Law and Emergency Medicine is a new feature that will be appearing regularly in Common Sense. Articles will focus on legal, regulatory, and political issues that affect emergency physicians. We need and welcome your feedback, and if you have expertise you would like to share with other members of the Academy, we also welcome article submissions. Please contact the editor at cseditor@aaem.org . Most of the abusive, and frankly exploitative, practices in emergency medicine directly emanate from provisions in emergency physician contracts. One of the newer, more ominous, and increasingly common contractual clauses attempts to saddle emergency physicians with uninsurable risks. These clauses have the innocuous title of "hold harmless" or "indemnification" clauses. Often, the language appears deceptively evenhanded, stating that all parties to the contract will hold each other harmless or indemnify each other. To "indemnify" or to "hold harmless" means to insure another party's risk. The danger lies in the fact that in the ordinary course of clinical activities, these clauses often result in one-way indemnification whereby emergency physicians protect their employers, their contract groups, or their hospitals. Generally, under these agreements, an allegedly negligent party indemnifies other parties at risk due to "vicarious liability." Employers have vicarious liability for acts their employees commit in the ordinary course of employment. This applies to groups or hospitals employing physicians. Likewise, contract holders and hospitals may have vicarious liability for independent contractor physicians if the patient reasonably concluded that the physician acted as an apparent agent of the hospital. If a patient files a medical malpractice case against you, alleges vicarious liability against your hospital, and you signed a contract agreeing to indemnify the hospital—you will pay for the hospital's attorney fees, court costs, and any jury verdict rendered against the hospital! You may also have to pay for any settlement agreements whereby the hospital makes a payment to the plaintiff. However, virtually no medical malpractice policies provide coverage for indemnification agreements. Thus, the physician will have uninsured risks resulting in personal liability. Not only do these clauses force you to assume uninsurable risk, in reality, the obligations are not mutual. When will a plaintiff allege primary negligence on the part of a hospital and then claim that you have vicarious liability? This never happens, because you will not have responsibility for the acts of a hospital or an employer. Several years ago when I served as in-house counsel for a large physician-owned emergency medicine group, a hospital administrator insisted that our group sign an indemnification clause as a condition for maintaining the contract to manage the emergency department. We looked all over the United States and Europe and could not find a malpractice policy that covered indemnification. Finally, we told the hospital administrator we would agree to indemnify the hospital if he could find us a policy that covered indemnification. He finally relented when he realized that no such policy existed. The presence of an indemnification clause in a physician contract should provide notice to the physician that something is wrong with the position being offered. Perhaps an overzealous attorney inserted the clause into the contract. On the other hand, a hospital or group may have inserted the indemnification clause in an effort to take advantage of unwary physicians. AAEM considers this an ominous practice worthy of condemnation. Therefore, at its February 2012 meeting, the AAEM board of directors approved a position statement declaring that emergency physician contracts should not include indemnification clauses. (Position Statement can be read at www.aaem.org/em-resources/position-statements.) In summary, indemnification clauses create uninsurable risks for physicians. They often represent a deceptive attempt to unfairly shift risk to unwary physicians. Physicians who discover such a clause in their contracts should either look for another job or retain the services of a contract attorney if they otherwise find the offered position desirable.
American Academy of Emergency Medicine. 2012;19(4):7 © 2012 American Academy of Emergency Medicine