The opinion
Supreme Court of Texas
══════════
No. 23-0607
══════════
Renaissance Medical Foundation,
Petitioner,
v.
Rebecca Lugo, Individually and as Next Friend of I.B.,
Respondent
═══════════════════════════════════════
On Petition for Review from the
Court of Appeals for the Thirteenth District of Texas
═══════════════════════════════════════
Argued September 11, 2024
JUSTICE BUSBY delivered the opinion of the Court.
JUSTICE BLAND filed a concurring opinion, in which Chief Justice
Blacklock and Justice Devine joined.
Under Texas common law, an employer is vicariously liable for
the torts of its employees within the scope of their employment if it “has
the right to control the progress, details, and methods of operations of
the work.”1 This permissive interlocutory appeal in a medical
1 Limestone Prods. Distrib., Inc. v. McNamara, 71 S.W.3d 308, 312 (Tex.
2002).
malpractice case concerns the alleged vicarious liability of a nonprofit
health organization—a unique type of medical practice that may employ
physicians but “may not interfere with, control, or otherwise direct a
physician’s professional judgment in violation of this subchapter or any
other provision of law.” TEX. OCC. CODE §§ 162.001(b), .0021, .0022(b)(2).
We must decide whether the statute has modified the extent to
which such an organization may be held vicariously liable for the torts
of its employee physicians. We conclude that it has: 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.
Because the defendant organization did not conclusively demonstrate
such interference, we conclude the court of appeals correctly affirmed
the denial of the organization’s motion for summary judgment, and we
remand for further proceedings.
BACKGROUND
Renaissance Medical Foundation (the Practice) is a nonprofit
health organization (NPHO) certified by the Texas Medical Board under
Section 162.001 of the Texas Occupations Code.2 Organized to deliver
health care to the public, the Practice entered into an employment
contract with Dr. Michael Burke, a neurosurgeon. The contract
provided that Dr. Burke was employed “to provide professional medical
services” exclusively to the Practice’s patients at specified locations—
2 The record does not address whether the Practice is certified by the
Board. But the parties have stated that it is, so we accept that fact as true for
purposes of this appeal. See TEX. R. APP. P. 38.1(g).
2
including Doctors Hospital at Renaissance—“as directed” by the
Practice and “in accordance with [the Practice’s] protocols, policies and
procedures.”
Rebecca Lugo brought her minor daughter to the Hospital for
brain surgery. Dr. Burke performed the surgery, which left Lugo’s
daughter with permanent neurological damage. In the following weeks,
Dr. Burke expressed his belief that a retractor used during the
procedure migrated into the child’s brainstem, causing her injury.
Lugo filed suit individually and on behalf of her daughter,3
alleging that the retractor migrated because it was contacted either by
Dr. Burke, the surgical technician employed by the Hospital who was
assisting Dr. Burke, or a suction device or its tubing as the device was
handed to Dr. Burke by the technician. Lugo alleged Dr. Burke was
negligent in “[f]ailing [to] properly perform the surgery,” “[f]ailing to
properly place the retractor,” “[f]ailing to secure the retractor,” “[f]ailing
to monitor the location of the retractor during the surgery,” and
“[a]llowing the retractor to migrate.” In addition to Dr. Burke, Lugo
named the Hospital and the Practice as defendants, alleging that the
Practice was vicariously liable for Dr. Burke’s negligence and that the
Hospital was vicariously liable for the technician’s negligence.
The Practice filed a traditional motion for summary judgment,
arguing it could not be held vicariously liable for Dr. Burke’s negligence
as a matter of law because the Practice is prohibited from practicing
3 Although Lugo’s daughter is no longer a minor, the petition alleges
that she remains mentally incompetent and unable to pursue her individual
claims independently.
3
medicine, it did not control the manner in which Dr. Burke provided
medical care, and Dr. Burke was an independent contractor for purposes
of providing medical care. The trial court denied the motion in a
reasoned order, concluding Dr. Burke’s employment agreement granted
the Practice sufficient control over Dr. Burke to trigger vicarious
liability even though he retained the right to exercise independent
medical judgment while providing patient care. The order went on to
authorize a permissive interlocutory appeal of the ruling, concluding
that resolution of the vicarious liability question in the Practice’s favor
“would preclude the need for the Practice to participate in additional
discovery and a full trial on the merits.”
