Independent Medical Judgment and Vicarious Liability: Renaissance Medical Foundation v. Lugo and the Scope of NPHO Responsibility

Independent Medical Judgment and Vicarious Liability:
Renaissance Medical Foundation v. Lugo and the Scope of Nonprofit Health Organization Responsibility

I. Introduction

The Supreme Court of Texas’s decision in Renaissance Medical Foundation v. Lugo, No. 23‑0607 (Tex. May 23, 2025), marks a significant development in Texas health-care and tort law. The Court confronts a difficult intersection: traditional common-law respondeat superior (vicarious liability of employers for employees) and a modern statutory structure that both authorizes certain corporate entities to employ physicians and simultaneously forbids them from interfering with physicians’ professional judgment.

The defendant, Renaissance Medical Foundation (“the Practice”), is a nonprofit health organization (NPHO) certified under Texas Occupations Code § 162.001. It employed neurosurgeon Dr. Michael Burke, who performed a complex brain surgery on a child, I.B., at Doctors Hospital at Renaissance. The surgery allegedly resulted in catastrophic neurologic injury when a retractor was said to have migrated into the brainstem. The child’s mother, Rebecca Lugo, sued Dr. Burke, the hospital, and the Practice. Against the Practice, she pursued vicarious liability—arguing that as Dr. Burke’s employer, the Practice is responsible for his alleged malpractice.

The key legal question was not whether Dr. Burke practiced medicine negligently, but whether a statutorily constrained medical employer like an NPHO can be held vicariously liable for a physician’s negligence when the employer is prohibited from “interfering with, controlling, or directing” the physician’s professional judgment. In other words: does the statutory requirement that physicians retain “independent medical judgment” carve back the traditional right-of-control test that underpins respondeat superior?

The Court’s answer: yes, but only in part. The Court holds that:

  • Texas law still allows vicarious liability for NPHOs employing physicians.
  • However, an NPHO cannot be held vicariously liable where exercising the employer’s right of control over the allegedly negligent conduct would interfere with the physician’s independent medical judgment.

This creates a nuanced, statute-specific variant of the common-law vicarious-liability framework, tailored to NPHOs. The Court affirms the denial of summary judgment and remands because Renaissance did not conclusively prove that controlling the specific alleged acts of negligence would necessarily intrude upon Dr. Burke’s protected medical judgment.

II. Factual and Procedural Background

A. The Employer: Renaissance as a Nonprofit Health Organization

Renaissance Medical Foundation is a nonprofit health organization (NPHO) under Texas Occupations Code § 162.001. This statutory vehicle allows certain physician-controlled nonprofit entities to employ physicians without violating the longstanding Texas prohibition on the “corporate practice of medicine.” Key features:

  • It must be a nonprofit corporation.
  • It must be organized and managed by individuals licensed by the Texas Medical Board.
  • It must be certified by the Board.
  • It is organized for a qualifying purpose—here, the delivery of health care.

Although the record did not establish certification by evidence, both parties stated that Renaissance is so certified. The Court accepts that representation under Texas Rule of Appellate Procedure 38.1(g).

B. The Employment Agreement with Dr. Burke

Renaissance employed neurosurgeon Dr. Michael Burke under an employment agreement that:

  • Expressly characterizes Dr. Burke as an employee.
  • Requires him to provide “professional medical services” exclusively to the Practice’s patients.
  • Restricts his practice locations to specified sites, including Doctors Hospital at Renaissance.
  • Requires him to provide services “as directed” by the Practice.
  • Requires compliance “with [the Practice’s] protocols, policies and procedures.”
  • Obligates him to work at least forty hours per week and pays him a regular salary.
  • Gives the Practice discretion to alter his practice locations.
  • States that Dr. Burke “shall retain the right to exercise [his] independent medical judgment in providing Medical Services to patients.”

This agreement plainly allocates substantial employer-type control, while carving out a contractual recognition of Dr. Burke’s independent medical judgment.

C. The Underlying Medical Incident

Lugo brought her minor daughter, I.B., to Doctors Hospital at Renaissance for brain surgery performed by Dr. Burke. The surgery resulted in permanent neurological damage. In subsequent conversations, Dr. Burke allegedly expressed his belief that a retractor used in the procedure migrated into the child’s brainstem, causing the injury.

Lugo alleges the retractor’s migration occurred because it was contacted by:

  • Dr. Burke himself; or
  • the surgical technician (an employee of the hospital); or
  • a suction device or its tubing while being handed to Dr. Burke.

Her petition asserts that Dr. Burke was negligent in:

  • Failing to properly perform the surgery.
  • Failing to properly place the retractor.
  • Failing to secure the retractor.
  • Failing to monitor the location of the retractor during surgery.
  • Allowing the retractor to migrate.

