Bradford v. Jai Medical Systems Managed Care Organization, Inc.
439 Md. 2
Md.2014Background
- Plaintiff Wilhelmina Bradford (Medicaid beneficiary) was enrolled in Jai Medical Systems MCO and sought podiatric care for a painful bunion.
- Bradford obtained referrals from her Jai-network primary care providers to Dr. Steven Bennett, a podiatrist in Jai’s provider directory who was an independent contractor with a private office.
- Dr. Bennett performed surgery that resulted in postoperative gangrene, leading to partial amputation; Bradford sued Bennett, Bon Secours, Seunarine P.A., and Jai MCO.
- Default judgment was entered against Dr. Bennett; at trial the jury found Jai MCO vicariously liable under a theory of apparent agency and awarded damages (later reduced by statutory cap).
- The Court of Special Appeals reversed, and the Maryland Court of Appeals affirmed: although Bradford may have subjectively believed Bennett worked for Jai, that belief was not objectively reasonable given Jai’s materials and the circumstances.
Issues
| Issue | Bradford's Argument | Jai MCO's Argument | Held |
|---|---|---|---|
| Whether an MCO can be vicariously liable for negligence of a network physician via apparent agency | Apparent agency applies; Jai’s materials and network structure created the appearance Bennett was Jai’s agent and Bradford relied on that belief | No actual agency; network listings and handbook do not create an appearance of employment; Bradford’s belief was unreasonable | An MCO may be liable under apparent agency in principle, but not on these facts; Bradford’s reliance was not objectively reasonable |
| Whether Jai’s provider directory, member handbook, and referrals created a representation of employment | These materials and referrals implied the specialists “belong” to Jai and thus are Jai’s agents | Directory lists thousands of independent providers at varied addresses; handbook language is generic and template-based; referrals do not show employment | Directory/handbook/referrals did not create a reasonable appearance of employment or agency |
| Whether Bradford’s subjective belief (based on seeing Bennett once at a Jai-associated center and being told providers accept the Jai card) sufficed | Her testimony that she saw Bennett at a Jai Medical Center and believed network providers worked for Jai justified reliance | The sighting was disputed and isolated; treatment occurred at Bennett’s private office and hospital not in Jai network — inconsistent with agency | Subjective belief satisfied, but objective-reasonableness element failed |
| Whether Mehlman (hospital apparent agency) controls here | Bradford relied on Mehlman to argue apparent agency can apply to health-network contexts | Jai argued factual distinctions (no physical integration, no presentations suggesting employment) make Mehlman inapplicable | Mehlman supports applying apparent agency doctrine to MCOs in theory, but facts here differ materially; no jury question remained |
Key Cases Cited
- Mehlman v. Powell, 281 Md. 269 (hospital could be liable under apparent agency where ER appeared integral to hospital)
- Chevron U.S.A., Inc. v. Lesch, 319 Md. 25 (apparent agency requires objective reasonableness of plaintiff’s belief)
- Reserve Ins. Co. v. Duckett, 240 Md. 591 (third party must reasonably believe agent has authority)
- B.P. Oil Corp. v. Mabe, 279 Md. 632 (common-knowledge limitations on apparent agency in franchisor context)
- Debbas v. Nelson, 389 Md. 364 (apparent authority disputes are typically jury questions when facts are contested)