Independent Medical Judgment and Vicarious Liability: The Texas Supreme Court’s New Framework for Nonprofit Health Organizations in Renaissance Medical Foundation v. Lugo

Introduction

The Supreme Court of Texas’s decision in Renaissance Medical Foundation v. Lugo, No. 23‑0607 (Tex. May 23, 2025), tackles a modern problem in Texas medical tort law: how far an employer‑based liability theory can extend when a statute both authorizes physician employment by certain entities and forbids those entities from interfering with physicians’ “independent medical judgment.”

The defendant, Renaissance Medical Foundation (“Renaissance” or “the Practice”), is a nonprofit health organization (NPHO) certified under Texas Occupations Code chapter 162. It employed neurosurgeon Dr. Michael Burke, who performed brain surgery on the minor daughter of respondent Rebecca Lugo at Doctors Hospital at Renaissance. The surgery allegedly resulted in severe and permanent neurological injury, which Dr. Burke later attributed to the migration of a retractor into the child’s brainstem.

Lugo sued:

• Dr. Burke for medical negligence,
• the hospital for vicarious liability for a surgical technician’s negligence, and
• Renaissance for vicarious liability for Dr. Burke’s negligence as his employer.

Renaissance filed a traditional motion for summary judgment on an all‑or‑nothing theory: as an NPHO that cannot “practice medicine” or interfere with professional judgment, it could not, as a matter of law, have the right of control needed for respondeat superior liability and thus could not be vicariously liable for Dr. Burke’s malpractice.

The trial court denied summary judgment but allowed a permissive interlocutory appeal, and the court of appeals affirmed. The Supreme Court granted review to resolve a purely legal question:

Does Texas’s NPHO statute modify the common‑law rules of vicarious liability for an employer’s responsibility for its employee‑physician’s torts?

The Court’s answer is nuanced:

• Yes, the statute modifies the scope of an NPHO’s vicarious liability.
• No, it does not abolish vicarious liability altogether.

The new rule: An NPHO may be held vicariously liable for the negligent acts or omissions of its employed physicians only to the extent that the organization could lawfully exercise a right of control over those acts or omissions without interfering with the physician’s independent medical or professional judgment.

Because Renaissance did not conclusively show that any control it might lawfully exercise over Dr. Burke’s allegedly negligent conduct would necessarily interfere with his independent professional judgment, it was not entitled to traditional summary judgment. The Court therefore affirmed the denial of its motion and remanded.

Summary of the Opinion

A. Holding in One Sentence

A nonprofit health organization that employs physicians may be vicariously liable for their negligence, but only for those aspects of their work that the organization can lawfully control without interfering with the physicians’ independent medical judgment as protected by Occupations Code chapter 162.

B. Key Components of the Decision

1. Common‑law baseline reaffirmed. Texas still applies the traditional right‑of‑control test to distinguish employees from independent contractors for respondeat superior purposes.
2. Licensing of individuals and independent judgment do not negate employment.
   • The fact that only individuals can be licensed to practice medicine does not prevent an employer–employee relationship between an entity and a physician.
   • A physician’s obligation to exercise professional and independent judgment does not, by itself, eliminate the employer’s right of control for vicarious liability purposes.
3. Chapter 162 modifies the scope of controllable conduct.
   • An NPHO “may not interfere with, control, or otherwise direct a physician’s professional judgment” contrary to law or Board rules (Tex. Occ. Code § 162.0021).
   • It must adopt policies that ensure physicians “exercise independent medical judgment,” including quality‑assurance policies (§ 162.0022).
   • These provisions narrow the range of tasks over which an NPHO may lawfully exert control and, correspondingly, the range of tortious conduct for which it may be vicariously liable.
4. The new analytical framework. When an NPHO is sued solely on vicarious liability for an employed physician’s negligence, the inquiry is:
   1. Did the NPHO have a right of control (by contract or practice) over the specific acts/omissions alleged to be negligent?
   2. Would exercising that right of control interfere with the physician’s independent medical or professional judgment?

   Only if the answer to (a) is “yes” and (b) is “no” can vicarious liability attach.

