David, J.
In Sword v. NKC Hospitals, Inc., our Court adopted the Restatement (Second) of Torts section 429 and held that a hospital may be held vicariously liable for the tortious conduct of an independent contractor through apparent or ostensible agency. 714 N.E.2d 142, 152–53 (Ind. 1999). Today, we consider Sword and Section 429’s reasoning and application to a non-hospital diagnostic medical imaging center.
We hold that Sword and Section 429’s apparent agency principles apply to non-hospital medical entities that provide patients with health care. Therefore, because plaintiff Harold Arrendale has shown there are genuine issues of material fact whether the radiologist who read and interpreted his MRIs was an apparent agent for the defendant Marion Open MRI, we reverse summary judgment in Marion Open MRI’s favor and remand for further proceedings consistent with this opinion.
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On transfer, Marion Open MRI contends that because it is not a hospital, it cannot be held liable under Sword for Dr. Boutselis’s alleged negligence in reviewing and interpreting Arrendale’s MRIs. It argues that the Court of Appeals failed to consider the specific context in which Sword’s rule was applied exclusively to hospitals.
We first look at Sword and its apparent agency analysis for hospitals that use independent contractor physicians. Next, we consider Sword’s application outside the hospital context and expressly adopt its application to non-hospital medical entities that provide health care, including diagnostic imaging facilities like Marion Open MRI. Lastly, we decline to apply this rule only prospectively and apply Sword to this record to conclude there is a genuine issue of material fact as to whether Dr. Boutselis was an apparent agent for Marion Open MRI.
I. Sword, Vicarious Liability, and the Restatement (Second) of Torts Section 429.
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Sword changed the framework of hospital liability through apparent agency. It prevents hospitals from insulating themselves from potential liability by using independent contractor physicians while suggesting to the public that their physicians are employed by the hospital.
II. Sword’s apparent agency principles apply to nonhospital medical entities like Marion Open MRI.
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In response, Arrendale argues that there is no meaningful difference between a patient in a hospital or a patient of a diagnostic imaging center regarding the provider’s manifestations and the patient’s reliance. Arrendale also argues that “the law should meet reasonable people’s expectations,” and that reasonable people expect that the physicians providing them with health care services are employed by the facility that the patient attends, unless the patient is provided with notice to the contrary. Resp. Br. at p. 7.
We agree with Arrendale. We begin our analysis by acknowledging the ongoing changes in the way patients consume heath care, prompting us to apply Sword and its apparent agency rules to non-hospital medical providers. We then find the policy reasons underlying Sword apply equally to Marion Open MRI and non-hospital medical entities providing patients with health care, and apply Sword’s apparent agency principles accordingly. [Footnote omitted.]
A. There is increased reliance on non-hospital medical entities to meet society’s health care needs.
We first note that the way patients consume health care services is changing. Patients now have increasingly more choices than before for where and how they choose to access health care services. For example, the CDC has observed that patients are reducing their reliance on hospitals for their health care needs…
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These observations reflect the evolving shift in the way patients consume health care. Thus, given these continued changes, we “cannot close our eyes to the legal and social needs of our society, and this Court should not hesitate to alter, amend, or abrogate the common law when society’s needs so dictate.” Brooks v. Robinson, 284 N.E.2d 794, 797 (Ind. 1972). Today, we believe that society’s needs so dictate.
B. Given this shift in the way patients consume health care, we apply Sword and its apparent agency rules to non-hospital medical entities.
The changing realities of the way patients consume modern medicine prompt us to evolve our agency law once again to reflect society’s increased reliance on non-hospital entities for its health care needs. See Webster, 2017 WL 3839377 at *7 (recognizing the increased reliance on nonhospital entities for health care services). We see no meaningful difference between a hospital and a non-hospital medical entity considering Sword’s manifestation and reliance inquiries. Hospitals and non-hospital medical care entities alike may make representations that reasonably lead a patient to believe that the physicians providing them health care are the facility’s employees or agents. Both hospitals and non-hospital entities can hold themselves out to the public as providers of health care services, and both receive profits in exchange for providing such services.
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We therefore hold that a non-hospital medical entity holding itself out as a health care provider may be held vicariously liable for its independent contractor physician’s tortious acts unless it gives meaningful notice to the patient, the patient has independent special knowledge of the arrangement between the non-hospital medical entity and its physicians, or the patient otherwise knows about these relationships. [Footnote omitted.] See Sword, 714 N.E.2d at 152.
III. There are genuine issues of material fact whether Dr. Boutselis was an apparent agent for Marion Open MRI.
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Conclusion
As a matter of first impression, we hold that a non-hospital medical entity, including a diagnostic imaging center like Marion Open MRI, may be held liable for the negligent acts of its apparent agents, and expressly apply Sword’s apparent agency rules to such entities. We therefore reverse summary judgment in Marion Open MRI’s favor and remand for further proceedings consistent with this opinion.
Rush, C.J., and Massa, Slaughter, and Goff, JJ., concur.