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The Power of “Sorry”
Like many people, we like to sing while secure in the anonymity of our cars. This morning, one of us was wailing along with Elton John as he sang “Sorry Seems to Be the Hardest Word”:
It’s sad, so sad
Why can’t we talk it over
Oh, it seems to me
That sorry seems to be the hardest word.
That verse frames a critical legal question physicians regularly encounter: how to communicate with patients after an unexpected outcome. More precisely, should a physician apologize to a patient who suffers complications because of that physician’s treatment?
Traditionally, after a patient suffered a complication, defense lawyers were reluctant to allow the physician to express apologies or regret. The defense lawyer feared the apology would be treated as an “admission against interest.” In other words, the defense lawyer wanted to prevent a plaintiff’s lawyer from someday arguing that the physician’s apology was an admission of negligence or wrongdoing.
But the lawyer’s strategy fails. The patient wants the physician to apologize for an error. In fact, the patient distrusts a physician who does not admit errors.
‘‘Although a physician may wish to tell a patient when he has made a mistake, lawyers often order doctors to say nothing,’’ wrote University of Florida law professor Jonathan R. Cohen in the Southern California Law Review.1 “The physician’s silence may then trigger the patient’s anger. This alienation may then prompt the patient to sue.”
These observations are consistent with studies demonstrating that patients are far less to sue when provided with a full explanation and apology.2
Certainly no physician wants to make a statement that a plaintiff’s lawyer will use against him in court. But the same physician rationally wants to take any steps that might prevent the patient from feeling as though he or she needs to consult with a plaintiff’s lawyer. So, what’s a physician to do when caught between the hospital’s lawsuit-fearing attorney and a patient who expects his doctor to communicate with her honestly and forthrightly?
Fortunately, several state legislatures have recognized this tension and passed legislation that encourages physicians to apologize without facing the prospect that a plaintiff’s lawyer will argue that the physician apologized only because he knew he did something wrong. An example best illustrates how such “I’m sorry” statutes work.
Dr. Smith is treating a 22-year-old patient, John Elway, for a fractured fibula. Dr. Smith sees no signs of neurological compromise while the patient is in a cast. After the cast is removed, it appears the patient has lost function in the leg because the cast was too tight. The patient was a star college athlete who was expected to be drafted into the NFL, but now likely won’t be drafted. Dr. Smith tells the patient: “It’s my fault this happened. I’m really sorry that I didn’t pick up on this sooner.”
Does Dr. Smith’s statement come into evidence in court? Does part of it? The answers probably depend upon which state’s apology statute is applied. Massachusetts was one of the first states to pass an apology statute. It reads:
Statements, writings, or benevolent gestures expressing sympathy or a general sense of benevolence relating to the pain, suffering or death of a person involved in an accident and made to the person or to the family of such a person shall be inadmissible as evidence of an admission of liability in a civil action.
Significantly, the Massachusetts statute applies to people “involved in an accident,” which might imply that it is limited to automobile accidents or workplace accidents. The Massachusetts statute prevents this limited construction by providing a broad definition of “accident,” including any “occurrence resulting in injury or death to one or more persons which is not the result of a willful action by a party.” This definition would encompass ordinary medical negligence.
It would seem clear that the statute would protect Dr. Smith if he simply stated: “I want you to know how sorry I am this happened. I feel awful that you experienced this complication.”
But if Dr. Smith said, “It’s my fault this happened,” would the Massachusetts statute protect Dr. Smith? That’s a much harder call. Saying “It’s my fault” is technically not an expression of “sympathy or a general act of benevolence.” There no clear answer under Massachusetts law. But we believe the result would probably depend on whether the judge hearing the case thought this statement occurred during an overall act of apology.