5. Application to Renaissance.
   • The employment agreement, on its face, gave Renaissance substantial control over Dr. Burke’s work (exclusive service to its patients, at sites it selected, under its policies, with materials it supplied, on a salaried, full‑time basis).
   • But the record, by the parties’ agreement, was limited to legal issues; it did not address whether controlling the specific alleged negligence (e.g., failing to secure or monitor a retractor) would necessarily intrude on independent medical judgment.
   • Because Renaissance sought purely legal summary judgment (and did not carry the statutory standard it advocated), denial of its motion was correct.
6. Scope of ruling. The Court:
   • Affirmed the court of appeals’ judgment,
   • Clarified the correct standard for NPHO vicarious liability, and
   • Expressly allowed Renaissance to seek summary judgment again on remand under the clarified framework.

Doctrinal and Statutory Background

I. Corporate Practice of Medicine and NPHOs

Historically, Texas followed a strict “corporate practice of medicine” doctrine:

• Only licensed individuals could practice medicine.
• Corporations or lay entities could not employ physicians to furnish care for a fee, in order to prevent unlicensed practice and “lay control” of medical decisions.

In 1999, the Legislature created limited exceptions by authorizing certain entities—among them nonprofit health organizations—to employ physicians:

• An NPHO must be a nonprofit corporation.
• It must be organized exclusively by and managed by Board‑licensed physicians actively practicing medicine.
• It is certified by the Texas Medical Board under Occ. Code § 162.001.

At the same time, the Legislature protected physician autonomy within NPHOs by stipulating:

• The NPHO may not “interfere with, control, or otherwise direct a physician’s professional judgment” contrary to law or Board rules (§ 162.0021).
• The NPHO must adopt and enforce policies ensuring physician “independent medical judgment” and including quality‑assurance subjects (§ 162.0022).
• The employed physician “retains independent medical judgment” and cannot be disciplined for reasonably advocating for patient care (§ 162.0023).
• These statutory requirements “may not be voided or waived by contract” (§ 162.0024(a)).

These provisions create a deliberate tension:

NPHOs may employ physicians and thereby benefit from an employment framework, but they are prohibited from usurping the physician’s core professional decision‑making.

II. Common‑Law Vicarious Liability Framework

Under Texas common law, an employer is vicariously liable for its employee’s torts committed in the course and scope of employment but not for the torts of independent contractors. The “supreme test” is the right of control over “the progress, details, and methods of operations of the work.” Limestone Products Distrib., Inc. v. McNamara, 71 S.W.3d 308, 312 (Tex. 2002).

Key principles:

• Right of control may arise by contract or from actual exercise of control. Shell Oil Co. v. Khan, 138 S.W.3d 288, 292 (Tex. 2004).
• Texas courts commonly apply the five McNamara factors to distinguish employees from independent contractors:
  1. Independent nature of the worker’s business;
  2. Who furnishes tools and materials;
  3. Right to control progress of the work (beyond final results);
  4. Duration of employment;
  5. Method of payment (time vs job).

In the medical context, Texas had already confronted arguments that, because entities cannot be licensed to practice medicine, they cannot control medical work and therefore cannot be liable for physician malpractice. In St. Joseph Hospital v. Wolff, 94 S.W.3d 513 (Tex. 2002) (plurality op.), the Court rejected that reasoning, adopting Restatement (Second) of Agency § 220 cmt. i:

Regulation of a profession through licensing and statutes does not prevent an employer from retaining sufficient control over the employee to create a master–servant relationship.

In Murk v. Scheele, 120 S.W.3d 865 (Tex. 2003), the Court similarly held that a government hospital could be vicariously liable under the Tort Claims Act for a physician employee’s malpractice even though the physician necessarily exercised independent professional judgment. The necessity of such judgment “did not, by itself, vitiate [the hospital’s] right to control the details of his practice.”

Those earlier cases dealt with general hospitals or governmental units, not NPHOs; and they did not have to account for a specific statutory command forbidding interference with independent medical judgment comparable to the NPHO provisions.

