Provided By William Frost, MBA, SBCS, President of MedInsure Group, LLC

As seen in St. Louis Metropolitan Medicine Magazine

Besides being healers and caretakers, doctors are also business owners, putting them at risk for additional lawsuits and claims. There are many assets at stake when a physician faces a medical malpractice lawsuit, and it’s not just the assets related to the medical practice that can be vulnerable. Even if there is a settlement out of court, a doctor’s reputation, medical record and credentials could all be tarnished in the process.

The implementation of the Affordable Care Act has led to speculation about the broader impact on medical malpractice claims. A 2014 study by the RAND Corporation theorizes a rise of up to 5% in malpractice claims (1). The theory is based on an assumed increase in procedures and patient interactions from a higher percentage of the population being insured. Consequently, higher medical professional liability insurance premiums may be expected. Certain factors could have a broader impact on the risk profiles of physicians.

Standards Are Changing

A primary concern for physicians is that the quality and standard measures of the ACA could cause a shift in how “standard of care” is evaluated in the courtroom. The fear is that plaintiff attorneys could use these approved guidelines from specialty boards as “rules” for the standard of practice and patient safety. This would essentially allow operational guidelines to take precedence over proven clinical research.

Medical Professional Liability Insurance

Just as healthcare has undergone reform, some entities such as the Center for American Progress have suggested that a reform of medical malpractice law is necessary as well (2). One potential solution would be a safe harbor for physicians with legally-defined criteria for standard of care. Patients who bring malpractice claims must show evidence that their physician did not follow guidelines and meet the standard of care when diagnosing or treating their specific conditions. The ability to show documented proof that the physician did indeed adhere to established guidelines and upheld the standard of care is an effective means for defending such claims in the early stages of litigation.

Physicians can document their adherence to clinical guidelines by using a qualified health information technology system. Research published by the Archives of Internal Medicine suggests that adoption of Electronic Health Records could lead to a reduction in malpractice claims (3). EHRs allow for more effective communication between healthcare providers and cuts down on the delay in receiving patient information. Also, the documentation provided by EHRs could improve the chances of a successful defense in the earliest stages of a malpractice lawsuit.

Preparing a Defense

Statistics indicate that the majority of physicians will be sued for medical malpractice at some point in their career. In fact, a study published by the New England Journal of Medicine found that 99% of physicians in high-risk specialties will be sued by the age of 65 (4). However, there are some pro-active steps that can be taken when facing this ordeal.

Insurance carriers generally require to be notified at the first hint of trouble if there’s reason to suspect that a patient is considering a lawsuit. The insurer usually assigns a claims representative to investigate the claim, gather information and act as a guide through the litigation process. To maximize the defensibility of a malpractice claim, thorough records should be maintained and organized. Missing records and poor documentation in general could harm the chances of a successful defense.

Further, physicians should be cognizant of their rights when determining whether a settlement can be reached. In most cases, carriers won’t settle a claim without the doctor’s consent. However, some policies have a “hammer clause” that allows the carrier to assert pressure on their insured on whether a case should be settled. Even if the medical facts were on the doctor’s side, a settled claim can show up in a physician’s professional history, affecting their professional reputation and potentially increasing their future risk of similar claims. Having a consent-to-settle clause in a medical professional liability insurance policy may allow a physician to retain a higher degree of authority in this critical decision, and maintaining confidentiality in the terms of any settlement can eliminate or limit the impact of a claim on potential future claims.

Advisory Services offered through Larson Financial Group, LLC, a Registered Investment Advisor. Securities offered through Larson Financial Securities, LLC, Member FINRA/SIPC. Medical Malpractice Insurance offered through Larson Financial Brokerage, LLC Medical Malpractice Insurance is a complicated issue and cannot be fully covered within the context of this article. This article should not be construed as legal advice. Please contact a qualified attorney and/or insurance carrier with knowledge about your specific needs.

Larson Financial Group, LLC, Larson Financial Securities, LLC and their representatives do not provide legal advice or services. Please consult the appropriate professional regarding your legal needs.

(1)http://www.rand.org/pubs/research_reports/RR493.html (2) http://www.americanprogress.org/issues/healthcare/report/2013/06/11/65941/reducing-the-cost-of-defensive-medicine/ (3) http://archinte.jamanetwork.com/article.aspx?articleid=1203517 (4) http://www.nejm.org/doi/full/10.1056/NEJMsa1012370