The answer is clearer in California. That state’s apology statute reads:
The portion of statements, writings, or benevolent gestures expressing sympathy or a general sense of benevolence relating to the pain, suffering or death of a person involved in an accident and made to that person or to the family of that person shall be inadmissible as evidence of an admission of liability in a civil action. A statement of fault, however, which is part of, or in addition to, any of the above shall not be inadmissible pursuant to this section.
California draws a clear distinction between “the portion of statements ... expressing sympathy or a general sense of benevolence” and “a statement of fault.”
In our scenario, the jury would almost certainly be able to hear Dr. Smith’s statement, “It’s my fault this happened.” Critics of California’s law believe it creates too narrow a window for physicians to believe that plaintiff’s lawyers will not use their apology against them in a lawsuit.3
While Dr. Smith’s statement is likely to come into evidence in California, it’s also clear the opposite would occur in Colorado. Colorado’s apology statute, which specifically applies to medical malpractice actions, reads:
In any civil action brought by an alleged victim of an unanticipated outcome of medical care ... any and all statements … expressing apology, fault, sympathy, commiseration, condolence, compassion or a general sense of benevolence ... shall be inadmissible as evidence of an admission of liability or as evidence of an admission against interest.
Because Colorado’s statute specifically renders statements of “fault” inadmissible, a jury would not be able to consider any of Dr. Smith’s statements made during the course of his apology. Colorado’s law provides the physician with the most protection. Critics of Colorado’s law believe it’s unfair for physicians to admit fault to their patients in the hospital, then deny liability after the patient files a lawsuit.
Twenty-six other states have passed apology statutes; each works a bit differently. The choice of words matters. Legally, there is a big difference between a physician telling a patient, “I’m sorry about your pain” or saying, “It’s my fault you’re in pain.”
While apologies are valuable and important in relationships of trust—including the relationship between physicians and patients—we suggest you consult an experienced lawyer when crafting an apology to make sure it conveys your sympathies without opening a door to liability. TH
Patrick O’Rourke works in the Office of University Counsel, Department of Litigation, Denver.
References
- Cohen JR. Advising clients to apologize. Southern California Law Review. 1999;72:1009-1131.
- Hickson GB, Clayton EW, Githens PB, et al. Factors that prompted families to file medical malpractice claims following perinatal injuries. JAMA. 1992 Mar;267(10):1359-1363.
- Eisenberg D. When doctors say, “We’re sorry.” Time. 2005 Aug 15;166(7):50-52.
Like many people, we like to sing while secure in the anonymity of our cars. This morning, one of us was wailing along with Elton John as he sang “Sorry Seems to Be the Hardest Word”:
It’s sad, so sad
Why can’t we talk it over
Oh, it seems to me
That sorry seems to be the hardest word.
That verse frames a critical legal question physicians regularly encounter: how to communicate with patients after an unexpected outcome. More precisely, should a physician apologize to a patient who suffers complications because of that physician’s treatment?
Traditionally, after a patient suffered a complication, defense lawyers were reluctant to allow the physician to express apologies or regret. The defense lawyer feared the apology would be treated as an “admission against interest.” In other words, the defense lawyer wanted to prevent a plaintiff’s lawyer from someday arguing that the physician’s apology was an admission of negligence or wrongdoing.
But the lawyer’s strategy fails. The patient wants the physician to apologize for an error. In fact, the patient distrusts a physician who does not admit errors.
‘‘Although a physician may wish to tell a patient when he has made a mistake, lawyers often order doctors to say nothing,’’ wrote University of Florida law professor Jonathan R. Cohen in the Southern California Law Review.1 “The physician’s silence may then trigger the patient’s anger. This alienation may then prompt the patient to sue.”
These observations are consistent with studies demonstrating that patients are far less to sue when provided with a full explanation and apology.2
Certainly no physician wants to make a statement that a plaintiff’s lawyer will use against him in court. But the same physician rationally wants to take any steps that might prevent the patient from feeling as though he or she needs to consult with a plaintiff’s lawyer. So, what’s a physician to do when caught between the hospital’s lawsuit-fearing attorney and a patient who expects his doctor to communicate with her honestly and forthrightly?
