In a case decided by the Supreme Court of the State of Illinois (“Illinois Supreme Court”) on December 29, 2017, the Illinois Supreme Court held: “We refuse … to impose vicarious liability under the doctrine of apparent authority on a hospital for the care given by employees of an unrelated, independently owned and operated clinic[,] … [refusing to extend prior Illinois Supreme Court decisions which] sought to protect a patient who is unaware that the individual providing him or her medical treatment is not an employee or agent of the hospital or HMO from whom treatment is sought …[where] … we found a patient should have the right to look to the hospital or HMO in seeking compensation for any negligent care.”
In the case the Illinois Supreme Court was deciding, the Illinois medical malpractice plaintiffs (husband and wife) alleged that the medical staff who treated the wife at the Erie Family Health Center (“Erie”) had negligently failed to identify and address issues surrounding her shortened cervix and bicornuate uterus, causing her to deliver her daughter prematurely at 26 weeks’ gestation. Erie is a Federally Qualified Health Center (“FQHC”) that comprises several clinics in the Chicago area.
The plaintiffs further alleged in their Illinois medical malpractice lawsuit that the wife was never told that the healthcare workers at Erie were not employees of Northwestern Memorial Hospital (“NMH”). Erie was originally founded as a project between NMH and Erie Neighborhood House in 1957; NMH provides financial support, technological assistance, and strategic support.
The plaintiffs alleged that based on the wife’s knowledge of NMH’s reputation and the information provided to her by Erie, she believed that if she received prenatal care from Erie, she would be receiving treatment from NMH health care workers.
The Illinois Supreme Court held in a prior case that a hospital may be found vicariously liable under the doctrine of apparent authority for the negligent acts of a physician providing care at a hospital, regardless of whether the physician is an independent contractor, unless the patient knows or should have known that the physician is an independent contractor.
There are three elements that must be satisfied by the plaintiff for a hospital to be liable under the doctrine of apparent authority: (1) the hospital, or its agent, acted in a manner that would lead a reasonable person to conclude that the individual who was alleged to be negligent was an employee or agent of the hospital; (2) where the acts of the agent create the appearance of authority, the plaintiff must also prove that the hospital had knowledge of and acquiesced in them; and (3) the plaintiff acted in reliance upon the conduct of the hospital or its agent, consistent with ordinary care and prudence.
In the present case, the Illinois medical malpractice plaintiff sought treatment at Erie but sought to impose liability on NMH. The Illinois Supreme Court stated that Erie is neither owned nor operated by NMH. While Erie receives some charitable financial and technical assistance from NMH, Erie is an FQHC that relies heavily on federal grants and Medicaid reimbursement to provide underserved communities with primary and preventative care regardless of an individual’s ability to pay. Erie’s employees are considered federal employees, and suits against Erie or its employees can only be maintained under the Federal Torts Claim Act. Erie does not utilize the Northwestern name. There is no Northwestern-related branding or the use of Northwestern’s trademark purple color by Erie.
The Illinois Supreme Court stated that it recognized that physicians employed by Erie routinely have privileges to practice at NMH, but merely granting a physician employed by another entity hospital staff privileges alone does not create an apparent agency relationship.
The Illinois Supreme Court answered in the negative the certified question before it: ““Can a hospital be held vicariously liable under the doctrine of apparent agency set forth in Gilbert v. Sycamore [Municipal Hospital], 156 Ill. 2d 511 (), and its progeny for the acts of the employees of an unrelated, independent clinic that is not a party to the present litigation?”
Source Yarbrough v. Northwestern Memorial Hospital,, 2017 IL 121367
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