Thomas A. Moore and Matthew Gaier

Our last column addressed vicarious liability of hospitals for malpractice by non-employee physicians where the patient entered through the emergency room or otherwise sought care from the hospital rather than from a particular physician. In those circumstances, the hospital should be liable for any negligent care because the patient was relying directly upon the hospital to provide care and treatment.

As we noted in that column, when someone is admitted to a hospital as the patient of a private attending physician, the hospital may still be subject to vicarious liability under the doctrine of ostensible agency for physicians who become involved in the patient’s care during the admission. This question commonly arises with anesthesiologists and radiologists, although it may also apply where any physician is assigned by a hospital to provide a service or a consultation. This month’s column examines hospital liability under ostensible agency in these circumstances.

The critical requirement for ostensible agency is that the patient must have had a reasonable belief that the physician was employed by, or acting on behalf of, the hospital. However, the specific elements of the ostensible agency doctrine have been the subject of varying articulations over the years. For instance, the First Department has typically stated that the doctrine applies “where the physician was provided by the hospital or was otherwise acting on the hospital’s behalf, and the patient reasonably believed that the physician was acting at the hospital’s behest.”1 In recent years, however, the Second and Third Departments have described the doctrine as requiring words or conduct by the hospital that were misleading and that the patient relied upon in accepting the physician’s services. As set forth in Dragotta v. Southampton Hosp., 39 A.D.3d 697 (2d Dept. 2007):

[T]here must be words or conduct of the principal, communicated to a third party, which give rise to the appearance and belief that the agent possesses the authority to act on behalf of the principal. The third party must reasonably rely on the appearance of authority, based on some misleading words or conduct by the principal, not the agent. Moreover, the third party must accept the services of the agent in reliance upon the perceived relationship between the agent and the principal, and not in reliance on the agent’s skill.

There are two elements to such a claim of apparent or ostensible agency. To establish the “holding out” element, the misleading words or conduct must be attributable to the principal. To establish the “reliance” element, the third party must accept the agent’s services and submit to the agent’s care in reliance on the belief that the agent was an employee of the principal. In the context of a medical malpractice action, the patient must have reasonably believed that the physicians treating him or her were provided by the hospital or acted on the hospital’s behalf (citations omitted).2

While this articulation of the elements of the doctrine may sound daunting, it merely applies the underlying concepts of holding out and reliance cited in the foundational ostensible agency decisions discussed in our last column—Hannon v. Siegel-Cooper, 167 N.Y. 244 (1901), Hill v. St. Clare’s Hosp., 67 N.Y.2d 72 (1986), and Mduba v. Benedictine Hosp., 52 A.D.2d 450 (3d Dept. 1976). Accordingly, a hospital may be held liable for the malpractice of a physician where it has engaged in some conduct or used words that reasonably led the patient to believe that the physician was employed by, or providing services on behalf of, the hospital, and the patient accepted those services based upon that belief.

One of the more commonly litigated subjects relative to ostensible agency involves hospital liability for anesthesiologists. That was the issue in Dragotta, where the plaintiffs asserted that the decedent died from the improper administration of Demerol in the face of chronic obstructive pulmonary disease following a knee replacement revision. The operation was performed by a private attending orthopedic surgeon. In finding that the plaintiffs established issues of fact as to the hospital’s liability for the two defendant anesthesiologists under ostensible agency, the Second Department noted that the contract between the hospital and the anesthesiology group provided that only anesthesiologists from the group could provide anesthesiology services at the hospital, the group’s anesthesiologists could not practice elsewhere without written approval, and the group had to nominate one of its members to be director of the hospital’s anesthesiology department. It noted that all forms and questionnaires used by the anesthesiologists, including one filled out and signed by the decedent, bore the hospital’s logo or letterhead. The court further noted that the decedent had not met one of the anesthesiologists until the day of the surgery and had never even met the one who took over during the surgery. It also cited evidence that the decedent may have had pre-operative testing by an anesthesiologist at the hospital (rather than the group’s office), and that hospital patients, including the decedent, were not informed that the anesthesiologists were not employed by the hospital. Applying this evidence to the requirements for ostensible agency, the court concluded:

The fact that the anesthesiologists must practice exclusively at the Hospital absent written approval by the Hospital, and that the Hospital may only use the group’s anesthesiologists, raises a triable issue of fact as to whether the Hospital was holding itself out as a provider of anesthesia services, notwithstanding that the anesthesiologists were not employees of the Hospital, a fact that was never disclosed to any of the Hospital’s patients. The fact that all of the forms and questionnaires used by the anesthesiologists bear the logo of the Hospital, including those filled out and signed by the decedent, together with evidence that pre-anesthesia testing of the decedent may have taken place at the Hospital, raises a triable issue of fact as to whether the decedent reasonably believed that the anesthesiologists were provided by the Hospital or acted on its behalf.