Fortunately, several state legislatures have recognized this tension and passed legislation that encourages physicians to apologize without facing the prospect that a plaintiff’s lawyer will argue that the physician apologized only because he knew he did something wrong. An example best illustrates how such “I’m sorry” statutes work.
Dr. Smith is treating a 22-year-old patient, John Elway, for a fractured fibula. Dr. Smith sees no signs of neurological compromise while the patient is in a cast. After the cast is removed, it appears the patient has lost function in the leg because the cast was too tight. The patient was a star college athlete who was expected to be drafted into the NFL, but now likely won’t be drafted. Dr. Smith tells the patient: “It’s my fault this happened. I’m really sorry that I didn’t pick up on this sooner.”
Does Dr. Smith’s statement come into evidence in court? Does part of it? The answers probably depend upon which state’s apology statute is applied. Massachusetts was one of the first states to pass an apology statute. It reads:
Statements, writings, or benevolent gestures expressing sympathy or a general sense of benevolence relating to the pain, suffering or death of a person involved in an accident and made to the person or to the family of such a person shall be inadmissible as evidence of an admission of liability in a civil action.
Significantly, the Massachusetts statute applies to people “involved in an accident,” which might imply that it is limited to automobile accidents or workplace accidents. The Massachusetts statute prevents this limited construction by providing a broad definition of “accident,” including any “occurrence resulting in injury or death to one or more persons which is not the result of a willful action by a party.” This definition would encompass ordinary medical negligence.
It would seem clear that the statute would protect Dr. Smith if he simply stated: “I want you to know how sorry I am this happened. I feel awful that you experienced this complication.”
But if Dr. Smith said, “It’s my fault this happened,” would the Massachusetts statute protect Dr. Smith? That’s a much harder call. Saying “It’s my fault” is technically not an expression of “sympathy or a general act of benevolence.” There no clear answer under Massachusetts law. But we believe the result would probably depend on whether the judge hearing the case thought this statement occurred during an overall act of apology.
The answer is clearer in California. That state’s apology statute reads:
The portion of statements, writings, or benevolent gestures expressing sympathy or a general sense of benevolence relating to the pain, suffering or death of a person involved in an accident and made to that person or to the family of that person shall be inadmissible as evidence of an admission of liability in a civil action. A statement of fault, however, which is part of, or in addition to, any of the above shall not be inadmissible pursuant to this section.
California draws a clear distinction between “the portion of statements ... expressing sympathy or a general sense of benevolence” and “a statement of fault.”
In our scenario, the jury would almost certainly be able to hear Dr. Smith’s statement, “It’s my fault this happened.” Critics of California’s law believe it creates too narrow a window for physicians to believe that plaintiff’s lawyers will not use their apology against them in a lawsuit.3
While Dr. Smith’s statement is likely to come into evidence in California, it’s also clear the opposite would occur in Colorado. Colorado’s apology statute, which specifically applies to medical malpractice actions, reads:
In any civil action brought by an alleged victim of an unanticipated outcome of medical care ... any and all statements … expressing apology, fault, sympathy, commiseration, condolence, compassion or a general sense of benevolence ... shall be inadmissible as evidence of an admission of liability or as evidence of an admission against interest.
Because Colorado’s statute specifically renders statements of “fault” inadmissible, a jury would not be able to consider any of Dr. Smith’s statements made during the course of his apology. Colorado’s law provides the physician with the most protection. Critics of Colorado’s law believe it’s unfair for physicians to admit fault to their patients in the hospital, then deny liability after the patient files a lawsuit.
Twenty-six other states have passed apology statutes; each works a bit differently. The choice of words matters. Legally, there is a big difference between a physician telling a patient, “I’m sorry about your pain” or saying, “It’s my fault you’re in pain.”