Precedents and Authorities Cited

I. Foundational Vicarious Liability and Employment Cases

• Limestone Products Distrib., Inc. v. McNamara, 71 S.W.3d 308 (Tex. 2002)
  • Reaffirmed the right‑of‑control test and articulated the five factor framework.
  • Provides the doctrinal template for assessing employee status in this case.
• St. Joseph Hospital v. Wolff, 94 S.W.3d 513 (Tex. 2002)
  • Rejected the argument that a hospital cannot be vicariously liable because it cannot be licensed to practice medicine.
  • Held that even if a statute prohibits corporate practice, the factual reality of an employment relationship can still exist and support vicarious liability.
  • Quoted Restatement (Second) of Agency § 220 cmt. i to emphasize that regulatory statutes do not negate employer control.
• Murk v. Scheele, 120 S.W.3d 865 (Tex. 2003)
  • Held that a physician whose practice is controlled by a governmental employer is not excluded from being an “employee” for Texas Tort Claims Act purposes simply because he exercises independent medical judgment.
  • Clarified that professional autonomy and employment status coexist for vicarious liability.
• Marino v. Lenoir, 526 S.W.3d 403 (Tex. 2017)
  • Confirmed that the Tort Claims Act definition of “employee” tracks common‑law distinctions between employees and independent contractors.
  • Relied on Wolff and similar cases to reaffirm using right‑of‑control analysis.
• Texas Department of Transportation v. Self, 690 S.W.3d 12 (Tex. 2024)
  • Reiterated that, under the Tort Claims Act, analyzing “employee” status follows the familiar common‑law worker‑classification framework.
• Baptist Memorial Hospital System v. Sampson, 969 S.W.2d 945 (Tex. 1998)
  • Earlier hospital‑liability case addressing independent contractor versus employee relationships in healthcare.
• Waste Management of Texas, Inc. v. Stevenson, 622 S.W.3d 273 (Tex. 2021) (Boyd, J., concurring)
• SandRidge Energy, Inc. v. Barfield, 642 S.W.3d 560 (Tex. 2022)
  • Discussed presumption that when the Legislature uses a term with a developed common‑law meaning (such as “employ”), it usually intends that established meaning.
  • The Court invokes this canon when noting that the NPHO statute allows NPHOs to “employ” physicians, a term that normally carries vicarious‑liability consequences.

II. Statutory Alterations to Common‑Law Right‑of‑Control

• Texas Workers’ Compensation Insurance Fund v. DEL Industries, Inc., 35 S.W.3d 591 (Tex. 2000)
  • Confronted the Staff Leasing Services Act, which gave leasing companies statutory employer status over leased employees and the exclusive right to elect workers’ compensation coverage.
  • Held that the Act “statutorily supersede[d] the common law right-of-control test” for determining employer status in workers’ compensation coverage disputes.
  • Serves as a template for how a statute can modify the usual control test in a specific industry or regulatory context.
• Exxon Corp. v. Tidwell, 867 S.W.2d 19 (Tex. 1993)
  • Involved an oil company and its service station lessee; the Court recognized a “hybrid” framework combining agency and landlord–tenant law.
  • Held that in personal‑injury cases involving criminal acts at service stations, the real question is who had “specific control over the safety and security of the premises,” not generalized operational control.
  • This “specific‑control” inquiry is echoed in the Court’s approach to NPHOs: the focus is on control over the particular type of act or omission alleged to be negligent.

III. Limits on Task‑by‑Task Control Analysis

• Painter v. Amerimex Drilling I, Ltd., 561 S.W.3d 125 (Tex. 2018)
  • Rejected as “unworkable” a generalized approach that would treat a worker as shifting between employee and independent contractor status on a “task-by-task” basis throughout the day.
  • In Renaissance, the Court distinguishes Painter on the ground that it involved ordinary employers who could exercise control but chose not to; in contrast, NPHOs are statutorily barred from controlling certain aspects of physician conduct.

IV. Medical Malpractice, Policies, and Direct vs Vicarious Liability

• Certified EMS, Inc. v. Potts, 392 S.W.3d 625 (Tex. 2013)
  • Drew a clear distinction between:
    • Vicarious liability (fault based on an agent’s conduct and the principal–agent relationship), and
    • Direct liability (fault based on the defendant’s own acts/omissions, such as its policies or training).
  • Emphasized that these theories involve distinct sets of operative facts.
  • The Renaissance opinion relies on this distinction in explaining that claims based on NPHO policies are direct‑liability claims, not vicarious ones.
• Bush v. Columbia Medical Center, No. 23‑0460 (Tex. May 23, 2025)
• Marsillo v. Dunnick, 683 S.W.3d 387 (Tex. 2024)
• Fortner v. Hospital of the Southwest, LLP, 399 S.W.3d 373 (Tex. App.—Dallas 2013, no pet.)
• El Paso Healthcare Sys., Ltd. v. Monsivais, No. 08‑18‑00043‑CV, 2019 WL 5616973 (Tex. App.—El Paso Oct. 31, 2019, pet. denied)

The cited cases illustrate how:

• Hospitals and institutions may be directly liable for injuries caused by inadequate or breached policies and protocols (e.g., failure to provide or enforce snakebite guidelines, standing orders, surgical protocols).
• Such policy‑based liability is distinct from—and can exist alongside—vicarious liability for an individual practitioner’s negligence.

