For Attorneys: Establishing Ostensible Agency Under Ohio Law

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For Attorneys: Establishing Ostensible Agency Under Ohio Law

For attorneys, a trio of recent decisions by the Hamilton County Court of Appeals helps to delineate the circumstances in which ostensible agency (or, agency-by-estoppel) can be established under Ohio law in medical negligence cases.  While hospitals and Medicare regulations require staff physicians to maintain insurance coverage, there are several circumstances where this requirement is inadequate.  First, if a physician provides care in an outpatient setting to privately insured patients, they need not maintain any coverage.  Second, coverage is often subject to a $1,000,000 limit which may be insufficient to cover catastrophic injuries or death.  Third, if a physician terminates coverage and fails to purchase “tail” coverage, they will be uninsured for claims filed after the policy period.  The latter scenario is likely to occur more frequently as many physicians leave private practice in order to join large hospital systems.

The syllabus to Clark v. Southview Hospital (1994), 68 Ohio St.3d 435, states the following:

“A hospital may be held liable under the doctrine of agency by estoppel for the negligence of independent medical practitioners practicing in the hospital when: (1) it holds itself out to the public as a provider of medical services; and (2) in the absence of notice or knowledge to the contrary, the patient looks to the hospital, as opposed to the individual practitioner, to provide competent medical care.”

Three Hamilton County Court of Appeals cases, Fetters v. St. Francis/St. George Hosp. (Mar. 17, 2000), Hamilton Cty. Ct. App. Case No. C-990410, Vanderpool v. University Hospital, Inc. (Sept. 27, 2002), Hamilton Cty. Ct. App. Case No. C-020020 and Bowman v. Tri-Health, Inc. (May 25, 2011), Hamilton Cty. Ct. App. Case No. C-100363, show how Clark principles apply in practice.  In Vanderpool, the court, citing Clark, noted that the first prong of Clark should not be at issue since hospitals, of course, hold themselves out as providing medical services. See also Cox v. Ohio State Univ. Hosps. (1996), 117 Ohio App.3d 254 (Although the defendant hospital “contends that it did not hold itself out as a provider of medical services, the fact it is a provider is so obvious that it will not be addressed further.”).

In discussing the second element of the agency-by-estoppel test, the Hamilton County Court of Appeals noted in Vanderpool that, in Clark, “the critical question is whether the plaintiff, at the time of her admission to the hospital, was looking to the hospital for treatment of her physical ailments or merely viewed the hospital as the situs where her physician would treat her for her problems.” In Fetters, the Hamilton County Court of Appeals found that ostensible agency existed where the patient’s only consideration in obtaining medical care from a particular physician was that he worked at the hospital which was nearest to where the patient resided.  In this regard, the court found that the patient sought care from the hospital rather than the physician.

As Judge Painter noted in his concurring opinion in Vanderpool:

“If the patient seeks out the doctor, and the doctor chooses a hospital as the site of treatment, the hospital is generally not liable from the doctor’s negligence – the doctor is truly an independent contractor. When the patient seeks out the hospital, and the hospital provides the doctor, the hospital is liable for the doctor’s negligence under longstanding and unquestionable agency principles. It is that simple. To assert the “independent contractor” dodge in this instance is beyond specious.”

The next consideration in determining whether the second prong of the Clark test is met is whether the patient had notice or knowledge of the independent relationship between the physician and the hospital.  As stated in Vanderpool:

“Under Clark, ‘notice’ means informing the patient that there is an independent relationship between the hospital and the doctor treating the patient, so that the patient understands that a specific doctor is responsible for her treatment and not the hospital. Notice is not achieved under Clark by merely informing the patient of the name of the doctor who will be treating the patient….”

In Fetters, the court wisely noted that the fine print of a hospital consent form does not provide adequate notice of the employment status of staff physicians.  In this regard, the court stated that “merely having a patient sign acknowledgement forms while awaiting treatment for a serious malady does not necessarily constitute meaningful notice.”

In Bowman, the court stressed the limits of ostensible agency.  In that case, plaintiffs sued a physician and the hospital where he held privileges.  However, the patient had only seen the physician in an outpatient setting, a medical office building, that was not on the hospital campus.  In fact, the hospital was merely a tenant in the medical office building where the physician had treated the patient.  The court, in dismissing plaintiffs’ ostensible agency claim against the hospital on summary judgment, noted that the plaintiffs “cited no evidence in the record that

[the patient] went to [the hospital] to seek medical treatment or that [the hospital] sent them to [the independent-contractor physician].”   The court stated that the mere fact that a plaintiff is confused by signage, without more, is inadequate to support a claim for agency-by-estoppel.

Clark was based upon strong public policy. In this regard, the Ohio Supreme Court stated as follows:

“Not only is the hospital of today a large, well-run business,… but advances in medical technology have inevitably spawned increased specialization and industrialization. Hospitals are the only place where the best equipment and facilities and a full array of medical services are available at any time without an appointment. *** As an industry, hospitals spend enormous amounts of money advertising in an effort to compete with each other for the health care dollar, thereby inducing the public to rely on them in their time of medical need. The public, in looking to the hospital to provide such care, is unaware of and unconcerned with the technical complexities and nuances surrounding the contractual and employment arrangements between the hospital and the various medical personnel operating therein. *** Public policy dictates that the public has every right to assume and expect that the hospital is the medical provider it purports to be.”

Although Clark examined the application of ostensible agency in the emergency department setting, the policy set forth above is equally applicable in other settings. See e.g., Cope v. Miami Valley Hospital (2011), 195 Ohio App.3d 513 (applying Clark principles beyond the emergency department setting).  For attorneys faced with inadequate coverage, these cases help determine whether the hospital’s coverage applies.

People interested in learning more about our firm’s legal services, including medical malpractice in Ohio, may ask questions or send us information about a particular case by phone or email. There is no charge for contacting us regarding your inquiry. A member of our medical-legal team will respond within 24 hours.

By David Kulwicki|2019-03-18T22:03:12+00:00April 16th, 2012|For Attorneys|Comments Off on For Attorneys: Establishing Ostensible Agency Under Ohio Law

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