While apologies are valuable and important in relationships of trust—including the relationship between physicians and patients—we suggest you consult an experienced lawyer when crafting an apology to make sure it conveys your sympathies without opening a door to liability. TH
Patrick O’Rourke works in the Office of University Counsel, Department of Litigation, Denver.
References
- Cohen JR. Advising clients to apologize. Southern California Law Review. 1999;72:1009-1131.
- Hickson GB, Clayton EW, Githens PB, et al. Factors that prompted families to file medical malpractice claims following perinatal injuries. JAMA. 1992 Mar;267(10):1359-1363.
- Eisenberg D. When doctors say, “We’re sorry.” Time. 2005 Aug 15;166(7):50-52.
Like many people, we like to sing while secure in the anonymity of our cars. This morning, one of us was wailing along with Elton John as he sang “Sorry Seems to Be the Hardest Word”:
It’s sad, so sad
Why can’t we talk it over
Oh, it seems to me
That sorry seems to be the hardest word.
That verse frames a critical legal question physicians regularly encounter: how to communicate with patients after an unexpected outcome. More precisely, should a physician apologize to a patient who suffers complications because of that physician’s treatment?
Traditionally, after a patient suffered a complication, defense lawyers were reluctant to allow the physician to express apologies or regret. The defense lawyer feared the apology would be treated as an “admission against interest.” In other words, the defense lawyer wanted to prevent a plaintiff’s lawyer from someday arguing that the physician’s apology was an admission of negligence or wrongdoing.
But the lawyer’s strategy fails. The patient wants the physician to apologize for an error. In fact, the patient distrusts a physician who does not admit errors.
‘‘Although a physician may wish to tell a patient when he has made a mistake, lawyers often order doctors to say nothing,’’ wrote University of Florida law professor Jonathan R. Cohen in the Southern California Law Review.1 “The physician’s silence may then trigger the patient’s anger. This alienation may then prompt the patient to sue.”
These observations are consistent with studies demonstrating that patients are far less to sue when provided with a full explanation and apology.2
Certainly no physician wants to make a statement that a plaintiff’s lawyer will use against him in court. But the same physician rationally wants to take any steps that might prevent the patient from feeling as though he or she needs to consult with a plaintiff’s lawyer. So, what’s a physician to do when caught between the hospital’s lawsuit-fearing attorney and a patient who expects his doctor to communicate with her honestly and forthrightly?
Fortunately, several state legislatures have recognized this tension and passed legislation that encourages physicians to apologize without facing the prospect that a plaintiff’s lawyer will argue that the physician apologized only because he knew he did something wrong. An example best illustrates how such “I’m sorry” statutes work.
Dr. Smith is treating a 22-year-old patient, John Elway, for a fractured fibula. Dr. Smith sees no signs of neurological compromise while the patient is in a cast. After the cast is removed, it appears the patient has lost function in the leg because the cast was too tight. The patient was a star college athlete who was expected to be drafted into the NFL, but now likely won’t be drafted. Dr. Smith tells the patient: “It’s my fault this happened. I’m really sorry that I didn’t pick up on this sooner.”
Does Dr. Smith’s statement come into evidence in court? Does part of it? The answers probably depend upon which state’s apology statute is applied. Massachusetts was one of the first states to pass an apology statute. It reads:
Statements, writings, or benevolent gestures expressing sympathy or a general sense of benevolence relating to the pain, suffering or death of a person involved in an accident and made to the person or to the family of such a person shall be inadmissible as evidence of an admission of liability in a civil action.
Significantly, the Massachusetts statute applies to people “involved in an accident,” which might imply that it is limited to automobile accidents or workplace accidents. The Massachusetts statute prevents this limited construction by providing a broad definition of “accident,” including any “occurrence resulting in injury or death to one or more persons which is not the result of a willful action by a party.” This definition would encompass ordinary medical negligence.
