Unit 3 Assignment: Apparent Authority (or Agency)
View an introduction to the Assignment here. Be sure to adjust your audio settings.

Unit outcome(s) addressed in this Assignment:

•Distinguish Respondeat Superior from Independent Contractor Status

•Discuss Doctrine of Apparent Agency

•Discuss liability of managed care organizations

Course outcome(s) assessed/addressed in this Assignment:

HA525-1: Illustrate legal principles and laws that affect professional and administrative decisions found in health care services.

HA525-3: Evaluate inherent limitations to the delivery of health care due to legal mandates.

HA525-5: Evaluate how the law of contract and malpractice mold health care delivery.

Instructions

In Unit 3, you are to submit a paper based on the following article which can be found in Doc Sharing:

Ruling may up risk for ‘apparent authority.’ (2009). Healthcare Risk Management, 31(4), 43–44.

The article is about the Doctrine of Apparent Authority (or Apparent Agency, DAA), which is also discussed in Chapter 6 of your textbook.

After reading the article, compose a paper including, but not limited to, the following:

•Discuss apparent authority, generally.

•Include an understanding of risk management.

•Discuss the relationship between physician and hospital (or other authority/agency).

•What conclusions would you as a health administrator make about the relationship between physician and agency?

•How can health administrators help the relationship be productive for both parties?

Requirements

Your submission must be written in a scholarly, well-flowing piece that reflects Master’s level work.

Include a title page, a reference page, and 12 pt. Times
All formatting and references should follow APA format. You may include additional references beyond those provide
Please be sure to download the file “Writing Center Resources” from Doc Sharing to assist you with meeting APA expectations for written assignments.
Apparent_Authority
being held responsible
under the “apparent authority” concept.
Also known as “ostensible authority,” “apparent
authority” is the idea that the patient sometimes
can reasonably assume the doctor was performing
as a hospital employee even if that is not actually
the case. The theory was confirmed recently by a
New Jersey state appellate court, which held that a
hospital may be vicariously liable for a staff doctor
whom a patient reasonably believes is providing
treatment on behalf of the hospital. In Estate of
Cordero v. Christ Hospital, the plaintiffs asked the
Superior Court of New Jersey to reconsider the
trial court’s dismissal of vicarious liability claims
against the hospital. (Editor’s note: The appellate
ruling can be found on the web site: www.sitemason.
com/files/hR0RBm/njmalpracticedecision.pdf.)
The case involved Ramona Cordero, an insulindependent
diabetic, who was treated by a member
of an anesthesiologist group that contracted with
the hospital. Before the day of the surgery, Cordero
had never met the anesthesiologist, who wore no
identification showing his affiliation with the anesthesiology
group. He also did not advise Cordero
that the hospital assumed no responsibility for the
anesthesiologist. Cordero suffered brain damage
from the procedure. She remained in a vegetative
state until her death 3½ years later.
At trial, the court dismissed the claim for vicarious
liability, saying the plaintiffs failed to present
evidence either that the hospital “actively held
out” the doctor as its agent or that it misled the
patient into believing that he was its agent.
The appellate court, however, concluded that
affirmative action is not necessary to mislead the
patient. In its ruling, the court explained that
while a hospital is generally immune from liability
for the negligence of independent contractors,
such as doctors, there is an exception when the
hospital’s actions or omissions suggest that the
doctors act on its behalf. The court cited a number
of factors that can determine whether the
doctor has been “clothed with the trappings” of
apparent authority:
• whether the hospital provided the physician;
• the nature of the medical care and whether it
is typically an integral part of treatment received
at a hospital (e.g., anesthesiology, radiology,
emergency care, etc.);
• notices of the relationship or disclaimers of
responsibility;
• the patient’s opportunity to reject care or
select a different physician;
• the patient’s prior contacts with the doctor;
• special knowledge about the doctor-hospital
relationship.
The hospital’s contract with the anesthesia
group established a system under which the
arrival of a specialist with no prior contact with
the patient, and who did not explain his relationship
with the hospital, could lead a reasonable person
to assume that the doctor was an agent of the
hospital, the court concluded. Most importantly
for risk managers to note, the court pointed out
that the hospital failed to take any action to deter
this reasonable inference. Considering the circumstances,
the appellate concluded that the plaintiffs
could pursue their vicarious liability claim against
the hospital, and also that the plaintiffs were entitled
to a rebuttable presumption that Cordero
believed the doctor to be the hospital’s agent.
Cases alleging apparent authority are becoming
more common, says Claire Miley, JD, a health
care attorney at Bass Berry in Nashville, TN.
“We are seeing a growing number of these
cases, especially with respect to hospital-based
specialists, such as anesthesiologists, radiologists,
and emergency medicine doctors. Courts are making
it harder for hospitals to disavow liability for
April 2009 / HEALTHCARE RISK MANAGEMENT ® 43
A recent appeals court ruling in New Jersey coul