On appeal, the Practice argued it could not be vicariously liable
for Dr. Burke’s negligence because statutes governing NPHOs and the
practice of medicine in Texas deprive it of any right to control
Dr. Burke’s work.4 The court of appeals affirmed, holding that
Dr. Burke was an employee of the Practice under the traditional
common-law factors and this Court’s decisions, and that he was acting
in the course and scope of his employment when the alleged negligence
4 Although no party has raised the issue, our concurring colleagues
contend that the Practice did not adequately notify Lugo of this argument in
the trial court. Post at 2-3, 12-13 (Bland, J., concurring). To be sure, a motion
for summary judgment must stand or fall on the grounds expressly presented
in the motion itself. E.g., McConnell v. Southside Indep. Sch. Dist., 858 S.W.2d
337, 341 (Tex. 1993). But as just discussed, one of the grounds raised by the
Practice was that it did not control the manner in which Dr. Burke provided
medical care. We cannot say the court of appeals erred in treating the
Practice’s statutory argument as a subsidiary question fairly included within
this ground. See, e.g., Lee v. Rogers Agency, 517 S.W.3d 137, 164 (Tex. App.—
Texarkana 2016, pet. denied).
4
occurred. 672 S.W.3d 901, 906-915 (Tex. App.—Corpus Christi–
Edinburg 2023). The Practice then filed a petition for review, which we
granted.
ANALYSIS
The sole issue presented is whether an NPHO can be held
vicariously liable for the torts of its physician employees under ordinary
common-law rules, or whether statutes have altered the usual
application of those rules in whole or part by providing that: (1) only
individuals may be licensed to practice medicine, TEX. OCC. CODE
§ 155.001; (2) employed physicians “retain independent medical
judgment,” id. § 162.0023; and (3) NPHOs “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,” id. § 162.0021. As explained below, we have previously
held that the first two statutory provisions do not modify common-law
vicarious liability, and the Practice concedes that some vicarious
liability is available. But we conclude that the third change affects the
scope of such liability.
We begin by examining the statutes that enable the formation of
NPHOs against the backdrop of our historical prohibition on the
corporate practice of medicine. We then address the role of a physician’s
independent medical judgment in the vicarious liability analysis.
Finally, we examine the statutory limits on NPHO control over its
employee physicians.
5
I. Standard of review and applicable law
We review de novo the denial of a traditional motion for summary
judgment. Scripps NP Operating, LLC v. Carter, 573 S.W.3d 781, 790
(Tex. 2019). A defendant is entitled to summary judgment when it
conclusively negates at least one element of the plaintiff’s theory of
recovery. Centeq Realty, Inc. v. Siegler, 899 S.W.2d 195, 197 (Tex. 1995).
Here, the parties have stipulated that the Practice’s ground for
summary judgment presents purely a question of law and does not
require the resolution of any disputed questions of material fact.
The statutory backdrop for the Practice’s motion begins with the
Texas Medical Practice Act. The Act prohibits the practice of medicine
without a license, which may only be issued to a “person.” TEX. OCC.
CODE §§ 155.001-.002. To curb the unlicensed practice of medicine and
“prevent possible abuses resulting from lay control” of medical care in
Texas, corporations were historically prohibited from employing
physicians and receiving a fee for their services. Gupta v. E. Idaho
Tumor Inst., Inc., 140 S.W.3d 747, 752 (Tex. App.—Houston [14th Dist.]
2004, pet. denied) (citations omitted); see also St. Joseph Hosp. v. Wolff,
94 S.W.3d 513, 539 (Tex. 2002) (plurality op.). Instead, physicians
ordinarily provide medical care as independent contractors. Bodin v.
Vagshenian, 462 F.3d 481, 495 (5th Cir. 2006) (Owen, J., concurring);
see also Baptist Mem’l Hosp. Sys. v. Sampson, 969 S.W.2d 945, 950 (Tex.
1998).
In 1999, the Texas Legislature altered this landscape, allowing
certain types of health organizations to choose to employ physicians
without engaging in the unlicensed practice of medicine. One such
6
organization is the NPHO. TEX. OCC. CODE § 162.001. To qualify as an
NPHO, the entity must be a nonprofit corporation that is organized
solely by persons licensed by the Texas Medical Board for a qualifying
purpose—here, the delivery of health care—and is independently
certified by the Board. Id. § 162.001(b). An NPHO’s directors and
trustees must also be licensed by the Board and actively engaged in the
practice of medicine. Id.
Although 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,” id. § 162.0021, an
NPHO “shall adopt, maintain, and enforce policies to ensure that a
physician employed by the health organization exercises independent
medical judgment when providing care to patients,” id. § 162.0022(a),
and “must include policies relating to . . . quality assurance,” id.
§ 162.0022(b)(2). The statute goes on to codify the familiar principle
that an employee physician “retains independent medical judgment in
providing care to patients,” explicitly instructing that NPHOs “may not
discipline the physician for reasonably advocating for patient care.” Id.