It would seem clear that the statute would protect Dr. Smith if he simply stated: “I want you to know how sorry I am this happened. I feel awful that you experienced this complication.”
But if Dr. Smith said, “It’s my fault this happened,” would the Massachusetts statute protect Dr. Smith? That’s a much harder call. Saying “It’s my fault” is technically not an expression of “sympathy or a general act of benevolence.” There no clear answer under Massachusetts law. But we believe the result would probably depend on whether the judge hearing the case thought this statement occurred during an overall act of apology.
The answer is clearer in California. That state’s apology statute reads:
The portion of statements, writings, or benevolent gestures expressing sympathy or a general sense of benevolence relating to the pain, suffering or death of a person involved in an accident and made to that person or to the family of that person shall be inadmissible as evidence of an admission of liability in a civil action. A statement of fault, however, which is part of, or in addition to, any of the above shall not be inadmissible pursuant to this section.
California draws a clear distinction between “the portion of statements ... expressing sympathy or a general sense of benevolence” and “a statement of fault.”
In our scenario, the jury would almost certainly be able to hear Dr. Smith’s statement, “It’s my fault this happened.” Critics of California’s law believe it creates too narrow a window for physicians to believe that plaintiff’s lawyers will not use their apology against them in a lawsuit.3
While Dr. Smith’s statement is likely to come into evidence in California, it’s also clear the opposite would occur in Colorado. Colorado’s apology statute, which specifically applies to medical malpractice actions, reads:
In any civil action brought by an alleged victim of an unanticipated outcome of medical care ... any and all statements … expressing apology, fault, sympathy, commiseration, condolence, compassion or a general sense of benevolence ... shall be inadmissible as evidence of an admission of liability or as evidence of an admission against interest.
Because Colorado’s statute specifically renders statements of “fault” inadmissible, a jury would not be able to consider any of Dr. Smith’s statements made during the course of his apology. Colorado’s law provides the physician with the most protection. Critics of Colorado’s law believe it’s unfair for physicians to admit fault to their patients in the hospital, then deny liability after the patient files a lawsuit.
Twenty-six other states have passed apology statutes; each works a bit differently. The choice of words matters. Legally, there is a big difference between a physician telling a patient, “I’m sorry about your pain” or saying, “It’s my fault you’re in pain.”
While apologies are valuable and important in relationships of trust—including the relationship between physicians and patients—we suggest you consult an experienced lawyer when crafting an apology to make sure it conveys your sympathies without opening a door to liability. TH
Patrick O’Rourke works in the Office of University Counsel, Department of Litigation, Denver.
References
- Cohen JR. Advising clients to apologize. Southern California Law Review. 1999;72:1009-1131.
- Hickson GB, Clayton EW, Githens PB, et al. Factors that prompted families to file medical malpractice claims following perinatal injuries. JAMA. 1992 Mar;267(10):1359-1363.
- Eisenberg D. When doctors say, “We’re sorry.” Time. 2005 Aug 15;166(7):50-52.
How to Stay Out of Litigation
We’ve defended physicians involved in lawsuits for more than a decade. After representing dozens of physicians, nurses, and other healthcare professionals, we can say one thing for certain: No one likes to get sued.
Good physicians struggle with the litigation process. Even when their care has been absolutely appropriate, many doctors experience great anxiety when they are accused of having negligently injured a patient. Because they have trained so hard to gain their expertise, many of our clients have found that a lawsuit strikes at them personally as well as professionally. At the end of the day, lawsuits cause stress, take physicians away from their personal lives, and often lead to serious financial and professional consequences.
Therefore, one of the questions that we most often receive is, “How can a physician avoid lawsuits?”
