Petrovich v. Share Health Plan of Illinois, Inc. – Case Brief
Petrovich v. Share Health Plan of Illinois, Inc., 188 Ill. 2d 17, 719 N.E.2d 756 (Ill. 1999).
Facts: Petrovich (P) alleged that Freidman, her doctor, and Share Health Plan (D), her HMO, were liable for the negligent and tardy diagnosis of her tongue cancer. Share Health Plan operated as a financing entity in arranging and paying for health care treatment by contracting with independent medical groups and practitioners. Share did not employ physicians directly, operate or maintain health care facilities, or supervise the administration of medical treatment.
Share provided beneficiaries with a handbook that described the primary care physician as ‘your Share physician’ and contained references to ‘our staff’ and ‘Share physicians.’ The handbook also referred to the offices of the doctors as ‘Your Share physician’s office.’
Petrovich received the handbook but was not provided with a copy of the contract between Dr. Friedman and Share which described physicians operating through the plan as independent contractors and not employees or agents. Petrovich was unaware of this relationship and believed that her doctor was an employee of the HMO.
Issue: Can an HMO be vicariously liable for the negligence of its independent contractor physicians?
Holding and Rule: Yes. An HMO can be vicariously liable for the negligence of its independent contractor physicians via apparent authority or implied authority.
As a general rule, no vicarious liability exists for the actions of independent contractors. However vicarious liability under the doctrine of respondeat superior may be imposed for actions of independent contractors when an agency relationship is established under either the doctrine of apparent authority or implied authority.
Apparent Authority: Under apparent authority, a principal will be bound by those who have agency through direct authority, and by those who appear to have such authority. The doctrine functions like an estoppel. This cause of action requires an impression fostered by the actor and justifiable reliance by the patient.
In this case the handbook and the testimony by Petrovich support the conclusion that Share employees provided the health care to beneficiaries. It did not inform her that the care was provided by independent contractors. The record contains no information that she knew or should have known of the contracts between Share and its physicians.
We disagree with Share’s contention that Petrovich cannot establish justifiable reliance because she did not select the provider. Petrovich’s employer selected Share and she had no choice of health plans. She had no prior relationship with Dr. Friedman and the facts are sufficient to raise the reasonable inference that she relied upon Share to provide her health care services.
Implied Authority: Share exerts sufficient control over its doctors and their treatment of patients to negate their status as independent contractors. Petrovich is entitled to trial under both apparent and implied authority.