V. Statutory and Secondary Authorities

• Texas Occupations Code, Chapter 162
  • § 162.001: Defines and authorizes nonprofit health organizations.
  • § 162.0021: Prohibits NPHOs from interfering with or controlling physicians’ professional judgment contrary to law.
  • § 162.0022: Requires NPHOs to adopt and enforce policies guaranteeing independent medical judgment, including quality‑assurance policies.
  • § 162.0023: Affirms that employed physicians retain independent medical judgment and cannot be disciplined for patient‑care advocacy.
  • § 162.0024(a): Makes these requirements non‑waivable by contract.
  • § 162.157: Expressly grants immunity in another context, illustrating the Legislature knows how to eliminate liability when it wishes (the Court notes that the NPHO vicarious‑liability question is not addressed with such an immunity provision).
• Texas Occupations Code, Chapter 151 & 155
  • Define “practice of medicine” and “person” and restrict licensure to individuals.
  • Provide the backdrop for the historical corporate‑practice prohibition.
• Federal Anti‑Kickback Statute, 42 U.S.C. § 1320a‑7b(b)
  • Criminalizes payments to induce referrals for federally reimbursed healthcare services.
  • Creates a safe harbor for “any amount paid by an employer to an employee (who has a bona fide employment relationship with such employer) for employment in the provision of covered items or services.”
  • The Court observes that NPHOs like Renaissance invoke this safe harbor, relying on the existence of a bona fide employment relationship with physicians—undercutting their argument that physicians are functionally independent contractors for tort purposes.
• Restatement (Third) of Torts: Medical Malpractice § 15 (ALI 2024)
  • States that medical institutions are vicariously liable for employee healthcare providers acting within scope of employment.
  • Defines “employee” in terms of the institution’s right to control the manner and means of work.
  • Comment d emphasizes that professional autonomy does not displace respondeat superior; employee‑physicians may retain independent medical judgment and yet generate employer vicarious liability.
  • The Court notes its holdings are consistent with this Restatement, while adding a statutory overlay specific to Texas NPHOs.

The Court’s Legal Reasoning

I. Licensing and Independent Medical Judgment Do Not Eliminate Vicarious Liability

Renaissance first argued that because:

• only individuals can be licensed to practice medicine (Occ. Code §§ 151.002, 155.001), and
• its contract provided that Dr. Burke “shall retain the right to exercise [his] independent medical judgment” in treating patients,

it could not legally “control” the practice of medicine and therefore could not be vicariously liable for malpractice.

The Court rejects this argument on several grounds:

1. Licensure of individuals does not preclude factual employment.
   • A corporation is not “practicing medicine” merely because it exerts contractual control over its employee’s work.
   • Wolff squarely addressed and rejected the contention that the corporate‑practice prohibition immunizes entities from vicarious liability.
   • Quoting Wolff, the Court reiterates that statutory prohibitions on certain relationships do not make those relationships factually impossible—if a physician is in fact an employee, the employer is vicariously liable for the physician’s negligence.
2. Independent medical judgment is inherent to the profession, not a defense to employment status.
   • Murk held that the necessity of independent professional judgment does not “vitiate” an employer’s right to control the details of a physician’s practice.
   • The Court rejects the idea that every medical decision made with professional judgment sits “outside” an employer’s right of control for vicarious‑liability purposes.
   • Murk was not confined to Tort Claims Act cases; the Act’s “employee” definition tracks common‑law employment, so the same analysis applies more broadly.
3. Consistency with Restatement and prior Texas law.
   • The Restatement (Third) confirms that independent judgment and employer control coexist in medical employment.
   • Thus, the very idea that professional autonomy categorically bars employer liability is out of step with both the Restatement and Texas precedents.

In sum, the Court holds that:

The facts that (a) only individuals can be licensed to practice medicine and (b) physicians must exercise independent medical judgment do not, by themselves, defeat common‑law vicarious liability.