Top 10 Ways to Stay Out of Litigation
1) Good documentation: Often, in a lawsuit, plaintiffs’ attorneys will tell the jury the old adage, “If it’s not in the record, it didn’t happen.” What everyone who has practiced medicine knows, however, is that many things don’t make it to the chart. Physicians don’t have the time to recount their conversations with patients verbatim. What we want to see in the chart are the following:
- A description of the information provided by the patient that factored into your diagnoses or treatment decisions;
- A description of the physical findings or laboratory results that factored into your diagnoses and treatment decisions;
- A discussion of why you made a particular decision;
- A discussion of the course of treatment you selected; and
- A discussion of your anticipated follow-up.
Of these elements, we most often fail to see a discussion of why you made a particular decision, and this is a crucial piece of the record. As you know, physicians often have a broad range of treatment choices. Including information about why you selected a particular course of treatment—in light of the available data—makes the record more understandable to the jury. A good chart lays out more than just the physician’s actions. A good chart is so complete that another physician could assume care for the patient tomorrow, easily understanding both the course of treatment and why you chose it.
2) Good communication: In his book Blink, Malcolm Gladwell describes something defense lawyers have known for many years: That the quality of the care does not determine whether or not a physician gets sued. There are many instances in which a physician who makes a mistake that causes an injury manages to avoid litigation. There are also many instances in which a physician’s care is appropriate, but the patient sues the physician after a recognized complication. What makes the difference?
More often than not, the determining factor in whether or not a physician is sued is the patient’s perception of whether or not the physician cared about her. In situations in which patients leave the physician’s office believing that the physician listened carefully to their complaints, spent the time to explain the course of treatment, and genuinely cared about them as people, we don’t see as many lawsuits. If a physician explains why a complication occurred—not just that it occurred—and appears empathetic to the patient, she has less of a motivation to sue. Conversely, if the patient feels like the physician sees her as a commodity or didn’t take the time to understand her complaints, the risk of litigation goes up.
One of the most important aspects of good communication is adequate informed consent. Remember, informed consent is a dialogue—not a lecture. It requires physicians to discuss:
- The substantial risks of the treatment;
- The benefits of the treatment; and
- The alternatives to the treatment. Sometimes it’s difficult to determine the substantial risks because a patient and a physician may view the magnitude of a particular risk differently. Our rule of thumb is that any risks associated with serious long-term sequelae, such as permanent impairment, must be discussed, even if the probability of the risk occurring is remote.
3) Good consultation: Many hospitalists do not have long-term relationships with their patients. After a course of hospital treatment, the patient will return to her regular physician. A common breakdown occurs when the consultation between the hospitalist and the regular physician is inadequate.
On the front end, the hospitalist who receives a patient should take the opportunity, if possible, to consult with the regular physician about any ongoing course of treatment. Unfortunately, patients are not always accurate medical historians and may not fully appreciate their conditions or courses of treatment. Consulting with the regular physician helps to eliminate the possibility that an important aspect of the patient’s history or condition is overlooked.
On the back end, when the regular physician resumes care of the patient, he should be able to reinforce the course of hospital care and provide an additional layer of education about why the hospitalist made certain treatment decisions. Of course, the regular physician can serve in this role only if the hospitalist has taken the opportunity to inform the regular physician about the course of care.
4) Accurate representations: We are seeing more cases in which physicians are being sued for alleged misrepresentations to patients.
For example, each of you has probably seen an ad in which a Lasik provider advertises that the procedure is “20/20 or it’s free.” A patient may be able to allege that this advertisement is a guarantee that the procedure will result in 20/20 vision, but no medical provider should guarantee a successful outcome. Each human body reacts differently to treatment, and there is no physician who has not seen an unexpected outcome. Providing patients with unrealistic expectations about their outcomes can lead to lawsuits, even if a physician has obtained a signed informed consent detailing the risks involved.
The situation is even worse when the physician misrepresents his experience. We have defended cases in which physicians have told patients that they had performed a procedure hundreds of times, when that representation was not accurate. One of the greatest assets available to physicians in litigation is their advanced training and professional experience, but that asset becomes worthless if a physician gives the jury a reason to doubt his credibility. Once the jury believes that a physician has misrepresented his experience, he loses the ability to credibly explain his treatment decisions.