authority
and issued similar rulings; but in those jurisdictions
without settled case law, plaintiffs may
point to the New Jersey ruling as support for
their arguments.
“This New Jersey case spoke quite succinctly
and clearly, saying a hospital could have additional
exposure if it does not take addition steps
to eliminate or substantially mitigate that exposure,”
he says. “The apparent authority doctrine
is one that risk managers must seriously consider
and ask themselves if they are adequately conveying
to patients that a doctor may be providing
service in the hospital but is in fact independent
of the hospital.”
Miley and Antico say hospital risk managers
need to put patients on notice that independent
staff doctors are not employees of the hospital and
do not act on the hospital’s behalf. Inserting a disclaimer
into the patient’s consent to treatment form
may help to accomplish this purpose but may not
be enough to avoid liability. (See article, right, for
more advice on how to avoid apparent authority.)
Risk managers should consider having hospital
staff specifically call attention to the disclaimer
when interacting with the patient. Giving the
patient an opportunity to find another physician if
the patient does not want to receive treatment from
the on-call anesthesiologist, radiologist, or other
doctor may further protect the hospital, Miley says.
“Additionally, hospitals may consider removing
any hospital insignia from the lab coats and
scrubs worn by independent staff doctors and
may instead require these doctors to wear identification
showing that they are nonemployees,”
Miley says. “And when hospitals post listings of
their independent staff physicians on their web
sites, the hospitals may want to make clear that
they do not employ these doctors.”
None of those steps guarantee that a court
won’t find apparent authority, but Antico says
the efforts establish a record of good faith and
intent.
“You can point to all the efforts you made to
inform the patient, to make the doctor’s status
clear and distinct from the hospital,” he says. “It
still might not be enough for the court, but you’ll
be in a better position than some hospitals that
have to try to argue that the patient should have
just known about the intricacies of hospital
staffing and physician contracts.” ¦
Details matter with
‘apparent authority’
David V. Kramer, JD, an attorney with DBL Law
in Crestview Hills, KY, points out that a disclaimer
on the consent form must be worded carefully
to ward off claims of “apparent authority.”
“The language should be framed in such a way
that the hospital doesn’t seem to be undermining
patients’ confidence in the quality of the care provided
by doctors or its medical staff,” he says.
“Also, since many hospitals do employ some hospital-
based physicians, this language should be
carefully crafted to avoid misleading patients into
thinking that no doctors whatsoever work for the
hospital, when in fact, some do.”
Small details can make a difference in these
cases, says Robert M. Wolin, JD, an attorney with
the law firm of Baker Hostetler in Houston. He
recalls an Idaho case in which the court focused on
the fact that the physician’s scrub shirt had the hospital’s
name on it. The patient reasonably assumed
that the doctor worked for the hospital, the court
determined.
“We recommend that you do not allow that
kind of misunderstanding by letting contract
physicians wear hospital scrubs or other garments
that include the hospital’s logo. They
should wear clothing that clearly displays their
own name along with the physician group they
belong to,” he says. “This can seem like such a
44 HEALTHCARE

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Your email address will not be published. Required fields are marked *

Unit 3 Assignment: Apparent Authority (or Agency)
View an introduction to the Assignment here. Be sure to adjust your audio settings.

