We're a partnership of three FPs. One partner has been sick for several months, so we're planning to hire a part-time FP to work in the office two days a week. We would not be sharing call with him. What's the best way to deal with malpractice liability? Should we offer him a contract as a part-time employee or as an independent contractor?
Any contract must be clear about which party will purchase the medical malpractice insurance, for what limits, and for what period.
If the part-timer pays for his own coverage, the practice should buy the coverage and deduct the cost from his compensation.
A practice can be held liable for the negligence of an independent contractor.
Q: We're a partnership of three FPs. One partner has been sick for several months, so we're planning to hire a part-time FP to work in the office two days a week. We would not be sharing call with him. What's the best way to deal with malpractice liability? Should we offer him a contract as a part-time employee or as an independent contractor?
A: If you hire the part-timer as an employee, then the legal principle of "respondeat superior" ("let the superior answer") applies. That means that the employer is responsible for the acts of the employee when those acts are within the scope of his employment. Because the employer exerts some degree of control over the employee, he's therefore held accountable for the results of the employee's actions.
So if the part-time employee is served with a complaint, the practice will be the primary defendant, and would have to pay any judgment or settlement. It's generally the practice's responsibility to provide malpractice coverage for the employee.
In theory, an independent contractor is responsible for his own acts, answers for himself, and pays any judgment on his own. He can be defined as one who is hired to undertake a specific project, but who is left free to do the assigned work and choose the method of accomplishing it. Unlike an employee, an independent contractor who commits a wrong while carrying out the work does not create liability for the one who did the hiring.
But as a practical matter, it seems doubtful that your practice would escape liability, or that the IRS or the courts would consider the doctor to be a legitimate independent contractor.
If the independent contractor were to be sued for malpractice, the partnership would most likely be named, as well. Part of the claim may be shared responsibility for a specific patient. Most states observe the doctrine of joint and several liability wherein one defendant can be held accountable for the acts of another. So if you and your partner were involved in the case and can be shown to have departed in some way from the standard of care, you could be responsible for the entire judgment.
Even if the contractor handled all the patient care himself, the partnership could still be sued if the patient perceived the partnership as being responsible. In some states, organizations can be held responsible for the acts of nonemployed workers when it appears that those individuals are acting as agents of the organization.
Any contract, whether for employment or an independent contractor, must be clear about which party will purchase the medical malpractice insurance, for what limits, and for what period. But if your contract stipulates that the part-timer pays for his own coverage, it's a good idea for the practice to purchase it and then deduct the cost from his compensation. That way, you'll make certain you've got adequate insurance during the period of the part-timer's contract.
Ask your insurer about locum tenens and part-time insurance. Locum tenens might be a possibility if the part-time arrangement will be short, limited in scope, and/or may be filled by successive parties. Discounts for part-time practice are still offered by some insurers, but the market has hardened, and you may not be able to get a break on the premiums.