§ 162.0023.
II. The licensing of individual physicians and their exercise
of independent medical judgment do not preclude
vicarious liability.
The Practice asks us to consider how this statutory scheme
interacts with the common law, under which a defendant is vicariously
liable for the torts of its employees committed within the course and
scope of their employment but not for the torts of independent
contractors. E.g., Baptist Mem’l Hosp., 969 S.W.2d at 947, 949. “The
7
test to determine whether a worker is an employee rather than an
independent contractor” is whether the entity “has the right to control
the progress, details, and methods of operations of the work.” Limestone
Prods. Distrib., Inc. v. McNamara, 71 S.W.3d 308, 312 (Tex. 2002).
Right of control “may be shown by explicit contractual assignment
or actual exercise of control,” Shell Oil Co. v. Khan, 138 S.W.3d 288, 292
(Tex. 2004), and the parties agree that only the former is at issue here.
We consider five factors to determine contractual right of control:
(1) the independent nature of the worker’s business; (2) the
worker’s obligation to furnish necessary tools, supplies,
and materials to perform the job; (3) the worker’s right to
control the progress of the work except about final results;
(4) the time for which the worker is employed; and (5) the
method of payment, whether by unit of time or by the job.
McNamara, 71 S.W.3d at 312.
Applying these factors, the court of appeals concluded that
Dr. Burke was an employee of the Practice, just as his contract says.
The Practice agreed to furnish him with all tools, supplies, and
materials necessary to perform his job, required him to provide medical
services to the Practice’s patients as directed and in accordance with the
Practice’s policies, required him to work at least forty hours each week,
paid him a regular salary, and retained discretion to change his practice
sites. 627 S.W.3d at 911.
The Practice argues that the above-described statutes
authorizing only individuals to practice medicine alter this conclusion.
But the practice of medicine is defined as “the diagnosis, treatment, or
offer to treat a mental or physical disease or disorder or a physical
deformity or injury by any system or method, or the attempt to effect
8
cures of those conditions, by a person,” TEX. OCC. CODE § 151.002(a)(13)
(emphasis added), which in this context generally “means an
individual,” id. § 151.002(a)(11). Thus, it is far from clear that a
corporation would itself be practicing medicine if it exercised a
contractual right to control an individual physician employee.5
Moreover, we have already considered and rejected the contention
that “because a corporation cannot be licensed to practice medicine in
Texas, incorporated [entities] cannot ‘direct the details of work’ of a
physician engaged in the practice of medicine” and thus “cannot be
vicariously liable as an employer for a physician’s malpractice” under
the common law. St. Joseph Hosp., 94 S.W.3d at 539. Adopting a
relevant section of the Restatement (Second) of Agency,6 we explained:
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. Regardless of
whether it was proper for [the physician] to be [the
5 Similarly, statutes governing penalties that may be imposed for the
illegal practice of medicine provide that “[a] person commits an offense if the
person practices medicine in this state in violation of [the Medical Practice
Act].” TEX. OCC. CODE § 165.152 (emphases added); see also id. § 164.001
(authorizing the Board to pursue disciplinary action against any person who
violates the Medical Practice Act); id. § 164.052 (listing instances when a
person applying for Board licensure commits a prohibited practice); id.
§ 165.153 (clarifying that a person practicing medicine without a license is
subject to additional criminal penalties when they cause another to suffer
physical, psychological, or financial harm).
6 “The fact that the state regulates the conduct of an employee through
the operation of statutes requiring licenses or specific acts to be done or not to
be done does not prevent the employer from having such control over the
employee as to constitute him a servant.” St. Joseph Hosp., 94 S.W.3d at 540
(quoting RESTATEMENT (SECOND) OF AGENCY § 220 cmt. i (AM. L. INST. 1958)).
9
corporation’s] employee, if he in fact was so when he
treated [the plaintiff], then as his employer [the
corporation] is vicariously liable for his actions.
Id. at 539-540.7
The Practice also argues that the court of appeals overlooked an
important term of Dr. Burke’s contract with the Practice, which provides
that Dr. Burke “shall retain the right to exercise [his] independent
medical judgment in providing Medical Services to patients.” In the
Practice’s view, this language precludes the right of control necessary
for vicarious liability.
We rejected a similar contention in Murk v. Scheele, holding that
a government hospital could be vicariously liable under the Texas Tort
Claims Act because the physician accused of malpractice was the
hospital’s employee under common-law rules. 120 S.W.3d 865, 867 (Tex.
