Articles & Updates

A Review of Major Topics in Professional Liability: Ostensible Agency

Aug 4, 2023 | Articles & Updates

Article by Michelle D. Kaminski, Esq.

The rule of ostensible agency is heavily relied upon in the world of professional liability, particularly in the context of a summary judgment argument. Upon a review of both the rules that formed the basis for ostensible agency at current, and the case law that has been interpreting its meaning for over two decades, there seems to be a general outlook in favor of most plaintiffs, allowing a wide array of professionals to be considered an “ostensible agent” with relatively little to show for it.

MCARE Section 516/Rule 40 P.S. § 1303.516

Prior to the enactment of MCARE and the creation of 40 P.S. § 1303.516 in 2002, the test for ostensible agency was defined by cases like Capan v. Divine Providence Hospital, 430 A.2d 647 (Pa. Super. 1980) and Simmons v. St. Clair Memorial Hosp., 481 Pa. A2d 870 (Pa. Super. 1984), and was based on the Restatement (Second) of Torts, Section 429. This test was interpreted by the Court to require a plaintiff to prove the following: “(1) the patient subjectively looked to the hospital instead of a particular physician for treatment, and (2) the hospital acted or failed to act in a manner which caused the plaintiff to reasonably believe that [s]he was being treated by the hospital or its employee.” See, Oscarson v. Moses Taylor Hospital, 2016 WL 409712, at *6 (Lacka. Co. 2016).

More recently, since the enactment of MCARE Section 516 in 2002, the rule defining ostensible agency in Pennsylvania is defined as follows:

(a) Vicarious liability.–A hospital may be held vicariously liable for the acts of another health care provider through principles of ostensible agency only if the evidence shows that:

  1. A reasonably prudent person in the patient’s position would be justified in the belief that the care in question was being rendered by the hospital or its agents; or
  2.  The care in question was advertised or otherwise represented to the patient as care being rendered by the hospital or its agents.

(b) Staff privileges.–Evidence that a physician holds staff privileges at a hospital shall be insufficient to establish vicarious liability through principles of ostensible agency unless the claimant meets the requirements of subsection (a)(1) or (2).

The Court’s Interpretation and Relevant Case Law

As indicated above in red, this more recent interpretation of the rule of ostensible agency simplifies a plaintiff’s burden by requiring either justifiable belief or the “holding out” of the care at issue. In addition, while the “holding out” must constitute an affirmative act, such as an advertisement or other representation, in regards to the “the care in question,” case law explored further below indicates that the burden is not always difficult to meet.

The Court has and continues to define both the “reasonably prudent person” and what is considered “advertised or otherwise represented” in the context of ostensible agency, post-MCARE. This has been done through a variety of case law, a small cross-section of which are explored, below.

(a) The “Reasonably Prudent Person”

As above, the “reasonably prudent person” for purposes of Section 516 of MCARE must be “justified in the belief that the care in question was being rendered by the hospital or its agents.” In a relatively recent example of the “reasonably prudent person,” we see the Court extending this qualification to a physician treating a patient at a facility with which we are very familiar – Moses Taylor Hospital. Specifically, in the 2016 Oscarson case, one physician (Dr. Roche) advised patient that he was being referred to MTH for a biopsy with another, Dr. Yoder. Patient was contacted by MTH’s outpatient department, not the physician’s (Dr. Yoder) office, to schedule that procedure. Prior to the date of his biopsy, patient had never been treated by Dr. Yoder in a private office setting, nor had he ever met Dr. Yoder. In addition, Patient’s only interaction with and treatment by Dr. Yoder occurred at MTH; Dr. Yoder interpreted patient’s pathology slides at MTH; the only physician’s notes made by Dr. Yoder regarding patient’s biopsy procedure are contained in MTH’s outpatient department chart; and patient testified that he ‘“thought [Dr. Yoder] was part of Moses Taylor”’ Hospital. Ultimately, Plaintiff in Oscarson successfully established that a reasonably prudent person could conclude there was an agency relationship between Dr. Yoder and MTH. Oscarson, 2016 WL 409712 (2016). Note that the Oscarson holding was determined by Judge Terrance Nealon in Lackawanna County.

Especially instructive as to specifically what does not justify the existence of the “reasonably prudent person,” the Court in Green v. Pennsylvania Hosp., 123 A.3d 310 (Pa. 2015) states the following:

Although the [Simmons] case involved emergency room physicians, the court did not limit its holding to the emergency room setting, but instead restricted it… to those situations in which a patient seeks services at the hospital as an institution, and is treated by a physician who reasonably appears to be a hospital employee. Our holding does not extend to situations in which the patient is treated in an emergency room by the patient’s own physician after arranging to meet the physician there. Nor does our holding encompass situations in which a patient is admitted to a hospital by a private, independent physician whose only connection to a particular hospital is that he or she has staff privileges to admit patients to the hospital. Such patients could not reasonably believe his or her physician is a hospital employee. Green v. Pennsylvania Hosp., 123 A.3d 310 (Pa. 2015), citing Simmons v. Tuomey Regional Medical Center, 533 S.E.2d 312 (2000).

Note that while Simmons is a South Carolina case, the Green Court explained that due to the substantial similarity between MCARE Section 516 and the Restatement (Second) of Torts, Section 429, “cases from our sister states are instructive on the underlying question of whether, and under what circumstances, a reasonably prudent person… would be justified in believing the care in question was being rendered by the Hospital or its agents.” See, Green, 123 A.3d 310 (2015).

(b) “Advertising” or “Holding Out” Pursuant to MCARE

As above, Section 516 of MCARE requires that the care at issue must be “advertised or otherwise represented to the patient as care being rendered by the hospital or its agents.” In Kelley, it was contended that “the hospital’s website advertised that [Defendant] Dr. Clark was an employee or agent of the hospital.” However, whether the advertising was at any time directed “to the patient” was undetermined. The Court reasoned that “There is no evidence of record that [plaintiff] ever even saw the website in question. Moreover, the reason that [plaintiff] saw Dr. Clark at the hospital on March 30, 2007 was not because the hospital was “holding out” Dr. Clark as its agent, servant, or employee. Rather, it was because [plaintiff] had first reported to Dr. Clark’s office on March 30th for her scheduled appointment where Dr. Clark told her that he wanted to perform some tests at the hospital, at which point, the patient presented to the hospital to be treated and ultimately discharged by Dr. Clark.” Ultimately, the hospital had not sufficiently advertised, within the meaning of subsection (2), the care at issue. Kelley, 2012 WL 4865306, at *6 (Westmoreland Co. 2012).

On the other hand, a more recent case, Cicchella v. Jaditz, WL 2021 2142742 (Lackawanna Co. 2021), determined that advertising a physician as a provider on a facility website, even when some of the information posted is incorrect, can constitute an advertisement of their care.

Due largely to the expansion of the rule by MCARE, the precedent set relevant to the rule of ostensible agency – that it appears largely to favor a plaintiff’s case – has proved difficult to disestablish in recent years. Even in 2021, decisions consistent with the above (what constitutes the “reasonably prudent person” and what is considered “advertising”) have consistently been upheld by Courts local to our practice in PA. See, Cicchella v. Jaditz, WL 2021 2142742 (Lackawanna Co. 2021) (Judge Terrance Nealon decision). That being said, the nature of this issue invites the interpretation of a nearly endless stream and variety of situations potentially falling under the guise of ostensible agency, meaning there is likely room for a few decisions that favor defendants.