II. Chapter 162 Narrows the Scope of Controllable Conduct—and Thus of Vicarious Liability

The core of the opinion lies in reconciling two features of the NPHO statutory regime:

• The statute empowers NPHOs to “employ” physicians, implying that they can be traditional employers with respondeat superior liability;
• The same statute forbids NPHOs from interfering with, controlling, or directing physicians’ “professional” or “independent medical” judgment.

The Court reasons as follows:

1. “Employ” retains its common‑law meaning absent a clear contradiction.
   • Under SandRidge Energy, when the Legislature uses a term like “employ” that has a long‑standing common‑law meaning (including vicarious liability), courts presume that meaning applies.
   • Nothing in chapter 162 expressly immunizes NPHOs from tort liability (in contrast to § 162.157, which grants specific immunity in a separate context).
   • Indeed, NPHOs rely on the federal anti‑kickback safe harbor for “bona fide employment relationships” with physicians, reinforcing that they themselves view these as traditional employment arrangements.
2. Nonetheless, the statute explicitly strips NPHOs of certain control.
   • Section 162.0021 prohibits an NPHO from controlling or directing a physician’s professional judgment contrary to law or Board rules.
   • Section 162.0022 requires policies that ensure physicians exercise independent medical judgment and that reserve the “sole authority to engage in the practice of medicine” to physicians.
   • Section 162.0024(a) makes these protections non‑waivable.
   • These provisions narrow the universe of tasks over which an NPHO can lawfully assert control.
3. Vicarious liability cannot extend to conduct the employer is statutorily forbidden to control.
   • Under traditional Texas law, vicarious liability hinges on the employer’s right of control.
   • If a statute removes the right to control certain categories of tasks (here, the physician’s exercise of independent medical judgment), then, as to those tasks, the employer lacks the predicate for vicarious liability.
   • As in DEL Industries and Tidwell, statutory and industry‑specific rules can modify or re‑focus the control inquiry.

Accordingly, the Court announces a refined test for NPHOs:

An NPHO 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.

III. The Two‑Step Inquiry for NPHO Vicarious Liability

Building on Tidwell and the statutory scheme, the Court refines the control inquiry for NPHO cases into a targeted analysis:

1. Right of control over the specific allegedly negligent conduct.
   • The plaintiff must first identify the specific acts or omissions said to constitute negligence (e.g., failing to secure a retractor, failing to monitor its position).
   • The parties and the court then ask whether the NPHO had a contractual right or actually exercised control over those specific tasks.
   • This can be shown through employment contracts, policies, or evidence of actual operational control.
2. Compatibility of that control with independent medical judgment.
   • If such a right of control exists, the next question is whether exercising that control would interfere with the physician’s independent medical or professional judgment.
   • Some controls—e.g., compliance with safety or equipment‑handling procedures that do not dictate clinical choices—may not intrude on independent medical judgment.
   • Other controls—e.g., requiring a specific diagnosis, mandating or forbidding a particular surgery over the physician’s professional objection—would plainly intrude and are statutorily forbidden.

If an NPHO shows that any possible control over the alleged negligent act or omission would necessarily intrude on protected independent judgment, then, as a matter of law, vicarious liability cannot attach for that negligence. Conversely, if the plaintiff can show that the NPHO had a right of control over operational or technical aspects of care that would not interfere with independent judgment, vicarious liability may apply.

The Court underscores that:

• This approach does require a more granular look at the alleged negligent acts than in ordinary employer–employee cases.
• However, unlike the Painter “task‑by‑task” paradigm, the granularity here is driven by a statutory line between:
  • professional judgment (off‑limits to NPHO control), and
  • other aspects of medical practice and operations (potentially controllable).

IV. The Role of Policies: Direct vs Vicarious Liability

The opinion also clarifies how policy‑based claims fit into this framework:

• Chapter 162 requires NPHOs to adopt policies ensuring independent medical judgment and quality assurance.
• Policies that “reserve the sole authority to engage in the practice of medicine to a physician” are permissible, and policies may “guide or suggest treatment paths without mandating them.”
• If a plaintiff complains that an NPHO lacked required policies or had inadequate ones, that theory is a claim for the NPHO’s direct negligence, not vicarious liability for the physician’s negligence.
• Causation must be separately established in such a direct‑liability claim (e.g., that a reasonable NPHO would have adopted a policy that, in reasonable medical probability, would have prevented the harm while respecting independent judgment).

