The physician–patient relationship is a fiduciary relationship.
Managed care creates profound conflicts of interest between medical
care practitioners and patients.
The law of the physician–patient relationship does not change in
Most states require nonphysician practitioners to be supervised by
Physician medical directors face special legal risks.
Managed care poses new business risks to medical care practitioners.
The most legally significant change in medical practice over the last twenty
years has been the corporatization of medical care services. This has
accelerated in the last ten years with the growing dominance of managed care
organizations (MCOs). In this book, an MCO is any organization with a financial
interest in medical care delivered to a group of patients and that contracts with
medical care practitioners for the delivery of medical care and exercises some
control over that medical care. These range from closed-panel health
maintenance organizations (HMOs) with all employee physicians, to loosely
structured preferred provider organizations (PPOs), and include hospital-
owned physician’s practices and other arrangements with noninsurers who
nonetheless have a financial interest in the medical care that the medical care
The legal consequences of the corporatization of medicine has been to broaden
the legal threats facing medical care practitioners from traditional medical
malpractice litigation to include fraud, financial crimes, and other civil and
criminal business litigation. The losses from such litigation are potentially much
greater than from individual medical malpractice cases. Civil fines can run to
the tens and hundreds of millions of dollars, and the individuals may be
criminally prosecuted and face prison sentences.
This section deals with the special risks that arise from medical care
practitioners working with MCOs and in team care environments. Most of these
risks arise from the conflicts between the medical care practitioner’s fiduciary
duty to the patient and the MCO’s pressure to make the medical care
practitioner a gatekeeper who protects the interests of the MCO. Most of these
risks run to physician medical care providers because the vast majority of the
statutes and case law dealing with fiduciary duty in medical care are directed