Conversely, in King v. Mitchell, 31 A.D.3d 958 (3d Dept. 2006), the Third Department found that similar evidence failed to establish issues of fact as to ostensible agency, albeit under different circumstances. The 17-year-old plaintiff was rendered paraplegic as a result of a hematoma that developed after surgery to remove a tumor. Consent for the surgery was provided by her mother, who was an employee of the defendant hospital. In seeking to hold the hospital liable for the anesthesiologist, Dr. Mitchell, the plaintiff relied on the fact that the hospital’s logo appeared on the anesthesia questionnaire and consent forms, that the forms failed to indicate that Mitchell was not a hospital employee, and that the hospital’s website indicated that it had an anesthesiology department and provided Mitchell’s contact information at the hospital. The court disregarded the website because it was not raised before the trial court and because there was no evidence that the plaintiff or her mother had accessed it to obtain information on Mitchell. Regarding the forms, the court stated that while it would be “preferable for hospitals to clarify in their informational and consent forms the status of those physicians enjoying privileges at the hospitals, no authority suggests that [the hospital] was obligated to affirmatively disclaim Mitchell as an employee in order to avoid the creation of ostensible agency.” It further found that “a physician’s use of a hospital’s stationery, without more, is insufficient to satisfy the holding out portion of the test.” Under the circumstances of this case, the court found that the fact that the plaintiff did not independently seek out Mitchell’s services and that he assumed the role of her anesthesiologist was insufficient to establish that the hospital held him out him out as an employee. In connection with this, it noted that the plaintiff’s mother was aware that some physicians who treated patients at the hospital were not hospital employees but independent physicians with privileges to practice there. It further found that the reliance element was defeated by the mother’s admission that whether Mitchell was an employee or an independent contractor played no role in her decision to accept his services.3

Another specialty that is commonly the subject of ostensible agency claims is radiology. In Sampson v. Contillo, 55 A.D.3d 588 (2d Dept. 2008), after reciting the elements it had identified in Dragotta, the Second Department found an issue of fact as to the hospital’s liability for a radiologist under ostensible agency based on evidence that the radiologist’s group provided services for all hospital inpatients, outpatients and emergency room patients, the radiologist provided services only for hospital patients and the group’s relationship with the hospital prevented it from taking on outside work, the hospital owned the imaging equipment used by the radiologist, and the X-rays involved in the case were taken in the hospital.

The Third Department, in Thurman v. United Health Servs. Hosps., 39 A.D.3d 934 (3d Dept. 2007), took a more circumspect view under similar circumstances. The decedent’s private gastroenterologist ordered a CT scan that was interpreted by the on-call radiologist, who was neither known to, nor requested by, the decedent or his private doctor. The radiologist’s group had an exclusive contract to provide radiology services at the hospital, a fact known to the gastroenterologist. The Third Department found that the hospital was not liable for the radiologist’s negligent interpretation of the scan as a matter of law. As in King, it again found it insufficient that the decedent was not informed that the radiologist was not a hospital employee and that he had assumed the role of reading the scan. It also again found that the appearance of the hospital’s logo on the CT scan report was insufficient, without more, to establish holding out, and that the hospital’s website was of no significance absent an allegation that the plaintiff or decedent relied upon it.4

Ostensible agency may also be invoked for physicians brought in for consultations in hospitals. In Malcolm v. Mount Vernon Hosp., 309 A.D.2d 704 (1st Dept. 2003), the First Department found issues of fact regarding hospital liability for a consulting cardiologist. The plaintiff was sent to the hospital’s emergency room by his private physician, Dr. Edwards, after complaining of coughing, chills, shortness of breath and difficulty breathing. After he was admitted for pneumonia, Dr. Edwards consulted with Dr. Lee, a cardiologist on staff at the hospital, who taught residents in ICU and held a clinic at the hospital four or five times a year. Dr. Lee evaluated the plaintiff, made a diagnosis, prescribed medications and saw him for follow-up in the ICU five times. At one of the follow-ups, the plaintiff suffered a stroke as a result of cardiomyopathy and a blood clot breaking off in his heart. It should be noted that although the patient was admitted through the ER, he was under the care of his private attending during the admission, such that this is not a case where the patient was seeking care directly from the hospital. Nevertheless, the court found issues of fact as to the hospital’s liability for Dr. Lee under ostensible agency:

The record before the motion court was insufficient to make a conclusive determination that the defendant Hospital was not responsible for any alleged negligence by Dr. Lee. Although Dr. Lee was not a Hospital employee, Dr. Edwards chose Dr. Lee from a number of cardiologists “on staff” at the Hospital who are available for consultations. Dr. Lee had a number of other teaching and clinical responsibilities at the Hospital, and he was called to assist with plaintiff’s care in the ICU in response to a page by Hospital employees. Collectively, these facts preclude our conclusion, as a matter of law, at this stage in the proceedings, that Dr. Lee was not “provided by the hospital or was otherwise acting on the hospital’s behalf” (citations omitted).

The court further found that the hospital failed to show that the plaintiff could not have reasonably believed that Dr. Lee was acting at the hospital’s behest. Emphasizing that “[a]ll of the attendant circumstances of the particular case are relevant to making this determination,” it noted that the doctor’s treatment was conducted in the hospital and that there was no evidence that “the patient requested a particular doctor, had any prior relationship with that physician and or was aware of the particular nature of the doctor’s affiliation with the medical facility.”

