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

to influence a treating doctor’s referral practices when the patient needs
specialized care is certainly a material piece of information. This kind of
patient necessarily relies on the doctor’s advice about treatment options,
and the patient must know whether the advice is influenced by self-serving
financial considerations created by the health insurance provider. [Shea,
107 F.3d at 628.]
This is the first major case to find that a health plan, as an ERISA fiduciary, has a
duty to disclose incentive plans to the subscribers. The Shea case provides little
benefit to the plaintiff in her claims against the plan because the statutory recovery
under ERISA has not been litigated and may be limited to the value of the
insurance premiums. For medical care practitioners, however, Shea sends a clear
message: medical care practitioners, especially physicians, as fiduciaries, have a
duty to disclose incentive plans that may negatively influence their decision
making for individual patients’ care.
D. Team Care Issues
Medical care has become a team effort. Most of the laws dealing with responsibilities
of physicians and nonphysician medical care providers [This term is used to denote
physician’s assistants, nurse practitioners, child health associates, public health nurses,
and other personnel with medical care training who participate in the medical care
delivery team.] (NPPs) are out of touch with modern practice patterns. This is most
evident in MCOs where NPPs are widely used with very diffuse supervision. Unlike
private practice settings where there are a few NPPs reporting to a smaller number of
physicians, NPPs in MCOs are often used in situations where they have no single
physician who is responsible for their practice. This is a legal problem because in
many situations the law, as embodied in the cases and statutes of each state, is at odds
with the routine practice of medicine. The law presumes that all patients will have a
single, identified treating physician who will control all aspects of the patient’s care,
and who is the boss of all the nonphysician members of the medical care team. This is
not the case in most MCO practice.
1. Vicarious Liability
In general, employers are responsible for the actions of their employees. This is
respondeat superior, or the master-servant relationship, a term that dates the origins
of the concept. More generally, liability for actions of others is called vicarious
liability. MCOs are responsible for the actions of both physician and NPP employees.
As discussed above, this responsibility is not affected by ERISA. Physicians who
employ NPPs and others in their own offices will also be vicariously liable for their
employees’ actions, as long as these actions are in the course and scope of their
employment. This rule poses two questions, Who is an employee? And what is the
course and scope of employment?
Although it is commonly assumed that employment status is determined by how a
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