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Hi, everybody, welcome to module seven.

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This week, we talk about liability

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and we think about the evolution
from charitable immunity

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in the early days of almshouses,

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standalone hospitals to
the multi-institutional,

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really complex systems we have today.

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Whereas tort liability was
once unheard of in healthcare

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in the last 50 years has become

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really one of the most
dramatic areas of the law.

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There'll be slides next week to review.

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I encourage you to check
out those review slides.

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Make sure you caught
everything in this module.

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Let's review a couple of topics
we've discussed previously

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and kind of integrate
them into this topic.

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First, managed care organizations.

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Generally, a type of
healthcare organization

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that manages and coordinates
healthcare services

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for its members in order to
control healthcare costs,

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improve the quality of care,
keep the patient healthy.

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Managed care organizations,

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I'm using in a really general sense.

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They're typically health
insurance companies,

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healthcare provider organizations

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or those that contract
with healthcare providers,

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hospitals, doctors,

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to provide healthcare
systems to their members.

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Think networks.

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MCOs use a variety of strategies

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to try to manage healthcare costs,

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utilization management,

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provider networks to seize management,

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preventative care.

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They're often used by employers,

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government programs, Medicare, Medicaid,

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and they provide healthcare benefits

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to their employees and beneficiaries.

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While MCOs have been successful

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in controlling healthcare costs,

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they've also faced some criticism

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for limiting patient choice

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and compromising quality of care.

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So if you're not familiar with MCOs,

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you probably are, but if you're not,

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just think about these big systems of care

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that we have right now.

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So we discussed liability
in the past couple weeks,

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and liability refers to
the legal responsibility

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that persons, entities or organizations

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face the actions of the
employees or agents,

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whether intentional,

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reckless or unintentional.

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This means that if an employee

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or an agent of an organization

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engages in conduct that harms others,

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the organization may be held
responsible for those damages,

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even if the organization

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didn't really participate in the conduct.

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It's based on the idea that the entity

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controls its employees or agents.

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Corporate liability, you'll
see in the reading this week,

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refers to that legal responsibility

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that a corporation may face

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for actions of employees or agents,

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whether intentional or unintentional,

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can arise from a variety of legal claims

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such as environmental law, employment law,

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securities law, product liability.

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Under corporate liability,

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the corporation itself may be held liable

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for damages caused by actions
of employees or agents,

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regardless whether those were made

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in the scope of their
employment or agency.

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So this is kind of new.

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We consider separately
respondeat superior.

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So respondeat superior is this idea

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that the principal or employer

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is held liable for the
employees or agents,

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even if the principal or employer

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did not participate directly

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into the actions that caused the harm.

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The key factor in determining liability

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is whether the employee was acting

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within the scope of their
employment or agency

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when the actions were taken.

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And respondeat superior
is an important concept

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'cause it helps ensure
employees and principals

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are held accountable for the actions

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of their employees or agents.

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Provides a way for victims
to seek compensation

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for harm caused by those actions

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and serve as a deterrent, right?

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For others.

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They might be more likely to take steps

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to prevent wrongful actions

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if they know they can be held liable.

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We talked about independent
contractors a little bit,

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but you'll see that in
this week's materials,

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the distinction between employees

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and independent contractors is important

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when we're thinking about liability.

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Generally, an employer is responsible

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for the actions of the employees

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under the idea or the doctrine
of respondeat superior

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because it's in the scope
of their employment.

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Employers generally do not
have the same level of control

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over what are called
independent contractors.

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And so, they're typically not held liable

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for the actions of those
independent contractors.

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So you need to consider what that means

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and how that impacts

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healthcare situations and relationships.

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Very complicated when you think

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about these big systems, right?

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So you'll see that in
the materials this week.

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We talked about ERISA.

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ERISA will come back this week

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and we'll go a little bit deeper.

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Employee Retirement Income
Security Act from 1974

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protected employees' rights and benefits

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related to their retirement
plans and benefit plans,

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including insurance,
disability, life insurance.

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ERISA really set minimum standards

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for employees' benefit plans

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so that they had certain
features and benefits

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across the nation.

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ERISA also established procedures

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for participants to file claims,

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do an appeal process
to denial of benefits.

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ERISA applies to most
private sector employers

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that offer employee benefit plans,

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as well as those plans sponsored by union

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and some government entities.

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It does not apply to
government-sponsored plans

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like social security or
religious-based plans like a church,

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if you work for a system
that's part of the church.

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ERISA is important as
you probably remember

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because it provides protections

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for employees' retirement
and benefit plans.

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It does many things,

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retirement savings by
setting minimum standards

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for how retirement plans work like 401(k)

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to ensure that employees'
retirement savings

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are managed and invested properly.

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It requires plan fiduciaries

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to act in the best interest
of plan participates

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and manage those plan assets prudently.

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It helps participants
makes informed decisions

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about their benefits,

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ensures they understand how plans work.

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Creates a uniform framework
for employee benefit plans,

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means the employers can
offer consistent benefits

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to their employees regardless
of where they work.

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It makes it easier for employers

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to administer these benefit plans,

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understand the benefits

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and provides participants
with legal remedies

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if they believe their rights
on the plan have been violated.

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So this includes the
right to sue for benefits,

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appeal of denial of benefits.

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ERISA has faced some pretty
tough criticism over the years.

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Some argue the law has really not kept up

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with the changes since 1974.

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This includes the rights
for suing for appeals

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and denial of benefits,

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and that the law has really not kept up

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with changes in the
economy and the workforce.

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It doesn't provide sufficient protections

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for those in the gig economy,

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those who work for small businesses.

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Some critics argue that
ERISA's legal remedies

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are really insufficient at this point

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and that participants
face really challenges

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in obtaining benefits on the law

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and they can't really get
through that legal process.

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So this week, we overlay
this historic idea

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of healthcare being part
of this charitable system

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and really under this charitable immunity,

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it was this doctrine that
this was provided by churches

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and nonprofit organizations,

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and therefore they're protected

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from liability from their actions

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because they were doing
this charitable good

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for the community.

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Concept was really strong 100 years ago

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as a way to encourage

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nonprofits, churches,

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to do this work,

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provide these social services
without fear of being sued,

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without repercussions
for things going wrong.

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They couldn't be held liable

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for anything that happened really,

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negligence or other wrongful acts,

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unless there was this
real gross negligence

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or willful misconduct,

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that standard of intentional.

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So

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in the last 100 years,

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as this really changed and modified

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and systems became more complicated,

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this charitable immunity
doctrine slowly went away.

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Application was really limited.

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There was a lot of criticism

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that it protected nonprofit
and religious organizations

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at the expense of victims

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who were sometimes
obviously very badly hurt

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either through reckless
or negligent conduct.

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And they weren't holding
these organizations

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accountable for their actions.

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So slowly, most states replaced

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these charitable immunity laws

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or limited them over the last 100 years.

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So we think about that,

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we think about these statutes

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and the degree of protection they added.

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But you have to think about that

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in the context of these really
complicated institutions

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being built that we're no longer

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just a small hospital, a small town.

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Now we have healthcare systems

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that might include both
providers and insurance.

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They might cover, not just municipalities,

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but counties or whole states
or across the country,

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and what does that mean?

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So now that we have the basics,

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I think we can think about
that a little bit deeper.

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You also have a writing
assignment due this week.

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Don't forget, if you need an
extension, please reach out.

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Otherwise, I'll see you
in the discussion forum

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to think about liability

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in terms of huge systems

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and how that works.