2003). The hospital argued that the physician’s “exercise of independent
professional judgment as a treating physician was outside [the
hospital’s] right of control, thereby excluding him from the statutory
definition of ‘employee.’” Id. We disagreed, concluding that “a physician
whose practice is controlled by a governmental unit is not precluded
from being an ‘employee’ within the meaning of the Act simply because
7 See also Marino v. Lenoir, 526 S.W.3d 403, 409-410 (Tex. 2017) (“[W]e
construe statutory language against the backdrop of common law, assuming
the Legislature is familiar with common-law traditions and principles. [St.
Joseph Hosp. v.] Wolff explained that looking to control over the details of an
employee’s work is a longstanding common-law basis for establishing an
employer-employee relationship, and distinguishing an employee from an
independent contractor. . . . [St. Joseph Hosp. v.] Wolff, we think, looked to
which entity actually controlled the [physician] under the relevant contract.”
(footnote omitted)).
10
he or she must exercise some independent medical judgment.” Id.
“While the nature of his practice as a physician required him to make
many medical decisions using his own professional judgment, the
necessity for that judgment did not, by itself, vitiate [the hospital’s] right
to control the details of his practice.” Id. (citations omitted).
The Practice contends that Murk is unique to the Tort Claims Act
context. Not so. As we recently reiterated, the analysis of whether
someone is an “employee” under the Act’s definition tracks the common
law.8 Furthermore, we analyzed whether the physician was an
employee in Murk because the Tort Claims Act prevents both a
government employer and its employee from being held liable for the
same act. See 120 S.W.3d at 866-67; TEX. CIV. PRAC. & REM. CODE
§ 101.106. If an employer could not be held vicariously liable for its
employee physician’s negligence, as the Practice argues, then we should
not have dismissed the claims against the employee in Murk. We adhere
to Murk and St. Joseph Hospital, which foreclose these arguments made
by the Practice.9
8 Tex. Dep’t of Transp. v. Self, 690 S.W.3d 12, 20 (Tex. 2024) (noting that
the court of appeals “conducted the familiar employee-versus-independent-
contractor analysis that Texas courts have long used in [the Tort Claims Act]
and other legal contexts”); Marino, 526 S.W.3d at 409-410 (citing Court
precedent clarifying that the Act codifies the common law with respect to
employee status).
9 We note that the holdings of Murk and St. Joseph Hospital are
consistent with the Restatement (Third) of Torts: Medical Malpractice recently
given final approval by the American Law Institute. Section 15 of the
Restatement recognizes that “[a] medical . . . institution is vicariously liable
for the tortious conduct of its employee acting within the scope of employment”
and provides the familiar common-law definition of “employee” as “an agent
11
III. By limiting the control NPHOs can exercise over their
employee physicians, the statute narrows the scope of
their vicarious liability.
The Practice next argues that the Legislature partially stripped
NPHOs of the right of control necessary for vicarious liability under the
common law. In support of this argument, the Practice points out that
NPHOs “may not interfere with, control, or otherwise direct a
physician’s professional judgment in violation of this subchapter or any
other provision of law.” TEX. OCC. CODE § 162.0021. Because the
Legislature has prohibited NPHOs from exercising control over the full
scope of a physician’s employment, the Practice contends that a court
asked to hold an NPHO vicariously liable must analyze whether the
particular tasks that the physician employee negligently performed or
failed to perform are ones that the statute prohibits an NPHO from
controlling.
The Practice emphasizes that it is not contending NPHOs are
immune from liability altogether. For example, it notes that NPHOs
could still be liable for employees’ negligent medical care that they
actually take steps to control (even if such control violates the statute)
or for negligence by their ostensible agents, as well as liable for their
whose manner and means of work the [medical] institution controls or has the
right to control.” RESTATEMENT (THIRD) OF TORTS: MEDICAL MALPRACTICE
§ 15(a) (AM. L. INST. 2024). Regarding this right of control, comment d explains
that the expectation employee physicians will “exercise independent medical
judgment without being controlled by lay managers or entities . . . does not
mean . . . that vicarious liability doctrines . . . do not apply.” Id. § 15 cmt. d.
“Instead, respondeat superior applies to employed professionals, regardless of
the degree of professional autonomy a medical employee retains, by virtue of
the other elements of control that an employment relationship entails.” Id.
12
own negligence in hiring physicians or providing health care. But the
Practice observes that none of these types of liability are alleged here.
By contrast, Lugo argues that the terms of Dr. Burke’s
employment agreement granted the Practice a right of control sufficient
to impose vicarious liability and that, in any event, the Practice
exercised control over Dr. Burke’s employment because his medical care
was subject to the Practice’s protocols, policies, and procedures. Lugo
also points out that we have rejected a task-by-task assessment of
control as “an unworkable paradigm [for vicarious liability] that
conceivably could result in an individual shifting between employee and
independent contractor status countless times in a given work day.”