She sued:

  • Dr. Burke, for medical negligence;
  • The Practice (Renaissance), for vicarious liability based on Dr. Burke’s negligence;
  • The Hospital, for vicarious liability based on the surgical technician’s negligence.

Although the patient is no longer a minor, the petition alleges that she remains mentally incompetent, so Lugo continues as next friend.

D. The Practice’s Motion for Summary Judgment and Interlocutory Appeal

Renaissance filed a traditional motion for summary judgment (Texas Rule of Civil Procedure 166a(c)), asserting that it could not be held vicariously liable as a matter of law because:

  1. It is prohibited from practicing medicine and therefore cannot legally control how medical care is provided.
  2. It did not, in fact, control the manner in which Dr. Burke provided medical care.
  3. Dr. Burke was effectively an independent contractor with respect to medical care.

The trial court denied the motion in a reasoned order, holding:

  • The employment agreement granted Renaissance enough control over Dr. Burke to create vicarious liability.
  • Dr. Burke nevertheless retained the right to exercise independent medical judgment when providing patient care.

Recognizing the significance of the legal issue and its potential to avoid a full trial if resolved in Renaissance’s favor, the trial court allowed a permissive interlocutory appeal—an early appeal of a non-final order on a controlling legal question.

On appeal, Renaissance reframed its argument around statutes governing NPHOs and the practice of medicine, contending that:

  • Only individuals can be licensed to practice medicine.
  • The statute requires that employed physicians “retain independent medical judgment.”
  • NPHOs are barred from interfering with or controlling physicians’ professional judgment.

The court of appeals rejected Renaissance’s arguments, found Dr. Burke to be an employee under traditional factors, and affirmed the denial of summary judgment. 672 S.W.3d 901 (Tex. App.—Corpus Christi–Edinburg 2023). The Supreme Court of Texas granted review.

III. Summary of the Supreme Court’s Opinion

A. The Core Holding

The Supreme Court frames the question narrowly: Has the Texas Occupations Code modified the extent to which an NPHO may be held vicariously liable for the torts of its physician employees?

The Court answers:

“[A] nonprofit health organization may not be held vicariously liable if exercising its right of control regarding the alleged negligence would interfere with its employee physician's exercise of independent medical judgment.”

Thus:

  • Vicarious liability remains possible for NPHOs.
  • However, liability is narrowed: it is unavailable where lawful control cannot be exercised without interfering with protected medical judgment.

B. Statutory Provisions at the Center of the Case

The Court focuses on three clusters of statutory provisions:

  1. Licensing limitation – Only individuals can be licensed to practice medicine. (Tex. Occ. Code § 155.001; § 151.002(a)(13) & (a)(11)).
  2. Independent medical judgment – Employed physicians retain independent medical judgment and cannot be disciplined for reasonably advocating for patient care. (§ 162.0023).
  3. Control prohibition – An NPHO “may not interfere with, control, or otherwise direct a physician's professional judgment in violation of this subchapter or any other provision of law, including board rules.” (§ 162.0021).

The first two, the Court notes, had already been considered in earlier precedent and do not bar vicarious liability. The third provision—§ 162.0021—is new ground, and the Court concludes it does modify the scope of NPHO vicarious liability.

C. The Modified Vicarious-Liability Framework for NPHOs

The Court preserves the traditional “right of control” test, but adapts it for NPHOs:

  • The usual test asks whether the alleged tortfeasor is an employee—i.e., whether the employer has the right to control the details, methods, and progress of the work.
  • For NPHOs, this test must be applied in light of statutory limits on what sort of control is permitted.
  • Accordingly, an NPHO can be vicariously liable only when:
    • It had a right of control over the allegedly negligent act or omission (by contract or actual practice), and
    • Exercising that control would not interfere with the physician’s independent medical judgment.

The Court suggests that in litigating such cases, parties and courts should focus on:

  1. Whether the NPHO possessed a right of control over the specific acts or omissions alleged to be negligent.
  2. Whether exercising that right of control—had the NPHO done so—would have intruded on the physician’s protected independent or professional judgment.

D. Result in This Case

Because Renaissance moved for traditional summary judgment on a purely legal theory—arguing that it could never be vicariously liable for medical negligence due to statutory constraints—it bore the burden of proving that conclusion as a matter of law. It did not attempt to prove, nor did the record show, that:

  • Renaissance lacked any right of control over the tasks alleged to be negligent; or
  • Any exercise of such control would necessarily have interfered with Dr. Burke’s independent medical judgment.

