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Appellate panel: Hospitals not on hook for malpractice claims because doctors not employees

By Dan Churney | Jun 15, 2015

Whether or not several physicians committed malpractice at a hospital run by Centegra Health Systems, a state appellate panel has ruled the hospital and its parent organization are not to blame, because the physicians were not employees of the hospital.

In 2007, doctors Amir Heydari and Aaron Schwaab performed gastric bypass surgery on Julie Magnini at a Centegra hospital. After the procedure, Magnini said she suffered complications which required her to be repeatedly hospitalized and to undergo further surgeries with Heydari and Schwaab, as well as other doctors.

Centegra operates health care facilities in McHenry County, including hospitals in McHenry and Woodstock.

In August 2010, Magnini and her husband filed a medical malpractice suit against Heydari, Schwaab and Centegra. There were other defendants, but the Appellate Court found they were not pertinent to the issue on appeal.

Plaintiffs alleged Heydari and Schwaab were negligent in performing the initial surgery and improperly treated her ensuing complications. Plaintiffs further claimed the doctors were agents and employees of Centegra Health Systems. Plaintiffs did not accuse Centegra of direct or institutional negligence, but nonetheless claimed Centegra was on the hook for Magnini’s alleged injuries at the hands of the doctors through the theory of “vicarious liability.”

Centegra countered the doctors were independent contractors, and Centegra did not control how they cared for patients. Heydari was “an independent member of the medical staff at Centegra” and Schwaab and two other doctors were employed by Surgical Associates of Fox Valley, according to Centegra.

Heydari acknowledged he had an administrative role at the Centegra Hospital, as director of the facility’s bariatric (weight loss) services. Heydari also pointed out he had a clinical role at the hospital as an independent surgeon, but the administrative and clinical duties were “two different hats.” When he operated on Magnini, he was not acting as a Centegra employee or administrator. Similarly, the three other doctors testified they were not employed by Centegra.

In turn, plaintiffs argued the doctors were indeed Centegra’s agents, as evidenced by agreements naming Heydari Centegra’s bariatric director and designating Surgical Associates of Fox Valley the sole provider of bariatric services at Centegra, as well as Centegra’s medical staff bylaws.

Cook County Judge John P. Kirby was not persuaded by plaintiffs’ arguments and granted Centegra’s motion for summary judgment. Plaintiffs appealed to the Illinois First District Appellate Court, which was also not persuaded, affirming Kirby’s decision.

Appellate justices noted plaintiffs needed to show the doctors were Centegra’s agents, Centegra controlled or had the right to control the doctor’s conduct and the alleged conduct fell within the scope of Centegra. Of these three elements, justices said the right of control was primary.

All the doctors testified they exercised independence in making patient care decisions, which the agreements between Heydari and Centegra, and Surgical Associates of Fox Valley corroborated.

“Centegra shall neither have nor exercise any control over the methods by which SAFV or [Heydari] shall carry out his general medical duties, and Centegra shall assume no responsibility or liability associated with such conduct by SAFV or [Heydari],” was the language in one of the contracts.

As far as plaintiffs’ argument the bylaws short circuited the independent contractor provisions of the Heydari-SAFV-Centegra agreements, the Appellate Court said the bylaws only directed doctor actions that were “collateral to patient care decisions.” As an example, the bylaws direct surgeons to be in the operating room at the times set for surgeries, but do not tell surgeons how to perform surgeries.

To underscore this point, appellate justices referred to a 1972 Third District Appellate Court ruling that said that when it comes to a hospital and its staff who are not employees, “. . . both parties must cooperate for the purposes of hospitalization to succeed. The necessity for cooperation neither authorizes nor requires a change or an abandonment of the independent roles of each.”

Regarding the contract between Centegra and SAFV, plaintiffs contended SAFV was nothing more than a dressed-up employment contract between Centegra and the doctors, with SAFV serving as “merely an accommodation” to pass money from Centegra to the doctors. However, appellate justices wrecked this argument on the same rock: The Centegra-SAFV contract did not permit Centegra to oversee the medical decisions of the doctors. Besides, plaintiffs did not say how the doctors were compensated.

Justice Mary Anne Mason delivered the Appellate Court’s judgment and opinion, with Justices Aurelia Pucinski and Michael B. Hyman concurring.

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