Unit outcome(s) addressed in this Assignment:

•Distinguish Respondeat Superior from Independent Contractor Status

•Discuss Doctrine of Apparent Agency

•Discuss liability of managed care organizations

Course outcome(s) assessed/addressed in this Assignment:

HA525-1: Illustrate legal principles and laws that affect professional and administrative decisions found in health care services.

HA525-3: Evaluate inherent limitations to the delivery of health care due to legal mandates.

HA525-5: Evaluate how the law of contract and malpractice mold health care delivery.

Instructions

In Unit 3, you are to submit a paper based on the following article which can be found in Doc Sharing:

Ruling may up risk for ‘apparent authority.’ (2009). Healthcare Risk Management, 31(4), 43–44.

The article is about the Doctrine of Apparent Authority (or Apparent Agency, DAA), which is also discussed in Chapter 6 of your textbook.

After reading the article, compose a paper including, but not limited to, the following:

•Discuss apparent authority, generally.

•Include an understanding of risk management.

•Discuss the relationship between physician and hospital (or other authority/agency).

•What conclusions would you as a health administrator make about the relationship between physician and agency?

•How can health administrators help the relationship be productive for both parties?

Requirements

Your submission must be written in a scholarly, well-flowing piece that reflects Master’s level work.

Include a title page, a reference page, and 12 pt. Times
All formatting and references should follow APA format. You may include additional references beyond those provide
Please be sure to download the file “Writing Center Resources” from Doc Sharing to assist you with meeting APA expectations for written assignments.
Apparent_Authority
being held responsible
under the “apparent authority” concept.
Also known as “ostensible authority,” “apparent
authority” is the idea that the patient sometimes
can reasonably assume the doctor was performing
as a hospital employee even if that is not actually
the case. The theory was confirmed recently by a
New Jersey state appellate court, which held that a
hospital may be vicariously liable for a staff doctor
whom a patient reasonably believes is providing
treatment on behalf of the hospital. In Estate of
Cordero v. Christ Hospital, the plaintiffs asked the
Superior Court of New Jersey to reconsider the
trial court’s dismissal of vicarious liability claims
against the hospital. (Editor’s note: The appellate
ruling can be found on the web site: www.sitemason.
com/files/hR0RBm/njmalpracticedecision.pdf.)
The case involved Ramona Cordero, an insulindependent
diabetic, who was treated by a member
of an anesthesiologist group that contracted with
the hospital. Before the day of the surgery, Cordero
had never met the anesthesiologist, who wore no
identification showing his affiliation with the anesthesiology
group. He also did not advise Cordero
that the hospital assumed no responsibility for the
anesthesiologist. Cordero suffered brain damage
from the procedure. She remained in a vegetative
state until her death 3½ years later.
At trial, the court dismissed the claim for vicarious
liability, saying the plaintiffs failed to present
evidence either that the hospital “actively held
out” the doctor as its agent or that it misled the
patient into believing that he was its agent.
The appellate court, however, concluded that
affirmative action is not necessary to mislead the
patient. In its ruling, the court explained that
while a hospital is generally immune from liability
for the negligence of independent contractors,
such as doctors, there is an exception when the
hospital’s actions or omissions suggest that the
doctors act on its behalf. The court cited a number
of factors that can determine whether the
doctor has been “clothed with the trappings” of
apparent authority:
• whether the hospital provided the physician;
• the nature of the medical care and whether it
is typically an integral part of treatment received
at a hospital (e.g., anesthesiology, radiology,
emergency care, etc.);
• notices of the relationship or disclaimers of
responsibility;
• the patient’s opportunity to reject care or
select a different physician;
• the patient’s prior contacts with the doctor;
• special knowledge about the doctor-hospital
relationship.
The hospital’s contract with the anesthesia
group established a system under which the
arrival of a specialist with no prior contact with
the patient, and who did not explain his relationship
with the hospital, could lead a reasonable person
to assume that the doctor was an agent of the
hospital, the court concluded. Most importantly
for risk managers to note, the court pointed out
that the hospital failed to take any action to deter
this reasonable inference. Considering the circumstances,
the appellate concluded that the plaintiffs
could pursue their vicarious liability claim against
the hospital, and also that the plaintiffs were entitled
to a rebuttable presumption that Cordero
believed the doctor to be the hospital’s agent.
Cases alleging apparent authority are becoming
more common, says Claire Miley, JD, a health
care attorney at Bass Berry in Nashville, TN.
“We are seeing a growing number of these
cases, especially with respect to hospital-based
specialists, such as anesthesiologists, radiologists,
and emergency medicine doctors. Courts are making
it harder for hospitals to disavow liability for
April 2009 / HEALTHCARE RISK MANAGEMENT ® 43
A recent appeals court ruling in New Jersey coul