Without this showing, Renaissance failed to conclusively negate an indispensable element of vicarious liability under the new statutory standard. The Court therefore:

  • Affirms the court of appeals’ judgment (denial of summary judgment), and
  • Remands to the trial court for further proceedings, leaving Renaissance free to file a new motion for summary judgment under the clarified standard.

IV. Doctrinal Context and Precedents

A. The Corporate Practice of Medicine and NPHOs

Historically, Texas has adhered to the corporate practice of medicine doctrine. The Texas Medical Practice Act prohibits the practice of medicine without a license, and only a “person”—generally an individual—can be licensed. (Tex. Occ. Code § 155.001–.002; § 151.002(a)(13), (11)). The doctrine aims to:

  • Prevent lay control over the clinical aspects of medical practice.
  • Maintain the independence of physicians’ professional judgment.
  • Avoid financial or corporate pressures distorting patient care.

Accordingly, corporations historically could not employ physicians to provide care and collect fees for that care. Cases such as Gupta v. East Idaho Tumor Institute, Inc., 140 S.W.3d 747 (Tex. App.—Houston [14th Dist.] 2004, pet. denied), and St. Joseph Hospital v. Wolff, 94 S.W.3d 513 (Tex. 2002) (plurality op.), describe this prohibition as designed to curb unlicensed practice and “possible abuses resulting from lay control” of medical care.

Yet most modern healthcare delivery systems rely on institutional employers: hospitals, health systems, physician groups, and now NPHOs. Recognizing this reality, the Legislature in 1999 created exceptions, including the nonprofit health organization structure (Tex. Occ. Code § 162.001).

NPHOs are unique hybrids:

  • They may employ physicians without being licensed to practice medicine themselves.
  • Their directors and trustees must be physicians licensed in Texas and actively practicing.
  • They must be organized for specific purposes such as delivering health care.

Crucially, while an NPHO can employ physicians, several statutory provisions limit how it may do so.

B. Statutory Protections for Independent Medical Judgment

Three provisions of Chapter 162 are particularly important:

  1. § 162.0021 – Non‑Interference with Professional Judgment
    An NPHO “may not interfere with, control, or otherwise direct a physician’s professional judgment in violation of this subchapter or any other provision of law, including board rules.”
  2. § 162.0022 – Required Policies and Independent Judgment
    An NPHO must “adopt, maintain, and enforce policies to ensure that a physician employed by the health organization exercises independent medical judgment when providing care to patients” and must include policies on matters such as quality assurance. As long as the policies “reserve[] the sole authority to engage in the practice of medicine to a physician,” the statute is not violated.
  3. § 162.0023 – Physician’s Retained Independent Medical Judgment
    The statute confirms that an employed physician “retains independent medical judgment in providing care to patients” and shields physicians from discipline by the NPHO for “reasonably advocating for patient care.”

The statute also specifies that its requirements may not be “voided or waived by contract.” (§ 162.0024(a)). This language ensures that employment contracts cannot override statutory protections of independent judgment.

C. Traditional Common-Law Vicarious Liability and the Right-of-Control Test

Under Texas common law, an employer is vicariously liable for torts committed by its employee in the course and scope of employment, but not generally for torts committed by an independent contractor. The determinative inquiry is whether the employer has the right to control the details and methods of the employee’s work.

The Court relies heavily on the formulation in Limestone Products Distrib., Inc. v. McNamara, 71 S.W.3d 308, 312 (Tex. 2002):

“The test to determine whether a worker is an employee rather than an independent contractor is whether the employer has the right to control the progress, details, and methods of operations of the work.”

Five non-exhaustive factors guide the analysis:

  1. The independent nature of the worker’s business.
  2. Who furnishes tools, supplies, and materials.
  3. Who controls the progress of the work (beyond final results).
  4. The duration of employment.
  5. The method of payment (time-based vs. per job).

Control can be shown either by:

  • Explicit contractual assignment, or
  • Actual exercise of control in practice. See Shell Oil Co. v. Khan, 138 S.W.3d 288, 292 (Tex. 2004).

The Supreme Court consistently reaffirms that right of control is the “supreme test” for establishing a master-servant relationship and, therefore, vicarious liability. See, e.g., St. Joseph Hospital, 94 S.W.3d at 542; Waste Management of Texas, Inc. v. Stevenson, 622 S.W.3d 273, 287 n.1 (Tex. 2021) (Boyd, J., concurring).

D. Physicians as Employees Despite Independent Medical Judgment

Renaissance argued that because only individuals may practice medicine and because physicians must retain independent professional judgment, an entity such as an NPHO cannot have the requisite “right of control” over medical work to support vicarious liability. The Court rejects this position as inconsistent with prior cases.

