direction or under control of the hospital.” The radiologist did not meet this definition and, therefore, the hospital argued that it could not be held liable for the radiologist’s negligence.
The Eastern District, applying principles of statutory construction, held that the terms “employee” and “physician employee” were different. Ironically, the term “physician employee” appears nowhere in Chapter 538 other than the definitions section. This term was used in prior versions of Chapter 538 and likely was either not deleted or not edited when the legislature passed the 2005 tort reform bill that changed portions of Chapter 538. The term “employee” is not defined in Chapter 538. Therefore, the court found that the term “employee” should be defined using its “definite and well-known meaning at common law.” Under this opinion, the common law principles of agency will be used to determine whether a physician is an employee of a hospital for purposes of Section 538.210.2(3). The court listed the following facts that would indicate whether an employment relationship existed:
- An agreement for close supervision or de facto close supervision of the agent’s work;
- Work which does not require the services of one who is highly educated or skilled;
- The supplying of tools by the principal;
- Payment by the hour or month;
- Working over a considerable period of time with regular hours;
- Full time work for one principal;
- Work in a specific area or over a fixed route;
- The fact that the work is part of the regular business of the principal;
- The fact that the community regards those doing such work as employees;
- The belief by the Parties that there is an employer-employee relationship; and
- An agreement that the work cannot be delegated.
Many of these factors weigh in favor of a finding of no employment relationship and, therefore, the impact of this opinion may be more procedural than substantive. The likely immediate effects will be an increased number of allegations of agency or employment relationships between hospitals and the physicians on staff in medical malpractice suits. This will also likely result in hospitals being named as defendants more frequently in malpractice suits and having to stay in the case longer until the issue of employment is resolved. Whether that relationship can ultimately be established legally will be fact dependent on a case by case basis.