Among them, these participating physicians agree to form a risk pool arrangement and to share the surplus and deficits of the risk pool. Arguably, even though physician A does not enter into a written partnership agreement with physician B, they each agreed through their agent, the PHO, to the terms of a partnership. The risk pool formula for distribution of surplus and contribution for deficits involves the sharing of profits and losses. Courts have imputed the existence of a partnership on far thinner sets of facts than detailed managed care contracts. Once a partnership has been established either expressly or by implication, legal partners may be held jointly and severally liable for the obligations of the partnership.
Joint liability means that all partners are liable for the all obligations of the partnership.
Several liability means that each partner is completely liable for the obligations of the partnership. Depending upon whom a judgment creditor chose to pursue to collect a debt of the partnership, an individual physician could be held accountable for the entire obligation of a risk pool arrangement. The simple existence of a risk arrangement with risk pools does not consign participating physicians to a partnership and its legal risks. Quite commonly, the same managed care contract that creates the risk pool will have some safeguards built into it. For example, the contract may state that the parties are independent contractors with no intention of becoming partners.