1. St. Joseph Hospital v. Wolff

In St. Joseph Hospital, a plurality of the Court held that the statutory prohibition against a corporation practicing medicine does not make it impossible for a hospital to be the employer of a physician for purposes of vicarious liability. The Court adopted Restatement (Second) of Agency § 220, comment i:

“A statute prohibiting an incorporated hospital from employing a physician does not prevent the parties from factually accomplishing that very act in violation of the law any more than a statute prohibiting a crime makes the crime factually impossible to commit.”

The key takeaway: Even if the arrangement is technically irregular under the Medical Practice Act, if a corporation in fact has the right to control a physician’s work, the physician can be its employee for tort purposes.

2. Murk v. Scheele

In Murk v. Scheele, 120 S.W.3d 865 (Tex. 2003), a physician argued that the hospital could not be vicariously liable because, in exercising his “independent professional judgment,” he was outside the hospital’s control. The Court rejected this, holding that:

  • The need for medical professionals to exercise some independent judgment does not negate the employer’s right to control other aspects of their work.
  • A physician can be an “employee” of a governmental unit for Texas Tort Claims Act purposes notwithstanding his duty to exercise professional judgment.

Murk is not merely a Tort Claims Act case; subsequent decisions confirm that the statutory definition of “employee” in the Tort Claims Act tracks common-law concepts of employment. See, e.g., Tex. Dep’t of Transportation v. Self, 690 S.W.3d 12, 20 (Tex. 2024); Marino v. Lenoir, 526 S.W.3d 403, 409–10 (Tex. 2017).

The Court in Renaissance underscores that if a physician could not be an employee for purposes of vicarious liability, the logic of Murk would collapse: there, the Court barred claims against the individual physician because the governmental entity employer was potentially vicariously liable.

3. Restatement (Third) of Torts: Medical Malpractice

The opinion also cites the then-recently approved Restatement (Third) of Torts: Medical Malpractice § 15, which provides:

  • A medical institution is vicariously liable for the tortious conduct of its employee acting within the scope of employment.
  • An “employee” is one whose “manner and means of work” the institution controls or has the right to control.
  • Comment d clarifies that professional autonomy does not negate vicarious liability; respondeat superior applies “regardless of the degree of professional autonomy a medical employee retains, by virtue of the other elements of control that an employment relationship entails.”

These authorities collectively undercut the premise that licensing and independent judgment alone immunize employers from vicarious liability in the medical context.

E. Statutory Modifications of the Right-of-Control Inquiry in Other Contexts

The Court analogizes to cases where statutes or industry-specific structures have modified the right-of-control analysis, altering who is treated as an “employer” for particular legal contexts.

1. Texas Workers’ Comp. Ins. Fund v. DEL Industries, Inc.

In DEL Industries, 35 S.W.3d 591 (Tex. 2000), the Staff Leasing Services Act governed leased workers. The statute:

  • Declared that the staff leasing company retained the right to direct and control leased employees.
  • Gave it the exclusive right to elect or deny workers’ compensation coverage for those employees.

The Court held that the Act “statutorily supersede[d] the common law right-of-control test” in determining who the “employer” is for workers’ compensation coverage. Thus, the statute reallocated employer status irrespective of common-law control factors.

2. Exxon Corp. v. Tidwell and Industry Structure

In Exxon Corp. v. Tidwell, 867 S.W.2d 19 (Tex. 1993), an oil company’s relationship with its service station lessee involved a hybrid of franchising, agency, and landlord-tenant law. The Court held that in a cause alleging negligent failure to provide a safe workplace, the proper inquiry was who had specific control over safety and security conditions that gave rise to the injury, not the broader, generalized operational control.

This “hybrid body of law” approach recognizes that some industries and regulatory schemes distort the usual employer-employee control picture, requiring a more context-specific assessment.

F. Painter and the “Task-by-Task” Problem

In Painter v. Amerimex Drilling I, Ltd., 561 S.W.3d 125 (Tex. 2018), the Court warned against an unworkable vicarious-liability regime that would require courts to engage in “task-by-task” classification, with a worker toggling between employee and independent contractor status multiple times per day depending on individual tasks. For traditional employers who could exert control but chose not to, this micro-granular approach was rejected.

The Renaissance Court acknowledges Painter, yet explains that the Legislature, through § 162.0021 and related provisions, has altered the underlying employer–employee relationship for NPHOs. Given that the Legislature has carved out a domain of non‑controllable professional judgment, courts must inevitably consider the nature of the specific acts or omissions alleged to be negligent when determining whether lawful control was possible.

