Hospital Liability for Non-Employed Physicians

Hospitals in Georgia should closely examine their contracts with non-employed physicians and physician practices in light of the Georgia Supreme Court’s decision to deny certiorari in Thomas v. Tenet Healthsystem GB, Inc. d/b/a Atlanta Medical Center¹. This decision has far reaching consequences for hospital liability based on the actions of non-employed physicians.

Generally, a hospital is not liable in tort for acts or omissions of independent contractor physicians if the hospital complies with the requirements of O.C.G.A. § 51-2-5.1. The law sets out two tests for determining whether a physician is an independent contractor. The first test looks to the language of the contract between the hospital and the physician. The second test, used if no contract exists, is a fact intensive inquiry regarding the time, manner, and method of control exerted by the hospital over the physician. Hospitals in Georgia clearly want to structure their contracts to make clear the independent contractor relationship with non-employed physicians so as to avoid the second test, which leaves more room to argue that the hospital should not be immune from liability for the actions of a non-employed physician.

However, Thomas strikes a severe blow to hospitals’ efforts to minimize risk under the statute. A patient, treated by a non-employed physician at Atlanta Medical Center, suffered spinal cord damage that rendered her quadriplegic. In vacating the trial court’s grant of partial summary judgment to Atlanta Medical Center, the Georgia Court of Appeals held that a contract between a hospital and a physician group did not constitute a contract between the hospital and the physician for purposes of O.C.G.A. § 51-2-5.1; therefore, the second, fact-intensive test would have to be applied in determining whether the physician was an independent contractor for purposes of the statute. The Court of Appeals reached this conclusion despite the fact that the contract between the hospital and the physician group had explicit language binding the physicians of the group to the contract terms and explicit language indicating the physicians were acting as independent contractors².

Many in the hospital community hoped that the Georgia Supreme Court would take up the case and overturn the Court of Appeals, with the Georgia Hospital Association filing an amicus brief in support of same. However, the Supreme Court has now denied certiorari, leaving in place the Court of Appeals’ decision.

Hospitals in Georgia should consult with legal counsel as to ways to minimize risk related to tort actions related to non-employed physicians. It is important for hospitals to conduct a thorough review of their contracts to determine what service lines at their facilities might be impacted. The attorneys at Morris, Manning & Martin, LLP have extensive experience representing a full range of hospital clients, from small community hospitals to academic medical centers to large multi-hospital systems, and can help you navigate through these and other legal changes.

[2] The Court of Appeals had previously reached a similar decision in Foster v. Southern Regional Health System, Inc., but in that case, it was undisputed that no contract with the physicians existed.  See Foster v. S. Reg’l Health Sys., Inc., 734 S.E.2d 268 (Ga. Ct. App. 2012).

The information presented is for educational and informational purposes and is not intended to constitute legal advice. Readers should consult their professional advisor. Any opinions expressed within this article are solely the opinion of the featured author and not of Morris, Manning & Martin, LLP.