5) HMO-directed medicine: It’s no secret that many patients are dissatisfied with their managed care plans. In the abstract, patients understand that rising healthcare costs have caused insurers to limit care, but they are unwilling to view their own situations objectively. They believe that they are entitled to unlimited medical resources. When the HMO tells patients “no,” they have a tendency to transfer their frustrations to their physicians.
The coverage provided by the HMO is a contractual matter between the patient and the insurer. At the end of the day, the treating physician does not control the patient’s eligibility for certain types of care. What the treating physician cannot overlook, however, is that the physician-patient relationship is a personal one that exists independently of the insurance relationship. The standards of professional care require a physician to inform patients of all treatment options—even if the physician believes that the HMO is unlikely to authorize some of them. Ultimately, even if the cost of a treatment option would be prohibitive, a physician must remember that the patient has a right to be informed and to make her own decisions. Physicians should also be receptive to advocating on a patient’s behalf about the reasonableness or necessity of care.
6) Attend to the patient: Few things are harder to explain to a jury than a physician’s failure to personally attend to a patient. The reality is that physicians may receive information over the telephone or through an intermediary’s relay, and they often have to use these means of communication. The risk is that a physician will miss a detail that he would have seen if he had personally examined the patient.
Err on the side of caution. If your differential diagnosis includes a potentially serious condition and your ability to rule out that condition might be influenced by physical findings, arrange to see the patient in person. If the situation does not allow for a face-to-face appointment, instruct the patient to seek medical care through an emergency department or another provider.
Having been there, we can say that there is nothing more difficult for a physician than to have to admit, at deposition, “I wish I had seen the patient personally.”
7) Adequate discharge instructions: Another reality of modern medical practice is that patients often leave the hospital before their course of healing is complete. Patients may leave the hospital shortly after surgery or while still affected by an illness. Even when the treatment in the hospital has been appropriate, we regularly see cases arising from the physician’s discharge instructions. Patients allege that they did not receive enough information to allow them to recognize the onset of potentially serious complications. To prevent confusion, discharge instructions should address all areas of potential concern, including pain, wound care, and signs of infection. The instructions should also include information regarding whom to contact if questions arise and should instruct the patient to return if she experiences a change in condition.
8) Be prepared to deal with misinformation: Technology is wonderful. This morning, we typed the term “diabetes mellitus” into the Google search engine. It returned more than 7.3 million references. Within 30 seconds, we located the “final cure for diabetes,” which was compounded from banana, bitter melon, licorice extract, and cayenne pepper (among other things). While this might cure diabetes, we have our doubts; however, we will leave the debate to more scientific minds.
The problem is that sick people often become desperate people—particularly when fighting diseases like cancer, AIDS, and Alzheimer’s. They are likely to be vulnerable to misinformation and might be inclined to pursue courses of action that could actually harm them. Physicians must realize that they will regularly deal with patients who have unrealistic expectations of the medical system. The only way physicians can combat misinformation is by providing better information. Physicians need to be prepared to educate patients who have unsuccessfully tried to educate themselves. Part of that education can be verbal, but physicians should consider directing patients to reliable resources that they can explore after leaving the hospital.
Patients are also bombarded by advertisements for prescription medications, all of which are designed to persuade them to take an active role in requesting particular prescriptions. The problem is that the physician is responsible for selecting an appropriate medication. Physicians have to be able to explain why an advertised medication may not be the best choice under the circumstances, no matter what the TV commercial said.
9) Take responsibility: Everyone makes mistakes. No physician is perfect, nor is it fair to expect perfection from those who deal with the intricate machinery of the human body. A culture of fear, however, has caused many physicians to believe that they should not admit their mistakes. Our experience shows that recognizing and responding to mistakes is a far better course of action than trying to pretend they didn’t exist.
