MDVIP, a large concierge medicine network, was recently penalized with a $8.5M award for the vicarious liability related to one of it’s independently contracted providers. MDVIP’s marketing material language was the primary reason for the award because it represented to patients that it “identifies the Country’s finest physicians and, through a rigorous selection process, chooses only doctors with excellent credentials, with excellent reputations and skill with bedside manner that you will come to appreciate.” MDVIP’s provider contract also enabled the Company to review the medical records of the providers and obligated the providers to ensure medical treatments meet the applicable standard of care which was used against MDVIP to show that they have “control” over the providers and create vicarious liability.
A determination of vicarious liability, such as the one charged against MDVIP, is found when a company or person is found liable for the actions of another. This liability usually arises in Employer/Employee relationships and Principal/Agent relationships. Vicarious liability is not intended to arise in an independent contractor relationship. However, due to the marketing language, the wording in the contract, and some control measures MDVIP had in place, the jury found that MDVIP was vicariously responsible for the acts of the independently contracted providers.
When comparing the findings of this case to your business, it should be noted that some of the things MDVIP was doing were extreme and this was filed in a venue that is notorious for being Plaintiff friendly. Additionally, MDVIP was marketing these services directly to the patients whereas Locum agencies market to facilities and providers. Still, some of the marketing and contract language used against MDVIP appears frequently in the marketing material, client contracts and provider contracts of many locum agencies.
The line between and independent contractor and employee varies by territory and is, at best, grey. But, some of the things you can do to mitigate the possibility of vicarious liability are:
- Review your contracts thoroughly. Anything that involves “control” or a locum agency directing how medicine is practiced can be used to create vicarious liability.
- Review your marketing material thoroughly. Verbiage mentioning the quality of your contracting process, the contracted providers, or your “verifications of credentials process” can create vicarious liability and can be deemed a representation relied upon to someone’s detriment.
For more information on vicarious liability and a no obligation assessment of your exposure, please feel free to reach out to us at 866-578-3161 or info@igaholdings.com. You can also visit LocumsMalpractice.com
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