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HMO subsidiary could be held vicariously liable for the negligence of doctors under contract with them to provide medical services to a member of a health care plan. 224
Second, the Petrovich court held that liability may also be imposed
doctrine of implied authority could be used against an HMO to nullify a
that “an implied demonstrated that doctor so as to contractor, at least
agency existed where the facts and circumstances an HMO exerted such control over a participating negate that physician’s status as an independent with respect to third parties.”227
The holding by the Petrovich court, that an HMO could be held liable for the medical malpractice of its employed physicians, opened the door for suits arising under employee benefits plans. “[HMO’s] provide health care services through employer-sponsored group insurance plans and had previously been covered by ERISA preemption.”228 However, as stated by the Supreme Court, the basic thrust of the pre-emption clause in ERISA was “to avoid multiplicity of regulation to permit the nationally uniform administration of employee benefit plans,”229 and “in
the field of health care . . . there is no ERISA preemption without
to differentiate cases arising as a result of physician malpractice HMO and employer-sponsored group health plans from those that
arise as a result by ERISA. 231
Id. at 153; see also Chase v. Indep. Practice Ass’n., Inc., 583 N.E.2d 251 (Ill. 1991).
719 N.E.2d at 775. Apparent authority, or ostensible authority, is the basis for vicarious
liability; this is doctrine under which a contractor may be held vicariously liable for an individual acting as an agent or employee where the liability is based on the authority that the contractor or employer gives to that agent or employee. Id. at 765. Implied authority, however, can be described as actual authority established circumstantially; it arises where “the facts and circumstances show that the defendant exerted sufficient control over the alleged agent so as to negate that person’s status as an independent contractor, at least with respect to third parties.” Id. at 770.
Id. at 772.
Epstein & Sykes, supra note 213, at 629.
N.Y. State Conference of Blue Cross & Blue Shield v. Travelers Ins. Co., 514 U.S. 645,
Pegram v. Herdrich, 530 U.S. 211, 237 (2000) (referring to Blue Cross & Blue Shield, 514
S. at 654-55).
Compare Dukes v. U.S. Healthcare, Inc., 57 F.3d 350, 361 (3d Cir. 1995) (ERISA did not
preempt vicarious liability claims), with Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 52, 53-54 (1987) (ERISA preempts any state law causes of action for denial of benefits and does not permit punitive damages).