authority
and issued similar rulings; but in those jurisdictions
without settled case law, plaintiffs may
point to the New Jersey ruling as support for
their arguments.
“This New Jersey case spoke quite succinctly
and clearly, saying a hospital could have additional
exposure if it does not take addition steps
to eliminate or substantially mitigate that exposure,”
he says. “The apparent authority doctrine
is one that risk managers must seriously consider
and ask themselves if they are adequately conveying
to patients that a doctor may be providing
service in the hospital but is in fact independent
of the hospital.”
Miley and Antico say hospital risk managers
need to put patients on notice that independent
staff doctors are not employees of the hospital and
do not act on the hospital’s behalf. Inserting a disclaimer
into the patient’s consent to treatment form
may help to accomplish this purpose but may not
be enough to avoid liability. (See article, right, for
more advice on how to avoid apparent authority.)
Risk managers should consider having hospital
staff specifically call attention to the disclaimer
when interacting with the patient. Giving the
patient an opportunity to find another physician if
the patient does not want to receive treatment from
the on-call anesthesiologist, radiologist, or other
doctor may further protect the hospital, Miley says.
“Additionally, hospitals may consider removing
any hospital insignia from the lab coats and
scrubs worn by independent staff doctors and
may instead require these doctors to wear identification
showing that they are nonemployees,”
Miley says. “And when hospitals post listings of
their independent staff physicians on their web
sites, the hospitals may want to make clear that
they do not employ these doctors.”
None of those steps guarantee that a court
won’t find apparent authority, but Antico says
the efforts establish a record of good faith and
intent.
“You can point to all the efforts you made to
inform the patient, to make the doctor’s status
clear and distinct from the hospital,” he says. “It
still might not be enough for the court, but you’ll
be in a better position than some hospitals that
have to try to argue that the patient should have
just known about the intricacies of hospital
staffing and physician contracts.” ¦
Details matter with
‘apparent authority’
David V. Kramer, JD, an attorney with DBL Law
in Crestview Hills, KY, points out that a disclaimer
on the consent form must be worded carefully
to ward off claims of “apparent authority.”
“The language should be framed in such a way
that the hospital doesn’t seem to be undermining
patients’ confidence in the quality of the care provided
by doctors or its medical staff,” he says.
“Also, since many hospitals do employ some hospital-
based physicians, this language should be
carefully crafted to avoid misleading patients into
thinking that no doctors whatsoever work for the
hospital, when in fact, some do.”
Small details can make a difference in these
cases, says Robert M. Wolin, JD, an attorney with
the law firm of Baker Hostetler in Houston. He
recalls an Idaho case in which the court focused on
the fact that the physician’s scrub shirt had the hospital’s
name on it. The patient reasonably assumed
that the doctor worked for the hospital, the court
determined.
“We recommend that you do not allow that
kind of misunderstanding by letting contract
physicians wear hospital scrubs or other garments
that include the hospital’s logo. They
should wear clothing that clearly displays their
own name along with the physician group they
belong to,” he says. “This can seem like such a
44 HEALTHCARE

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Your email address will not be published. Required fields are marked *