Putting Some Teeth into the Corporate Negligence Doctrine: Pennsylvania Considers Whether Dental Services Organizations can be Found Liable Under the Corporate Negligence Doctrine

Author: Marc L. Penchansky

In Thompson v. Nason Hospital, 527 Pa. 330, 591 A.2d 703 (1991), the Supreme Court of Pennsylvania held that hospitals could be found liable under the then emerging theory of corporate negligence. The corporate negligence doctrine recognizes four non-delegable duties that a hospital owes directly to the patient. The four duties include the following:

• a duty to use reasonable care in the maintenance of safe and adequate facilities and equipment;
• a duty to select and retain only competent physicians;
• a duty to oversee all persons who practice medicine within its walls as to patient care; and
• a duty to formulate, adopt and enforce adequate rules and policies to ensure quality care for the patients.

Id. at 707. The basis for adopting these new standards was the “corporate hospital’s role in the total health care of its patients.” Id. at 708.

The dissent in Thompson felt that the majority was instituting a “deep pocket theory of liability, placing financial burdens upon hospitals for the actions of their own employees.” Id. at 709. The dissent also predicted that corporate negligence liability would not be constrained to hospitals alone. So far that prediction has held true.

When a court is asked to permit liability for corporate negligence against a new type of entity, the court conducts an analysis of whether the entity provides comprehensive care to its patients. A series of precedents has eroded the meaning of comprehensive care and has permitted corporate negligence to apply to entities that provide something less than total care. For example, the Superior Court extended corporate negligence to Health Maintenance Organizations (HMO) despite the fact that HMO’s do not practice medicine. See Shannon v. McNulty, 718 A.2d 828 (Pa.Super, 1998). In Scampone v. Grane Healthcare, Co., 11 A.3d 967 (Pa. Super., 2010), allocatur granted, 15 A.3d 427 (Pa., 2011), the Superior Court applied corporate negligence to nursing facilities and their management companies despite the fact that those entities did not have staff physicians. See id. at 976.

One response

  1. Pingback: Payment but not Remittance is Required to Secure MCARE Fund Coverage « Clear and Convincing Evidence

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