Public Health Law Map - Beta 5 - Medical and Public Health Law Site

out of the hospital. MCOs promise employers that cost-conscious physicians will
provide better and cheaper care. Physicians who do not deliver cost-effective care
generally are not allowed to continue to treat MCO patients. [Blum, JD. The
evolution of physician credentialing into managed care selective contracting. Am J
Law Med. 1996;22:173, 189–192. ]
As discussed later, the denial of medically necessary care can put the physician in a
legal quandary. However, it is the hidden incentives to deny care that pose the
starkest conflict between the interests of physicians and those of their patients.
These can breach the physician’s fiduciary duty to the patient, which is actionable
on its own, as well as support criminal law actions for fraud.
B. Fiduciary Duty
Fiduciary law is an ancient legal device to protect the interests of relatively powerless
persons:
“Courts of equity have carefully refrained from defining the particular instances of
fiduciary relations in such a manner that other and perhaps new cases might be
excluded. It is settled by an overwhelming weight of authority that the principle
extends to every possible case in which a fiduciary relation exists as a fact, in which
there is confidence reposed on one side and the resulting superiority and influence on
the other. The relation and the duties involved in it need not be legal. It may be moral,
social, domestic, or merely personal.” [Beach v. Wilton, 91 N.E. 492, 495 (Ill. 1910).]
1. Physicians as Fiduciaries
It is hard to imagine situations when one is more in the power of another than for
treatment of serious illness and injury. In the words of one court,
[T]he physician-patient relationship has: … its foundation on the theory that
the former [physician] is learned, skilled and experienced in those subjects
about which the latter [the patient] ordinarily knows little or nothing, but
which are of the most vital importance and interest to him, since upon them
may depend the health, or even life, of himself or family. [T]herefore, the
patient must necessarily place great reliance, faith and confidence in the
professional word, advice and acts of the physician. [Witherell v. Weimer,
421 N.E.2d 869 (Ill. 1981).]
Nearly every state has case law holding that the physician–patient relationship is a
fiduciary relationship. These cases are usually medical malpractice suits where on of
the following questions may be posed: (1) Did the physician hide some negligent act
to let the statute of limitations run?; (2) Did the physician provide the patient proper
medical information about the patient’s condition in other than informed consent
situations?; (3) Was there sexual misconduct by the physician?; (4) Did the physician
breach the confidential relationship?; (5) Did the physician fraudulently conceal
information such as leaving a foreign body in a patient after surgery?; and (6) Did the
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