V. The Court’s Legal Reasoning

A. Licensing and Independent Judgment Do Not Eliminate Vicarious Liability

First, the Court rejects the argument that because only individuals can be licensed to practice medicine, corporations can never have the level of control necessary to be vicariously liable for malpractice. As in St. Joseph Hospital, the mere fact that a corporation cannot hold a medical license does not make it factually or legally impossible for it to employ a physician and direct non-clinical aspects of the physician’s work.

The statutory definition of “practice of medicine” (Tex. Occ. Code § 151.002(a)(13)) and associated penalty provisions use the term “person” to mean an individual, emphasizing that only individuals can be penalized for unlicensed practice. But this does not preclude an entity from exerting managerial or operational control over licensed physicians in ways that stop short of directly diagnosing or treating patients.

Nor does the requirement that physicians retain “independent medical judgment” in § 162.0023 negate an employment relationship. Echoing Murk, the Court notes that many professional roles require some independent judgment, yet remain squarely within the employer–employee framework.

B. The Statutory Prohibition on Interference: Narrowing the Scope of Control

The analytical pivot is § 162.0021’s prohibition that an NPHO “may not interfere with, control, or otherwise direct a physician’s professional judgment in violation of this subchapter or any other provision of law, including board rules.”

This language does not explicitly speak in terms of liability. Instead, it regulates conduct: it tells NPHOs what they may and may not do. The Court reads this conduct-regulating statute against the backdrop of the right-of-control test for vicarious liability.

The key logical steps:

  1. Right of control remains the test for determining an employment relationship and vicarious liability for torts committed in the scope of employment.
  2. The Legislature has, however, removed from NPHOs the authority to control certain domains of a physician’s work—namely, domains that constitute “professional judgment” protected by statute and rule.
  3. Imposing vicarious liability for conduct that the employer is legally forbidden to control would be inconsistent with the fundamental principle tying vicarious liability to the right of control.

In short: where the statute says “you may not control,” the common law cannot simultaneously presume that you have a right to control sufficient to create vicarious liability.

C. Contextual Reading: The Role of Required Policies

The Court closely reads § 162.0021 in context with § 162.0022 and § 162.0023:

  • § 162.0022 requires NPHOs to adopt and enforce policies ensuring that physicians “exercise independent medical judgment” and to implement quality assurance programs.
  • § 162.0022(d) specifies that such policies are lawful so long as they “reserve[] the sole authority to engage in the practice of medicine to a physician.”
  • § 162.0023 reaffirms that the physician retains independent judgment and may not be disciplined for reasonably advocating for patient care.

From this, the Court draws several conclusions:

  1. The statute does not forbid NPHOs from having policies that guide or structure care, so long as they do not usurp clinical decision-making.
  2. Policies that facilitate rather than interfere with independent judgment—such as evidence-based protocols, safety checklists, and quality-assurance procedures—are expected and lawful.
  3. Thus, an NPHO may exercise a form of administrative or structural control over care processes, provided it does not dictate the specific medical decisions that require independent professional judgment.

The Court is careful to distinguish between:

  • Direct liability for an NPHO’s own negligence (e.g., in failing to have adequate policies, staffing, or systems), and
  • Vicarious liability for a physician’s negligence based on an employment relationship.

Claims that the NPHO’s own policies (or lack thereof) fell below the standard of care are direct negligence claims. They rest on different operative facts than vicarious liability claims, which focus on the agent’s conduct and the nature of the principal–agent relationship. See Certified EMS, Inc. v. Potts, 392 S.W.3d 625, 629 (Tex. 2013).

D. The New Standard: Linking Vicarious Liability to Lawful Control

Having reconciled the common law with the statutory framework, the Court articulates the operative standard:

“When an NPHO is sued because of an employee physician’s alleged negligence, its vicarious liability will depend on whether the plaintiff can prove that an exercise of control over the alleged negligence would not interfere with the physician’s exercise of independent medical judgment.”

Thus, to establish vicarious liability against an NPHO, a plaintiff must effectively show:

  1. Right of control – The NPHO had a contractual or practical right to control the aspect of the physician’s work alleged to be negligent.
  2. Lawful capacity to exercise that control – Exercising that control would not have intruded upon the physician’s statutorily protected professional or independent judgment.

Conversely, an NPHO can defeat vicarious liability by conclusively showing that:

  • It did not have such a right of control over the acts or omissions at issue; or
  • Any control it could lawfully exercise would not have affected the alleged negligence, because the negligence lay within the physician’s independent judgment; or
  • Any attempt at controlling the relevant acts would itself constitute unlawful interference with independent medical judgment.

