Beware The Vanishing Doctor: Protecting Coverage When Physicians are Dismissed in Georgia.

Written by: Paul Ivey, Esq. and Tyler Pritchard, Esq.

Hospitals around the country employ dozens of physicians and nurses. Often, as a part of their employment, hospitals agree to pay the premiums on these health care professionals’ liability insurance policies. This much is no secret. But how does the hospital address coverage when, for a multitude of possible reasons, a claimant/patient voluntarily dismisses a negligent health care professional? Does the hospital lose the benefit of its having paid the health care professional’s premiums because the individual was dismissed?

In some instances, claimants may make the strategic decision to voluntarily dismiss the negligent professional from the action. This could be a result of the racial, socioeconomic or political demographics of a particular venue or simply the result of the negligent health care professional being a very likeable witness. In that instance, it is important to know how to proceed to protect the interests of the hospital or employer.

In Georgia, for instance, law permits the naming of a vicariously liable employer without naming the employee, an employer hospital must be aware of the options it has to protect itself and receive the full benefit of its premium payments. First, a hospital may certainly proceed through the litigation with the knowledge that it has access to a common law indemnity claim against the physician at the conclusion of the matter. However, for situations that call for a more active approach, a hospital has a few courses of action at its disposal.

In Georgia, a dismissal of fewer than all parties requires an order of the court. Upon such a motion, the hospital has the opportunity to object to a voluntary dismissal of a negligent health care professional, allowing the hospital to outline the coverage issues which would arise. Next, the hospital may implead the health care professional under O.C.G.A. § 9-11-14, which allows a defendant to serve summons and complaint against a person not a party to the action who may be liable for all or part of the plaintiff’s claims against the employer. Similar to the benefit provided by O.C.G.A. § 9-11-14, a defendant hospital may “vouch” a third party into court by merely giving him notice of the suit. In a vouchment action, a defendant’s liability to the plaintiff and the amount of that liability are binding on the vouchee. However, the vouchee’s liability to the defendant cannot be determined in that action; instead, a separate action must be filed by the defendant against the vouchee to determine that liability.

Finally, and perhaps most importantly, hospitals should look carefully at the professional liability policies they provide for health care professionals that are employees. In some instances, a rider may provide coverage whether the employee is named in the suit or not. In any event, an understanding of your state’s procedural law, as well as the terms of the policy, is essential for protecting an employer’s interest where the plaintiff makes a strategic decision to either dismiss or intentionally omit the negligent employee from the case.