I have recently received several questions from physicians regarding the impact of mid-level provider (MLP) oversight on physician employment contracts and malpractice. Physicians have become concerned about their potential malpractice exposure for the work of MLPs. I have been consulted to help evaluate the differences between two employment options. The first pays well but with significant oversight of nurse practitioners (NPs) and physician assistants (PAs) (collectively, MLPs). The second pays less but with less collaborative care oversight responsibilities. I am also finding that employers are unwilling to include restrictions on MLP oversight as part of a physician’s contract. It is important for physicians to understand potential medical malpractice exposure for negligent acts of MLPs. This will assist physicians in properly calculating their risk/reward ratio and preference between potential options (1).
In short, Wisconsin’s MLPs are “employees of a healthcare provider” – they are not medical providers under Wisconsin law. Wisconsin law refers to MLPs as “non-provider employees” of physicians or health care organizations (HCOs) (2). When MLPs are within the course and scope of their employment, they cannot be held liable for any malpractice they may commit. They do not appear to have a need for their own malpractice insurance because they cannot be liable for malpractice (3). The physicians and HCOs who oversee them are responsible for any negligent health care, and all can be named in a lawsuit. As a practical matter, it is likely that the HCO’s malpractice insurer will provide coverage for negligent health care provided by MLPs, but this may not prevent the physician from being named in the lawsuit.
Mid-Level Provider Malpractice in Wisconsin: Ch. 655
Wis. Stat. Ch. 655 governs medical malpractice actions against health care providers and their non-provider employees. The statute defines two groups of health care providers: (1) individual licensed physicians and nurse anesthetists and (2) health care organizations, partnerships, and corporations. The statute intends to reduce the increasing cost of medical malpractice claims.
All health care providers must have malpractice insurance, covering at least $1M per occurrence and $3M for all occurrences per year. Health care providers must cover their own liability up to this amount and may obtain coverage for their own liability above that amount, but they are not liable for malpractice damages beyond their insured amount (4). Often, the HCO will provide this coverage to a physician under the terms of the employment contract. A patient-plaintiff can recover damages beyond these limits from the Patients Compensation Fund (Fund), which itself is funded by annual fees levied against health care providers.
Mid-Level Provider Malpractice Litigation
Patients Compensation Fund v. Lutheran Hospital – LaCrosse (1999) (5)
This often-cited Wisconsin Supreme Court case makes it clear that MLPs cannot be liable for malpractice in Wisconsin. In Lutheran Hospital, the patient suffered a cardiopulmonary arrest resulting in severe anoxia and permanent brain damage, allegedly caused by negligent post-operative care. The patient filed a negligence suit against the operating physician, the clinic, and the clinic’s insurers. At mediation, (6) the Fund agreed to pay up to $10,000,000. The treating physician and the clinic contributed $400,000. Lutheran Hospital’s insurer contributed $200,000. The Fund paid the remaining $9,400,000.
The Fund learned that a nurse involved in the patient’s care has purchased an individual professional liability policy, which would allegedly provide coverage for her malpractice as a nurse. It asked the court to find that Policy must contribute to the settlement. The Fund argued the nurse’s malpractice carrier was responsible for any negligence assigned to the nurse. The Wisconsin Supreme Court found that the nurse’s insurer was not obligated to contribute because a nurse cannot be liable for medical malpractice occurring while the nurse is conducting the health care provider’s business.
Rogers v. Saunders (Aurora) (2008) (7)
In Rogers, Cross-Country Staffing supplied Aurora with nurses, and agreed in its contract with Aurora to indemnify Aurora for liability caused by its nurses. Similar to Lutheran Hospital, the HCOs medical malpractice insurer attempted to ask a court to force the nurse staffing agency’s professional liability insurer to contribute to a medical malpractice settlement, this time based on a contractual promise between the insureds. While the court did not rule out a potential claim by Aurora against Cross-Country Staffing, the court did summarily dismiss the HCO’s medical malpractice insurer’s claim against the nurses professional liability insurer. This case again demonstrates that it is very hard to hold a nurse responsible for malpractice.
Kennedy v. Gander (SSM Urgent Care) (2021) (8)
In Kennedy, the patient was treated for a broken leg by a PA, Gander, at SSM Urgent Care. Gander was working at SSM pursuant to a locum tenens placement by a temporary employment agency. This case is unique in that the patient settled with the HCO and physician’s medical malpractice insurer, but then tried to bring a claim against the PA as the sole defendant. The court summarily dismissed this claim, finding once again that a PA is not a health care provider and cannot be liable for medical malpractice so long as the PA is acting within his or her scope of employment at the time.
Importantly, the orthopedic surgeon who was likely ‘on duty’ or otherwise responsible as the collaborating physician was named as a defendant, in addition to the PA and HCO. It appears that the HCOs insurer settled Kennedy’s claim and the physician was not personally responsible, but this did not prevent the physician from being named as a defendant. A savvy plaintiff’s attorney will name the HCO and any medical providers (as defined under Wis. Stat. Ch. 655) as might potentially be responsible for the employee.
Physician Responsibility for Mid-Level Provider Malpractice
Employment negotiations often turn on risk calibration. Sometimes you should consider how much compensation you need to accept a particular risk. Importantly, the HCOs medical malpractice insurer is highly likely to provide coverage for your potential exposure as a collaborating physician. If decreasing the potential to be named in a lawsuit is of high importance, then it is vital to understand that negligence committed by a MLP is the ultimate responsibility of the physician and HCO, not the MLP. The physician may be named as a defendant in a lawsuit caused by MLP negligence. Physicians should consider the economic pressures facing HCOs and growing use of MLPs, and evaluate how it could affect their job risk preferences.
(1) I defer a more global and encompassing discussion to books like Patients at Risk: The Rise of the Nurse Practitioner and Physician Assistant in Healthcare. Regardless of your political stance, I believe a correct understanding and evaluation of exposure for MLP malpractice is helpful.
(2) Including small group practices, multispecialty group practices, medical faculty practice plans, hospitals, or other institutions.
(3) Kennedy v. Gander (Wis. App. January 2021) (unpublished opinion).
(4) Id. at pg. 10.
(5) Patients Compensation Fund v. Lutheran Hosp.-LaCrosse, Inc., 588 N.W.2d 35, 223 Wis.2d 439 (Wis. 1999).
(6) For a detailed discussion of how mediation fits into a sound litigation strategy, please see my blog on Demystifying Small Business Litigation
(7) Rogers ex rel. Rogers v. Saunders, 750 N.W.2d 477, 2008 WI App 53 (Wis. App. 2008).
(8) Kennedy v. Gander (Wis. App. 2021) (unpublished opinion).