This is not a pure “task-by-task” regime in the Painter sense; instead, it is a statute-informed inquiry into the overlap or separation between:

  • The domain of protected professional judgment, and
  • The domain of employer-controllable activities (e.g., scheduling, staffing, equipment provisioning, compliance with certain policies that do not dictate clinical decisions).

E. Application to This Case: Why Summary Judgment Was Properly Denied

Because this was a traditional summary judgment motion, the Practice—as the movant—bore the burden of conclusively negating at least one element of Lugo’s vicarious-liability claim. It stipulated that its motion presented only a question of law and assumed no disputed material facts.

The Practice’s argument was categorical: it asserted that the NPHO statute entirely deprived it of any relevant right of control over Dr. Burke’s medical work, thereby rendering vicarious liability impossible as a matter of law. It did not argue, in the alternative, that:

  • It lacked actual or contractual control over particular tasks; or
  • Any attempt to control the alleged negligent acts (e.g., securing and monitoring the retractor) would have necessarily interfered with Dr. Burke’s independent medical judgment.

Under the standard the Court articulates, that was insufficient. To prevail as a matter of law, Renaissance would have needed to show (for example):

  • That tasks such as placement, securing, and monitoring of a retractor are exclusively matters of professional judgment beyond any permissible employer control; or
  • That its contractual and policy-based control over Dr. Burke did not extend to those aspects of the procedure; or
  • That any effort by the Practice to dictate how those tasks should be performed would necessarily violate § 162.0021.

The record, by the Court’s account, is “little to nothing” on the “administrative realities” of NPHO practice and how, concretely, the Practice might have controlled or structured Dr. Burke’s surgical conduct without dictating his clinical decisions. Given that omission—and the Practice’s purely legal framing—the Court holds that Renaissance did not meet its burden to obtain traditional summary judgment.

The Court leaves open that, on remand, Renaissance may file another summary judgment motion, possibly including:

  • Evidence-based arguments under a traditional motion; or
  • A no‑evidence motion under Rule 166a(i), asserting that Lugo lacks evidence of a right of lawful control over the specific acts alleged to be negligent.

VI. Clarifying Complex Concepts and Terminology

A. Vicarious Liability and Respondeat Superior

Vicarious liability means holding one party (here, an employer) legally responsible for the wrongful acts of another (an employee), even when the employer itself did nothing negligent. Respondeat superior (“let the master answer”) is the doctrine that an employer is liable for torts committed by an employee in the course and scope of employment, based on the employer’s right to control the work.

B. Employee vs. Independent Contractor

Texas courts distinguish employees from independent contractors primarily through the right-of-control test. An employer–employee relationship exists where the putative employer:

  • Can tell the worker how, not just what, to do the job.
  • Provides tools, equipment, and a fixed place or schedule of work.
  • Pays wages by the hour, week, or month rather than per project.
  • Retains the right to assign tasks and change work locations.

The status is not determined solely by how the contract labels the relationship; courts look to the substance of control.

C. Independent Medical (or Professional) Judgment

Independent medical judgment means that the physician alone decides:

  • What diagnoses to make.
  • What treatments to recommend or provide.
  • What clinical judgments to reach about risks, benefits, and alternatives.

While institutions may set policies, suggest protocols, or require quality measures, they cannot lawfully:

  • Dictate diagnoses.
  • Override treatment decisions in individual cases.
  • Discipline physicians for advocating reasonable patient care.

This concept is central to the corporate practice of medicine doctrine and is explicitly protected in Texas statutes governing NPHOs.

D. Nonprofit Health Organizations (NPHOs)

NPHOs are a statutory workaround to the corporate practice doctrine. They:

  • Allow corporations controlled by physicians to employ doctors and bill for their services.
  • Must be certified by the Texas Medical Board.
  • Are explicitly prohibited from controlling physicians’ professional judgment.
  • Are required to implement policies ensuring independent medical judgment and quality of care.

They thus occupy a middle ground between traditional, independent medical practices and large corporate health systems.

E. Direct vs. Vicarious Liability Claims

A direct liability claim alleges that the defendant’s own actions or omissions (e.g., failing to have proper policies, negligent hiring, negligent credentialing) caused the injury. For example, a plaintiff might claim:

  • A hospital failed to maintain adequate policies for a high-risk procedure.
  • A health system negligently credentialed an incompetent physician.

A vicarious liability claim alleges that:

  • The negligent act was committed by an agent or employee (here, the physician), and
  • The defendant should be liable because of the employer–employee (or principal–agent) relationship.

Renaissance concerns only vicarious liability of the NPHO for Dr. Burke’s alleged negligence. The Court takes pains to distinguish this from direct liability based on NPHO policies, which would be analyzed under ordinary negligence principles and causation rules.