Painter v. Amerimex Drilling I, Ltd., 561 S.W.3d 125, 133 (Tex. 2018)
(internal quotation marks omitted).
We agree with the Practice in part. The statute does not expressly
preclude NPHO liability, as the Legislature did elsewhere in the same
chapter.10 And the statute gives NPHOs the right to “employ”
physicians—a concept with a settled common-law meaning that includes
vicarious employer liability. See SandRidge Energy, Inc. v. Barfield, 642
S.W.3d 560, 566 (Tex. 2022) (“Absent a textual contradiction, we may
conclude that the Legislature uses terms that have a developed meaning
at common law for the purpose of conveying a meaning consistent with
that which we historically afforded to it.” (internal quotation marks
omitted)).
10 For example, Section 162.157 provides that “[a] health care entity or
its designated credentials verification organization is immune from liability
arising from its reliance on data furnished by the board under this subchapter.”
TEX. OCC. CODE § 162.157.
13
Moreover, the Practice points out that it relies on the existence of
a “bona fide employment relationship” between itself and its physicians
to comply with federal anti-kickback laws. Federal statutes make it a
felony for organizations to pay any remuneration to induce a physician
to refer a patient for goods or services that may be paid for by a federal
healthcare program. See 42 U.S.C. § 1320a-7b(b)(2). But that felony
does not extend to “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.” Id.
§ 1320a-7b(b)(3)(B). The Practice’s position that it has this sort of
traditional employer–employee relationship with its physicians is in
tension with its broad request to be excused from vicarious liability for
the torts those physicians commit while they are providing “medical
care,” which would treat the physicians as independent contractors for
liability purposes.
On the other hand, we have repeatedly held that “the right to
control remains the supreme test for whether the master–servant
relationship exists and thus whether the rule of vicarious liability
applies.” St. Joseph Hosp., 94 S.W.3d at 542 (internal quotation marks
omitted); see also Waste Mgmt. of Tex., Inc. v. Stevenson, 622 S.W.3d 273,
287 n.1 (Tex. 2021) (Boyd, J., concurring) (collecting cases). And even
when it is settled that the requisite employer–employee relationship
exists, we have excepted a general employer from vicarious liability for
the torts committed by its employee who has become the borrowed
employee of another because the general employer no longer retains the
right to control the employee. St. Joseph Hosp., 94 S.W.3d at 537-38.
14
Imposing vicarious liability upon an NPHO for employee conduct it is
statutorily prohibited from controlling would be inconsistent with this
basic principle underlying of our vicarious-liability precedents.
This Court has previously recognized that statutory provisions
and considerations of industry structure can alter the usual
right-of-control inquiry in a manner that affects vicarious liability. For
example, although courts generally decide “whether a workers’
compensation insurance policy covers a worker’s injury by determining
whether the subscribing company is the worker’s employer under the
right-of-control test,” we held that the Staff Leasing Services Act
compels a different analysis with respect to leased workers. Tex.
Workers’ Comp. Ins. Fund v. DEL Indus., Inc., 35 S.W.3d 591, 595 (Tex.
2000). At the time, the Act provided that a staff leasing company
retained the right of direction and control over the leased employees and
granted it the exclusive right to elect or deny workers’ compensation
coverage for those employees. Id. at 594-95. Thus, we held the Act
“statutorily supersede[d] the common law right-of-control test in
determining employer status of leased employees for workers’
compensation coverage purposes,” making the leasing company their
employer. Id. at 595-96.
Likewise, we have modified the right-of-control inquiry for
industries that have a unique structure. In Exxon Corp. v. Tidwell, we
considered whether an oil company owed a duty to protect an employee
of its service station tenant from criminal acts by third parties. 867
S.W.2d 19, 20 (Tex. 1993). We observed that although a company would
traditionally owe a duty to a contractor’s employees if it had the right to
15
control the details of their work, “a hybrid body of law has developed
governing oil companies and their service station lessees.” Id. at 21.
Given this unique combination of agency and landlord–tenant law, we
held that “in a case alleging negligence in maintaining a safe workplace,
the court’s inquiry must focus on who had specific control over the safety
and security of the premises”—that is, over “the alleged security defects
that led to [the employee’s] injury”—rather than on the “traditional test
of right of control over general operations.” Id. at 23.
Here, the Legislature created NPHOs to serve as a unique
employment structure in the health care industry, and it statutorily
narrowed an NPHO’s right of control over its physician employees.