The Court explicitly agrees with the concurring opinion that an NPHO cannot be held vicariously liable based solely on its policies. Vicarious liability is about the physician’s conduct; policy‑based liability is about the organization’s own conduct.

V. Application to Renaissance’s Summary Judgment Motion

With this framework in place, the Court turns to whether Renaissance met its burden on its traditional summary judgment motion:

1. Employment Agreement analysis.
   • The contract stated that Dr. Burke was employed “to provide professional medical services” exclusively to Renaissance’s patients at specified locations “as directed” by Renaissance and “in accordance with [its] protocols, policies and procedures.”
   • Renaissance supplied the tools and materials, required at least 40 hours per week, paid a regular salary, and could change practice sites—strong indicators of an employment relationship under McNamara.
   • The court of appeals reasonably concluded Dr. Burke was an employee acting within scope of that employment, and the Supreme Court did not disturb that conclusion.
   • The contract also stated that Dr. Burke retained the right to exercise independent medical judgment. However, by statute that right cannot be waived, and its inclusion does not negate the rest of the contract’s control‑conferring provisions.
2. Statutory overlay.
   • Because chapter 162’s requirements cannot be waived by contract, the agreement must be read against the statutory prohibition on controlling professional judgment.
   • The key question becomes: Would exercising contractual control over the negligent acts alleged in Lugo’s petition necessarily interfere with Dr. Burke’s independent medical judgment?
3. Renaissance’s legal strategy and record.
   • Renaissance’s motion was framed as a pure question of law. The parties stipulated that no material fact disputes needed resolution to decide it.
   • Renaissance argued that the NPHO statute completely prevented it from controlling “medical care,” so it could never be vicariously liable for medical negligence.
   • The record thus contained no evidence directed to whether controlling the particular alleged negligence (e.g., securing and monitoring a retractor) would intrude on independent medical judgment.
4. Burden on a traditional summary judgment movant.
   • As a defendant seeking traditional summary judgment, Renaissance had to conclusively negate an essential element of Lugo’s vicarious liability theory—here, the NPHO’s right of control consistent with the statute.
   • Under the Court’s interpretation of chapter 162, that meant it had to show that any control it could exercise over the specific alleged negligence would have interfered with Dr. Burke’s independent medical judgment.
   • Because Renaissance did not attempt this showing and instead maintained the incorrect proposition that it could not control “medical care” at all, its legal theory failed.

The Court therefore held that Renaissance did not conclusively establish that it lacked a legally allowed right of control over Dr. Burke’s allegedly negligent conduct, and affirmed the trial court’s denial of traditional summary judgment.

Importantly, the Court emphasized that its ruling:

• Does not decide whether Dr. Burke’s alleged failures (e.g., failing to secure or monitor the retractor) actually involved independent medical judgment or not;
• Does not determine whether Renaissance ultimately can or cannot be held vicariously liable;
• Simply holds that, on the record and legal arguments presented, Renaissance had not carried its burden for traditional summary judgment.

Relationship to the Concurring Opinion

Justice Bland, joined by Chief Justice Blacklock and Justice Devine, filed a concurring opinion. While the majority’s detailed discussion provides only limited windows into the concurrence, a few points of divergence are apparent from the majority’s responses:

• Preservation / grounds in the summary judgment motion.
  • The concurrence questions whether Renaissance sufficiently preserved its statutory argument below and whether its motion actually raised the issue the majority addresses.
  • The majority responds that Renaissance did raise lack of control over Dr. Burke’s medical care as a ground, and the statutory argument is fairly included as a “subsidiary question” within that ground.
• Scope of NPHO vicarious liability where medical judgment is alleged.
  • The concurrence apparently takes the view (quoted by the majority) that vicarious liability claims against NPHOs “that allege a physician’s medical judgment caused the patient’s injury” lack merit unless the plaintiff also alleges unlawful interference with that judgment.
  • The majority expressly disagrees, insisting that:
    • Plaintiffs may instead show that the alleged negligence falls within a category of tasks the NPHO could lawfully control without intruding on independent judgment.
    • Moreover, plaintiffs may pursue direct‑liability theories based on NPHO policies, separate from vicarious theories.
• Summary judgment burdens.
  • The concurrence suggests the majority impermissibly expands a defendant NPHO’s summary‑judgment burden by requiring it to disprove that exercising control would intrude on independent medical judgment.
  • The majority answers that this follows straightforwardly from the statutory framework: once the plaintiff has put the NPHO’s control in issue (by alleging an employment relationship and vicarious liability), the NPHO must, as the movant, conclusively negate the element of lawful, non‑intrusive control to obtain traditional summary judgment.