F. Traditional vs. No‑Evidence Summary Judgment

Under Texas procedure:

  • Traditional summary judgment (Rule 166a(c)) requires the movant to prove there is no genuine issue of material fact and that it is entitled to judgment as a matter of law.
  • No‑evidence summary judgment (Rule 166a(i)) allows a movant, after adequate time for discovery, to assert that there is no evidence of one or more essential elements of the opponent’s claim, shifting the burden to the nonmovant to produce some evidence on each challenged element.

Renaissance chose the traditional route and conceded there were no factual disputes relevant to its motion. That strategic choice shaped the Supreme Court’s analysis.

VII. Anticipated Impact and Practical Implications

A. For Nonprofit Health Organizations and Similar Employers

This decision gives NPHOs both:

  • Reassurance that they are not categorically immune from vicarious liability (which would invite legislative attention and could undermine federal “bona fide employment” positions in anti-kickback contexts), and
  • A new, targeted defense against vicarious liability where the alleged negligence lies squarely within protected independent medical judgment.

Key compliance and litigation implications:

  • Contract drafting: NPHO employment agreements should carefully delineate:
    • Areas of legitimate, non-clinical control (scheduling, staff allocation, resource provision, documentation protocols, etc.).
    • Explicit respect for, and non-interference with, independent medical judgment.
  • Policy development: NPHOs must implement robust policies that:
    • Promote quality and patient safety.
    • Facilitate independent clinical decision-making rather than dictate it.
    • Can be shown, if challenged, to operate as frameworks and safeguards rather than as clinical commands.
  • Litigation strategy:
    • NPHOs now have a defined basis to argue: “We could not have lawfully controlled the specific clinical decisions alleged to be negligent, so we cannot be vicariously liable.”
    • They may pursue early no‑evidence motions focused on the plaintiff’s inability to show a lawful right of control over the specific acts or omissions at issue.

B. For Plaintiffs and Their Counsel

Plaintiffs bringing malpractice claims involving NPHOs will need to plead and prove with more precision:

  • What exactly the physician is alleged to have done or failed to do.
  • How the NPHO, consistent with statutory restrictions, could have directed or controlled that aspect of the work.

In practice, this may require:

  • Greater use of experts to explain what aspects of a procedure are:
    • Purely clinical judgment, versus
    • Reasonably subject to institutional policies or oversight without intruding on clinical judgment.
  • Discovery directed at:
    • The NPHO’s policies and protocols.
    • The scope of contractual rights between the NPHO and its physicians.
    • How, in practice, the NPHO supervises or evaluates physician performance.
  • Pleading both:
    • Vicarious liability theories (where lawful control is plausible), and
    • Direct negligence theories (e.g., negligent policies, inadequate staffing, equipment choices), as appropriate.

C. For Hospitals and Other Health-Care Entities

While this opinion addresses NPHOs specifically, its reasoning may influence how Texas courts:

  • Interpret statutes that similarly limit institutional control over professional judgment (e.g., in other health professions).
  • Analyze the interplay between corporate practice doctrines and vicarious liability.
  • Distinguish between:
    • Lawful administrative oversight, and
    • Unlawful interference with clinical decision-making.

Hospitals and managed-care entities that employ or contract with physicians should reexamine their structures and contracts to ensure consistency with both:

  • Any statutory non-interference provisions, and
  • The need to maintain sufficient control over non-clinical aspects to manage quality, safety, and risk.

D. For Trial Courts

Trial courts will be required to manage a more nuanced inquiry in NPHO cases:

  • Pleadings: Courts should ensure that plaintiffs clearly specify:
    • The alleged negligent acts or omissions of the physician, and
    • The basis for claiming that those acts fall within the NPHO’s lawful right of control.
  • Summary judgment practice:
    • Traditional motions will need to present evidence or undisputed facts about the scope of contractual and practical control, and show why any hypothetical exercise of that control would intrude on independent medical judgment.
    • No‑evidence motions may target the plaintiff’s proof of a lawful right of control.
  • Jury instructions may need to reflect:
    • That vicarious liability is limited to domains where the NPHO had lawful control.
    • That acts lying wholly within protected professional judgment, which the NPHO may not control, cannot support vicarious liability.

E. Potential Legislative Responses

If future litigation shows persistent confusion or inconsistent outcomes, the Legislature could:

  • Clarify, expand, or restrict NPHO liability by:
    • Expressly providing immunity or limited liability for vicarious claims involving clinical judgment, or
    • Expressly preserving common-law respondeat superior notwithstanding independent-judgment protections.
  • Address related issues, such as:
    • The relationship between NPHO liability and hospital liability when both employ or credential a physician.
    • The availability of ostensible agency theories where patients reasonably believe they are being treated by the institution rather than individual practitioners.

