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

is injured by a fellow workers’ negligence is usually limited to a worker’s
compensation recovery. Some courts created an exception to this rule if the negligent
worker was a licensed professional who was expected to exercise independent
judgment: “According to the dual-capacity doctrine, an employer who is generally
immune from tort liability may become liable to his employee as a third- party
tortfeasor; if he occupies, in addition to his capacity as employer, a second capacity
that confers on him obligations independent of those imposed on him as an
employer.” [Weber v. Armco, Inc., 663 P.2d 1221 (Okla. 1983).] Physicians have
been specific targets of this doctrine, based on their independent license and duties to
the patient. [Glenn. Employer’s Liability to Employee for Malpractice of Physician
Supplied by Employer, 16 A.L.R. 3d 564 (1968 & Supp. 1996).]
The issue will not be a workers’ compensation bar, but the unwillingness, or in the
case of ERISA plans, inability of the courts to hold MCOs responsible for decisions
to deny care. As plaintiffs search for additional defendants, especially those whom
they can portray as concerned only with the bottom line, they will sue physician
medical directors and other physician administrators in MCOs. The courts may hold
as follows: “Once a physician, always a physician”—that is, every physician who
reviews the patient’s care or chart, or supervises those that do, or in any other way
has the authority to affect care decisions, has independent liability for injuries to the
patient. If the medical director’s compensation includes any component tied to
reduction in services, the medical director would be in a Shea conflict of interest
position.
Such a judicial construct would be consistent with courts’ ambivalence about
medicine as “just another business.” The physician’s role in MCOs should be as a
conscience, ensuring that patients are properly treated. It is also the best posture to
assume in attempting to convince courts to reject employment terms in MCO
contracts that prevent physicians from exercising independent medical judgment.
2. Medical Licensing Issues
The right to define and regulate medical practice is reserved to the states. Since
ERISA has denied the states the right to regulate most private insurance plans, state
legislatures and medical licensing boards are asserting their authority to regulate how
physicians practice in MCOs. The central target of this regulation will be medical
directors because they are the nexus between the plan and patient care. The two main
risks will be improper supervision of NPPs and breach of the physician’s fiduciary
duty.
If an MCO does not ensure proper supervision of NPPs, the medical director could be
held liable for facilitating the unauthorized practice of medicine. For example, many
states require an NPP to be supervised by a specific physician, and limit the number
of NPPs that any given physician can supervise. These rules include the use of
protocols approved by the supervising physician, and the ready availability of the
supervising physician. If the MCO does not meet these requirements, such as by
allowing the NPP and the supervising physician to work different shifts or in different
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