The manner in which the physician came to treat the patient is central to any ostensible agency determination. If the patient’s private doctor specifically brought in or made a referral to the subject physician, ostensible agency will not apply.5 If the hospital assigned the doctor or established the mechanism by which the doctor became involved, it may apply. Thus, in Keitel v. Kurtz, 54 A.D.3d 387 (2d Dept. 2008), where the patient was admitted for a revision of a hip prosthesis and alleged malpractice during the aftercare, the Second Department found issues of fact regarding the hospital’s liability for a doctor “assigned by the hospital as the attending physician of the plaintiff’s decedent while he recuperated in the hospital’s rehabilitation division.” Considering all attendant circumstances, the court found, the hospital failed to establish that the patient could not have properly believed that it had provided the doctor.

However, as demonstrated by Thurman, the mere fact that a physician is on-call pursuant to the hospital’s schedule may not be sufficient. In Muslim v. Horizon Med. Goup, P.C., 118 A.D.3d 681 (2d Dept. 2014), the pregnant plaintiff filled out a pre-admission obstetrical assessment form in which she was asked to check one of two private pediatric practices to treat her baby after delivery, which she did. When she went into labor, her private obstetrician assembled a team, which included the pediatrician from the group the plaintiff had marked on the form. The pediatrician testified that he and another doctor were the only two pediatricians with privileges at the hospital, they shared the hospital’s on-call schedule, and they were paid directly by the patients. While at the hospital, the plaintiff’s mother signed a consent form authorizing the hospital through its staff to provide care and treatment. Under these circumstances, the court found that there was no evidence that the plaintiff was misled by the hospital into believing that the pediatrician was part of the hospital’s staff or its employee, or that she retained his services based on such a belief. The form signed by her mother was insufficient to support a contrary finding.

The essential requirements for holding hospitals liable under ostensible agency are that the patient reasonably perceived that the physician was being provided by the hospital and relied on that perception in accepting the physician’s services. The patient’s belief in that regard must be attributable to some words or conduct by the hospital—the holding out requirement. This may include the use of the hospital logo or stationary, a reference made on its website or an advertisement, or circumstances created by the hospital in the manner in which the physician provides services at the hospital or how the physician came to be involved in the patient’s care. In order to satisfy the reliance requirement, there must be evidence of a nexus between the factors establishing holding out and the patient’s decision to be treated by the physician. There is no magic formula, but the more factors that can be shown to exist, the stronger the claim.

Endnotes:

1. Malcolm v. Mount Vernon Hosp., 309 A.D.2d 704 (1st Dept. 2003), lv. dismissed, 2 N.Y.3d 793 (2004), citing Soltis v. State of New York, 172 A.D.2d 919 (3d Dept. 1991); see also Warden v. Orlandi, 4 A.D.3d 239 (1st Dept. 2004); Sarivola v. Brookdale Hosp., 204 A.D.2d 245 (1st Dept. 1994), lv. denied, 85 N.Y.2d 805 (1995).

2. See also Keesler v. Small, 140 A.D.3d 1021 (2d Dept. 2016); Sullivan v. Sirop, 74 A.D.3d 1326 (2d Dept. 2010); Thurman v. United Health Servs. Hosps., 39 A.D.3d 934 (3d Dept. 2007); King v. Mitchell, 31 A.D.3d 958 (3d Dept. 2006).

3. Other decisions addressing hospital liability for anesthesiologists include: Keesler, supra n.2 (issues of fact as to hospital liability for anesthesiologist who administered an epidural anesthesia); Searle v. Cayuga Med. Ctr. at Ithaca, 28 A.D.3d 834 (3d Dept. 2006) (sufficient evidence to hold hospital liable for the anesthesiologist, but new trial required because jury charge did not cover all of elements of ostensible agency); Agustin v. Beth Israel Hosp., 185 A.D.2d 203, 206 (1st Dept. 1992) (sufficient evidence to hold hospital liable for negligence of an anesthesiologist during and after a surgery “based on decedent’s reasonable belief that she was receiving care from the hospital and not an independent entity”).

4. Other decisions addressing hospital liability for radiologists include: Sullivan, supra, n. 2 (claims against hospital based on radiologist who interpreted ultrasound were dismissed where plaintiff’s mother’s affidavit was insufficient to show that her perception of radiologist’s employment status was based on words or actions by hospital, or that she relied on that “perceived association” in seeking the radiologist’s services); Sarivola, supra, n. 1 (hospital not liable where it did not send plaintiff to the radiologist and under totality of the circumstances the plaintiff could not have reasonably believed that the radiologist was employed by the hospital); Culhane v. Schorr, 259 A.D.2d 511 (2d Dept. 1999) (plaintiff failed to establish triable issue that hospital should be estopped from denying liability for negligence of independent radiology laboratory).

5. See Pratt v. Haber, 105 A.D.3d 429 (1st Dept. 2013); Bevelacqua v. Yonkers General Hosp., 10 A.D.3d 668 (2d Dept. 2004); O’Regan v. Lundie, 299 A.D.2d 531 (2d Dept. 2002).