VIII. Relationship with the Concurring Opinion

Justice Bland, joined by Chief Justice Blacklock and Justice Devine, concurred in the judgment but expressed several concerns (as reflected in the majority’s responses and quoted excerpts).

From the majority’s references, the concurrence appears to:

  • Question whether Renaissance fairly raised its statutory “no control” argument in the trial court, suggesting it may not have preserved that argument for appellate review.
  • Warn that the majority’s approach could expand an NPHO’s burden on summary judgment by requiring it to prove that any exercise of control over the alleged negligence would interfere with independent medical judgment.
  • Emphasize that vicarious liability claims based on medical judgment alone should generally fail absent allegations of unlawful interference with that judgment.
  • Highlight that:
    • NPHOs cannot be held vicariously liable for injuries caused by a physician’s exercise of independent medical judgment simply because of allegedly inadequate policies; such theories sound only in direct liability.
    • Any direct-liability claim would still require proof of causation—i.e., that appropriate policies would, in reasonable medical probability, have averted the injury without impinging on medical judgment.

The majority expressly agrees with the concurrence in some respects:

  • It concurs that NPHOs cannot be vicariously liable for injuries caused solely by a physician’s exercise of independent judgment due to allegedly inadequate policies.
  • It agrees that direct-liability claims must satisfy ordinary causation requirements.

However, the majority parts ways with the concurrence on a key point: the majority rejects the view that vicarious liability claims involving medical judgment are categorically meritless absent allegations of unlawful interference. It instead adopts a more nuanced rule: if the alleged negligence lies in a domain where the NPHO could lawfully exercise control without interfering with independent judgment, vicarious liability is possible even if clinical judgment is implicated.

Thus, the dividing line is not “medical judgment vs. non-medical matters,” but “protected professional judgment that the NPHO may not control vs. aspects of practice that the NPHO may lawfully influence or direct.”

IX. Key Takeaways and Conclusion

A. Core Doctrinal Takeaways

  1. NPHOs are not categorically immune from vicarious liability.
    The creation of NPHOs did not abolish respondeat superior in the medical context. NPHOs can be employers that face vicarious liability for physician negligence.
  2. Licensing limitations and independent judgment do not, by themselves, negate employment status.
    Consistent with St. Joseph Hospital and Murk, the fact that physicians must exercise independent judgment and that only individuals can be licensed to practice medicine does not preclude employer–employee relationships or vicarious liability.
  3. Section 162.0021 narrows, but does not extinguish, the right of control.
    By prohibiting NPHOs from interfering with or directing professional judgment, the statute narrows the domain in which they may exercise control. That narrowed domain determines the scope of potential vicarious liability.
  4. New standard for NPHO vicarious liability.
    An NPHO may be held vicariously liable for an employed physician’s negligence only if:
    • It had a right of control over the specific acts or omissions alleged to be negligent, and
    • Exercising that control would not have interfered with the physician’s independent medical judgment.
  5. Direct vs. vicarious liability remain distinct.
    Claims that an NPHO failed to adopt or enforce proper policies concern direct liability and require proof of standard of care and causation. Vicarious liability focuses on the physician’s acts and the nature of the NPHO–physician relationship.
  6. Summary judgment burdens are shaped by the statutory framework.
    An NPHO seeking traditional summary judgment must show either that no lawful right of control existed regarding the alleged negligence or that any conceivable exercise of such control would have violated independent-judgment protections.

B. Significance in the Broader Legal Context

Renaissance Medical Foundation v. Lugo is a precedential decision at the intersection of:

  • Common-law tort principles governing vicarious liability.
  • The corporate practice of medicine doctrine.
  • Statutory reforms creating modern physician-employment vehicles like NPHOs.

The decision:

  • Affirms the ongoing vitality of right-of-control as the linchpin of respondeat superior, even in regulated professional settings.
  • Demonstrates how the Court harmonizes long-standing common-law rules with new statutory structures, as it previously did with staff leasing in DEL Industries and franchised service stations in Tidwell.
  • Provides a framework that:
    • Respects physicians’ legally protected independent judgment,
    • Recognizes necessary institutional oversight and policy-making, and
    • Addresses fairness concerns by not holding entities liable for acts in domains they are legally forbidden to control.

Going forward, this case will likely be cited as the leading Texas authority on when and how nonprofit health organizations can be held vicariously liable for physician malpractice. It will shape litigation strategy, contract drafting, and compliance efforts for physician-employing entities, while providing trial courts with a clear, if nuanced, standard for resolving vicarious liability claims in this complex statutory landscape.

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