Section 162.001 of the Occupations Code enables the formation of
NPHOs organized and managed by licensed physicians, and it allows
NPHOs to choose to either contract with or employ physicians. TEX.
OCC. CODE § 162.001(b), (c). Yet even if an NPHO chooses to employ
physicians, as the Practice has here, it “may not interfere with, control,
or otherwise direct a physician’s professional judgment in violation of
this subchapter or any other provision of law,” id. § 162.0021, and this
prohibition “may not be voided or waived by contract.” Id. § 162.0024(a).
As in DEL Industries and Tidwell, we conclude that the unique
structure of NPHO employers and the statute’s restrictions on their
activities narrow the scope of their right of control and thus of their
vicarious liability. To determine when an NPHO can be held vicariously
liable for its physician employee’s negligent acts or omissions, then, we
must examine in detail the limits that the statute places on the NPHO’s
right of control.
16
The statute does not prevent NPHOs from controlling any
provision of “medical care,” as the Practice argues. Instead, it prohibits
NPHOs from “interfer[ing] with, control[ling], or otherwise direct[ing] a
physician’s professional judgment in violation of this subchapter or any
other provision of law, including board rules.” TEX. OCC. CODE
§ 162.0021 (emphasis added). Accordingly, we must look to other laws
and rules to determine precisely what sort of interference, direction, or
control is prohibited. See Pub. Util. Comm’n of Tex. v. Luminant Energy
Co., 691 S.W.3d 448, 460 (Tex. 2024) (explaining that statutory “text
must always be read ‘in context—not isolation’” (quoting State v.
Hollins, 620 S.W.3d 400, 407 (Tex. 2020))). This “[c]ontextual reading
yields the text’s ‘fair meaning,’ our interpretive North Star.” Kelley v.
Homminga, 706 S.W.3d 829, 832 (Tex. 2025) (quoting In re Dallas
County, 697 S.W.3d 142, 158 (Tex. 2024)).
The very next section of the subchapter sheds some light on the
scope of this prohibition, providing that an NPHO “shall 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 relating to” certain
subjects, such as “quality assurance.” TEX. OCC. CODE § 162.0022(a),
(b)(2). So long as the policies “reserve[] the sole authority to engage in
the practice of medicine to a physician,” the statute is not violated. Id.
§ 162.0022(d).
These provisions, when read together, do not bar NPHOs from
directing or controlling their physician employees in all aspects of their
medical practice. To the contrary, the statute mandates that NPHOs
17
have policies for their physicians to follow, and it requires those policies
to assure quality care and ensure that physicians exercise their
independent medical judgment. Nothing in the statute prohibits an
NPHO from having policies that facilitate rather than interfere with its
physician employees’ exercise of independent medical judgment in
providing quality care to the NPHO’s patients.11
The parties devote considerable attention to these statutory
provisions regarding policies.12 Although the provisions do help to
illustrate the scope of control that an NPHO may exercise, which is
relevant to vicarious liability, we emphasize that a claim based on an
NPHO’s alleged negligence in providing or failing to provide particular
policies allowed by statute would be one for direct rather than vicarious
11 Indeed, such policies are commonly used to ensure that physicians
have reliable knowledge readily at hand regarding the standard of care in
various circumstances so they can make an informed exercise of their
professional judgment. See, e.g., Bush v. Columbia Med. Ctr., No. 23-0460, ___
S.W.3d ___, slip op. at 18 (Tex. May 23, 2025) (“[P]olicies may guide or suggest
treatment paths without mandating them or running afoul of the prohibition
on the corporate practice of medicine.”); Marsillo v. Dunnick, 683 S.W.3d 387,
390 (Tex. 2024) (explaining that hospital’s snakebite treatment guidelines
facilitated comprehensive framework for treatment based on physician’s
assessment of patient’s symptoms); Fortner v. Hosp. of the Sw., LLP, 399
S.W.3d 373, 383-84 (Tex. App.—Dallas 2013, no pet.) (holding expert report
sufficiently opined that hospital breached standard of care by failing to have
or enforce certain policies and procedures); El Paso Healthcare Sys., Ltd. v.
Monsivais ex rel. Monsivais, No. 08-18-00043-CV, 2019 WL 5616973, at *6-7
(Tex. App.—El Paso Oct. 31, 2019, pet. denied) (noting hospital staff could be
held liable for injury caused by failure to adhere to “standing orders” or
“protocols”).
12Our discussion of policies in the remainder of this paragraph is
responsive to these arguments by the parties. Cf. post at 6 n.15 (Bland, J.,
concurring).