Despite these disagreements, the majority and concurring opinions share important common ground:

• Both recognize that NPHOs cannot be held vicariously liable for policy‑based failures; such claims sound in direct negligence.
• Both acknowledge that chapter 162 imposes real constraints on NPHOs’ ability to control physicians’ professional decisions.
• Both leave intact substantial roles for direct‑liability theories (e.g., negligent hiring, negligent policies) that do not rest on respondeat superior.

Practical Impact and Future Cases

I. A Structured Test for NPHO Vicarious Liability

In practice, Renaissance creates a structured multi‑step analysis for future NPHO cases:

1. Employee status:
   • Apply the McNamara factors and contract terms to determine whether the physician is an employee or independent contractor of the NPHO.
   • Chapter 162’s permission to “employ” physicians reinforces that true employment is contemplated.
2. Course and scope:
   • Determine whether the physician was acting within the course and scope of employment at the time of the alleged negligence.
3. Specific negligent acts or omissions:
   • Plead and prove the particular acts or failures to act alleged to have caused the injury (e.g., failing to secure equipment, failing to monitor vital signs, mis‑positioning a device).
4. Right of control over those acts:
   • Identify contractual provisions and policies (or actual practices) that show whether the NPHO had the right to control those acts or omissions.
5. Compatibility with independent medical judgment:
   • Assess, often with expert testimony, whether such control would encroach upon the physician’s professional judgment, as protected by § 162.0021 and § 162.0022.
   • If control is incompatible with independent medical judgment, the statute deprives the NPHO of the right to control those acts, and vicarious liability is unavailable for that conduct.
   • If control is compatible (e.g., technical or operational protocols), respondeat superior may apply.

II. Litigation Strategy for Plaintiffs

Plaintiffs suing NPHOs will need to:

• Draft pleadings that identify not only “medical negligence” in general, but particular acts or omissions that plausibly fall within an NPHO’s permissible sphere of control (e.g., adherence to standard safety procedures, equipment handling, mandated checklists), not just high‑level diagnostic or treatment choices.
• Obtain and scrutinize:
  • employment contracts,
  • policy manuals, and
  • quality‑assurance and protocol documents
  to show operational control.
  • Develop expert testimony to:
    • distinguish between professional judgment and technical or operational tasks, and
    • explain how NPHO control would or would not intrude on independent medical judgment.
  • Consider parallel direct‑liability theories (e.g., negligent policies, negligent credentialing) which do not depend on chapter 162’s constraints on vicarious liability.

  III. Litigation Strategy for NPHOs

  NPHOs, in turn, will likely:

  • Emphasize contractual and statutory language concerning independent medical judgment, arguing that the alleged negligence is inseparable from professional judgment.
  • Move for summary judgment (traditional or no‑evidence) by:
    • identifying the alleged negligent acts,
    • arguing that any control over those acts would necessarily intrude on protected professional judgment, and
    • presenting expert testimony to that effect where appropriate.
  • Carefully design policies and protocols that:
    • ensure quality and safety and satisfy § 162.0022,
    • clearly reserve clinical decision‑making to physicians, and
    • minimize ambiguity over whether the NPHO purports to control matters of professional judgment.
  • Use the NPHO statute as a partial shield:
    • to argue that they cannot be held vicariously liable for purely professional judgment errors, and
    • to contend that imposing liability in those circumstances would disrupt the legislative scheme.

  IV. Regulatory and Policy Implications

  The decision may have broader implications:

  • Risk allocation and insurance.
    • NPHOs may seek to reallocate risk contractually, ensuring that malpractice coverage for physicians is robust where vicarious liability is limited.
    • Insurers may adjust pricing and coverage structures for NPHOs in light of this partly narrowed employer risk.
  • Corporate structure and physician autonomy.
    • The ruling reinforces legislative intent that physicians, even as employees, remain the ultimate decision‑makers on clinical matters.
    • At the same time, it recognizes that employers may—and in some contexts must—impose policies promoting safety and quality without usurping clinical judgment.
  • Interactions with federal fraud and abuse law.
    • By acknowledging that NPHOs maintain bona fide employment relationships with physicians, the Court’s reasoning supports their reliance on federal safe harbors while clarifying that Texas law does not convert those employees into tort‑immune actors.

