Hospital Liability for Independent Contractors

Minnesota hospitals frequently hire independent contractors to provide medical care to patients. Hospitals have contended for years that they are not legally responsible for malpractice committed by these contractors because these they are not employees of the hospital.

In 2020, the Minnesota Supreme Court's decision in Popovich v. Allina Health System recognized that hospital can now be liable for malpractice committed by contract physicians (and other independent contractors) under the legal doctrine of apparent authority. Under this doctrine, a patient harmed by the malpractice of an independent contract can sue the hospital if (1) the hospital held out the physician as having authority to act on its behalf or knowingly permitted the physician to act on its behalf, and (2) the patient looked to the hospital to provide care and relied on the hospital to select the personnel who would provide care.

The Popovich decision reflects the reality of the patient hospital experience. Patients, particularly those needing emergency care, are not in a position to inquire about the employment status of each provider or bargain with the hospital about which providers will care for them. Hospitals, on the other hand, retain the physicians, grant them privileges to treat patients, and realize a financial benefit from the arrangement.