18
liability.13 As discussed above, the vicarious liability inquiry is whether
the particular tasks that the physician employee negligently performed
or failed to perform are ones that the statute prohibits an NPHO from
controlling. As we have seen, the statute generally defines the
uncontrollable sphere of tasks as the physician’s “exercise[] [of]
independent medical” or “professional judgment.” TEX. OCC. CODE
§§ 162.0021, .0022(a). Therefore, 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.14
Lugo correctly observes that we have rejected as “unworkable” a
general framework for vicarious liability that involves “isolating the
13 See, e.g., Bush, ___ S.W.3d at ___, slip op. at 23-28; Certified EMS,
Inc. v. Potts, 392 S.W.3d 625, 629 (Tex. 2013) (“[D]irect and vicarious liability
theories involve different sets of operative facts because the facts required to
establish the defendant’s vicarious liability, i.e., the acts of the agent and his
relationship to the principal, differ from the facts required to establish . . . the
defendant’s direct liability, i.e., its provision of particular policies and
procedures.” (cleaned up)). Thus, we agree with our concurring colleagues that
an NPHO may not be held vicariously liable for injuries caused by a negligent
physician due to inadequate NPHO policies. Post at 1, 7-9 (Bland, J.,
concurring). And we agree that any claim for direct liability would require
proof of causation. For example, a plaintiff could attempt to show that a
reasonable NPHO complying with the standard of care should have had
policies in place that, in reasonable medical probability, would have averted
an alleged negligent act or omission while respecting medical judgment. We
express no view regarding whether such a showing could be made in this case.
14 We thus disagree with our concurring colleagues that “[v]icarious
liability claims against [NPHOs] that allege a physician’s medical judgment
caused the patient’s injury . . . have no merit absent allegations of unlawful
interference.” Post at 1 (Bland, J., concurring).
19
task the worker was performing at the moment of the accident and
conducting an independent evaluation of the employer’s control with
respect to that particular task.” Painter, 561 S.W.3d at 133. These
concerns are well founded for traditional employer–employee
relationships in which, as in Painter, the employer “was in a position to
exert control” over its employee’s duties and “simply chose not to do so.”
Id. at 135.
Because the NPHO statute has modified this relationship,
however, courts asked to impose vicarious liability must determine
whether the NPHO could exercise control over the alleged negligence of
its physician employee without interfering with his or her independent
medical judgment. To aid courts in this inquiry, the parties can address,
for example, (1) whether the NPHO has a right of control regarding the
allegedly negligent acts or omissions of its physician employee that led
to the alleged injury,15 and, if so, (2) whether an exercise of such control
would interfere with the physician’s exercise of independent medical
judgment.16
15 See Tidwell, 867 S.W.2d at 23.As discussed in Part II, the relevant
inquiry is whether the NPHO had a right of control, which “may be shown by
explicit contractual assignment or actual exercise of control.” Shell Oil Co.,
138 S.W.3d at 292 (emphasis added).
16 TEX. OCC. CODE §§ 162.0021, .0022(a). The concurrence argues that
we are improperly expanding an NPHO’s summary judgment burden by
requiring it to prove that exercising control over the allegedly negligent acts or
omissions of its physician employee would have interfered with his or her
exercise of independent medical judgment. Post at 11-12 (Bland, J.,
concurring). To the contrary, this requirement tracks the statutory provisions
just cited.
20
As in other cases, the usual procedural vehicles for resolving this
vicarious-liability question will apply. For example, at trial or in
response to an NPHO defendant’s motion for summary judgment,17 a
plaintiff may seek to show that the NPHO had a right of control over the
physician employee’s allegedly negligent act or omission that caused the
injury by offering evidence of the employee’s contract with the NPHO
and relevant NPHO policies. A defendant NPHO, in turn, may seek to
negate such evidence affirmatively. Or it may seek to establish why, as
a matter of law, the NPHO lacked any relevant right of control or that
any control the NPHO could lawfully exercise had nothing to do with the
alleged injury. The NPHO may likewise show that any such right of
control would have intruded on the physician’s medical judgment, so
that even if vicarious liability may have been authorized absent the
statute, it is now impermissible to impose. An NPHO that establishes
as a matter of law that the injury’s cause truly was an exercise of
independent medical judgment, as may often be the case, would be
entitled to summary judgment. And in cases where a right to control is
both demonstrable and would not interfere with a physician’s medical
judgment, vicarious liability remains available.18 The bottom line is
that although this Court has disclaimed a “task by task” approach to
vicarious liability, the Legislature’s modification of that principle for
17We address the distinction between traditional and no-evidence
motions below. See infra note 19.