  Clarifying Complex Legal Concepts

  I. Vicarious vs Direct Liability

  • Vicarious liability (respondeat superior):
    • The employer is liable because an employee committed a tort within the scope of employment.
    • The employer’s own conduct may be blameless; liability is imposed due to the relationship and the right of control.
  • Direct liability:
    • The organization is liable for its own negligence—such as failing to adopt reasonable policies, failing to train or supervise, or negligently hiring or credentialing a practitioner.
    • Liability is based on the organization’s own acts or omissions, not solely on those of its agents.

  In Renaissance, Lugo asserted only vicarious liability against the NPHO. Claims that Renaissance failed to adopt adequate policies would be direct‑liability claims and are analytically distinct.

  II. Independent Contractor vs Employee

  • Employee:
    • The employer has the right to control the details of the work (e.g., when, where, and how tasks are performed).
    • Employer is generally liable for the employee’s torts committed in the course and scope of employment.
  • Independent contractor:
    • The hiring party specifies only the desired result, not the means or methods of achieving it.
    • No vicarious liability for the contractor’s negligence in most cases.

  Despite the corporate practice of medicine doctrine, Texas recognizes that physicians can be employees—if the factual relationship meets the right‑of‑control test—even though they must also exercise independent judgment.

  III. Independent Medical / Professional Judgment

  “Independent medical judgment” and “professional judgment” refer to clinically grounded decision‑making unique to the physician’s expertise:

  • choices among diagnostic options,
  • selection of treatment modalities,
  • balancing risks and benefits in complex clinical situations,
  • deciding when a procedure is indicated or contraindicated.

  The NPHO statute protects this sphere from employer interference. However, not every action taken during patient care is an exercise of professional judgment in this strict sense. Tasks like:

  • following standardized checklists,
  • ensuring equipment is physically secured,
  • complying with basic infection‑control or safety protocols,

  may be regulated by employer policies without invading professional judgment, depending on context.

  IV. Traditional vs No‑Evidence Summary Judgment

  • Traditional summary judgment (Rule 166a(c)):
    • The movant (here, Renaissance) must conclusively prove all elements of an affirmative defense or negate at least one essential element of the plaintiff’s claim.
    • Any doubts or reasonable inferences favor the non‑movant (here, Lugo).
  • No‑evidence summary judgment (Rule 166a(i)):
    • Permitted after adequate time for discovery.
    • The movant alleges there is no evidence of one or more essential elements of the non‑movant’s claim.
    • The burden shifts to the non‑movant to produce more than a scintilla of evidence raising a genuine fact issue.

  Renaissance filed a traditional motion and stipulated that the issue was purely legal, thus assuming the burden to conclusively negate the vicarious‑liability element given the statutory framework.

  Conclusion

  Renaissance Medical Foundation v. Lugo is a significant development in Texas health‑care liability law. It accomplishes three central tasks:

  1. Reaffirming core principles.
     • Entities can employ physicians and be vicariously liable for their negligence, despite professional licensing restrictions and the necessity of independent medical judgment.
     • The right‑of‑control test remains the lodestar for respondeat superior.
  2. Integrating statutory protections for independent medical judgment.
     • Chapter 162’s prohibition on NPHOs interfering with professional judgment genuinely narrows the universe of conduct they can lawfully control.
     • Vicarious liability cannot extend to those aspects of care the NPHO is forbidden to control.
     • But the statute does not confer blanket immunity; NPHOs remain potentially liable for negligence in areas where lawful control exists.
  3. Providing a workable framework for future disputes.
     • Courts must focus on specific alleged acts or omissions, assess the NPHO’s right of control over them, and ask whether such control would interfere with independent medical judgment.
     • Policy‑based claims against NPHOs are recognized as direct‑liability theories distinct from vicarious liability.
     • Summary judgment practice in NPHO cases will now revolve around whether the movant can conclusively show that any control over the alleged negligence would intrude on protected professional judgment.

  By marrying common‑law respondeat superior with the statutory protections for physician autonomy, the Court creates a hybrid doctrine tailored to the unique role of nonprofit health organizations in Texas’s healthcare system. The decision preserves meaningful avenues of patient redress while respecting legislative limits on corporate influence over medical decision‑making, and it will guide the structuring of NPHO–physician relationships, risk management, and medical‑malpractice litigation for years to come.