18 The record and briefs in this case tell us little to nothing about the
administrative realities of NPHO practice, so we are not yet in a position to
make broader statements about litigation in this context.
21
NPHOs can be readily accommodated within our existing pleading
practice and should not impose an onerous burden on either party.
IV. The Practice has not established its entitlement to
traditional summary judgment under the statutory
standard.
Having explained the statutory limits on an NPHO’s right of
control and thus its vicarious liability, we turn to whether the Practice
conclusively proved its entitlement to traditional summary judgment
under this standard such that it cannot be held vicariously liable for
Dr. Burke’s alleged negligence.19 Lugo agrees with the court of appeals
that the Employment Agreement between the Practice and Dr. Burke
assigned the Practice a right of control sufficient to trigger vicarious
liability for all of Dr. Burke’s torts within the course and scope of his
employment. The Practice disagrees, pointing to a provision of the
agreement stating that Dr. Burke “shall retain the right to exercise [his]
independent medical judgment in providing Medical Services to
patients.” Further, the Practice contends that any right of control it
could have was stripped by the agreement’s provision that Texas law
governs, as our law prohibits the corporate practice of medicine.
We agree in part with the court of appeals’ view of the agreement,
which provides that Dr. Burke will render medical services to the
19Although a plaintiff would have the burden at trial to show the
defendant’s vicarious liability, the defendant Practice filed a traditional motion
for summary judgment arguing that it was not vicariously liable as a matter
of law. Thus, it was the Practice’s burden to conclusively disprove an essential
element of vicarious liability. See Draughon v. Johnson, 631 S.W.3d 81, 87-88
(Tex. 2021); Lear Siegler, Inc. v. Perez, 819 S.W.2d 470, 471 (Tex. 1991).
22
Practice’s patients “as directed” and “in accordance with the [Practice’s]
protocols, policies and procedures.” But the agreement is not the end of
the analysis, as the statute provides its “requirements . . . may not be
voided or waived by contract.” TEX. OCC. CODE § 162.0024(a). Thus, as
explained above, we must also consider whether the Practice showed
that it could not exercise control regarding Dr. Burke’s alleged
negligence without interfering with his exercise of independent medical
judgment. See id. §§ 162.0021, .0022(a).20
The Practice did not have the benefit of our explanation of the
standard for vicarious liability under this statute when it filed its
motion. Instead, it moved for summary judgment based solely on legal
grounds, stipulating that its motion did not require resolving any
genuine issues of material fact. The Practice’s legal position is that the
statute entirely prevents NPHOs from controlling physicians’ provision
of medical care, and thus the Practice cannot be held vicariously liable.
As explained above, however, the statute does not preclude an
NPHO from exercising contractual rights to control its physician
employees so long as that control does not interfere with the physicians’
exercise of independent medical judgment. Given the purely legal focus
of the Practice’s motion, it is not surprising that the record does not
20 Lugo alleged that the Practice employed Dr. Burke and is vicariously
liable for his negligence. She thus put the Practice’s right to control
Dr. Burke’s conduct in issue. To obtain traditional summary judgment, then,
the Practice had the burden to prove conclusively that an exercise of control
over the alleged negligence would interfere with his exercise of independent
medical judgment. This burden does not require the Practice to negate
unpleaded claims or allegations, as the concurrence asserts. See post at 14
(Bland, J., concurring).
23
address whether the Practice would necessarily have interfered with the
exercise of Dr. Burke’s independent medical judgment by exercising a
right to control regarding the type of negligence alleged here.21 Thus,
we conclude the trial court did not err in denying the Practice’s motion
for summary judgment that it is not subject to vicarious liability. On
remand, the Practice is free to file a new motion for summary judgment
with the benefit of our explanation of the legal standard for vicarious
liability under this statutory scheme.
CONCLUSION
We hold the trial court properly denied the Practice’s motion for
summary judgment. Because that is also the result reached by the court
of appeals, we affirm that court’s judgment and remand the cause to the
trial court for further proceedings.
J. Brett Busby
Justice
OPINION DELIVERED: May 23, 2025
21 We disagree with the concurrence’s suggestion that Lugo limited her
petition by alleging that each instance of negligence leading to her daughter’s
injuries resulted from Dr. Burke’s exercise of medical judgment. Cf. post at
12-13 (Bland, J., concurring). Instead, Lugo alleged several failures to act,
including failures to secure and monitor the location of a retractor. Whether
Dr. Burke failed in any of the alleged respects and whether any such failures
were exercises of independent medical judgment are matters beyond the scope
of the purely legal motion the Practice filed, and they remain to be considered
on remand.
24