Taking responsibility doesn’t mean admitting that you were negligent. It does mean acknowledging a complication when it occurs and assisting the patient in minimizing the consequences. Sometimes this will result in transferring the patient to another physician. At other times, the physician may have to pay to correct the mistake. Many medical malpractice insurance carriers now have programs targeted at promptly recognizing and reacting to unexpected outcomes. These insurers realize that the best time to correct a bad situation is within hours or days of its occurrence. Enlist the help of your insurer or hospital risk manager. If patients feel like their physicians are trying to minimize a situation, hoping mistakenly that it will go away, it becomes much more difficult to avoid litigation.
10) Don’t compromise your integrity: Physicians are professionals. Whether it’s fair or not, jurors hold physicians to a higher standard of conduct. They expect more of doctors. They expect doctors to “do the right thing.” Consequently, jurors tend to punish physicians who place their personal interests above their patients’ interests. Federal law already prohibits physicians from engaging in many forms of self-dealing, such as investing in certain businesses or receiving kickbacks for medical care. But there are many lawful forms of conduct that might cause a jury to question why a physician chose a particular course of action.
Recent medical literature demonstrates that pharmaceutical manufacturers direct 90% of an estimated $21 billion annual marketing budget at physicians, including the sponsorship of an estimated 300,000 annual education events. This amounts to approximately $13,000 per physician annually. Because of concerns that even small inducements might have an unwanted effect upon physician independence, the Stanford Medical Center recently announced a new policy prohibiting physicians from accepting free drug samples or even small gifts from pharmaceutical sales representatives. Prominent newspapers have been running stories about the “free lunches” physicians receive.
We’re not suggesting that physicians spurn pharmaceutical sales representatives or that they avoid legal business opportunities. We caution you, however, that smart plaintiffs’ attorneys are sensitive to any indications that a physician has allowed his interests to influence a patient’s treatment. Don’t put yourself in a position where a jury could reasonably question whether or not you had your patient’s best interests in mind.
Unfortunately, even if a physician observes all of these precautions, a patient still might file a lawsuit. If you sense a real potential for litigation, contact your insurance company and provide notice of a potential claim. This will help ensure that your insurance coverage is available if a lawsuit is filed. It also allows the insurance company to retain an attorney to assist you. The next time we write, we’ll provide our top tips for winning a lawsuit once it occurs. TH
Patrick O’Rourke is the managing associate university counsel for the University of Colorado’s litigation office. Kari M. Hershey, JD, practices health law in Colorado.
We’ve defended physicians involved in lawsuits for more than a decade. After representing dozens of physicians, nurses, and other healthcare professionals, we can say one thing for certain: No one likes to get sued.
Good physicians struggle with the litigation process. Even when their care has been absolutely appropriate, many doctors experience great anxiety when they are accused of having negligently injured a patient. Because they have trained so hard to gain their expertise, many of our clients have found that a lawsuit strikes at them personally as well as professionally. At the end of the day, lawsuits cause stress, take physicians away from their personal lives, and often lead to serious financial and professional consequences.
Therefore, one of the questions that we most often receive is, “How can a physician avoid lawsuits?”
Top 10 Ways to Stay Out of Litigation
1) Good documentation: Often, in a lawsuit, plaintiffs’ attorneys will tell the jury the old adage, “If it’s not in the record, it didn’t happen.” What everyone who has practiced medicine knows, however, is that many things don’t make it to the chart. Physicians don’t have the time to recount their conversations with patients verbatim. What we want to see in the chart are the following:
- A description of the information provided by the patient that factored into your diagnoses or treatment decisions;
- A description of the physical findings or laboratory results that factored into your diagnoses and treatment decisions;
- A discussion of why you made a particular decision;
- A discussion of the course of treatment you selected; and
- A discussion of your anticipated follow-up.
Of these elements, we most often fail to see a discussion of why you made a particular decision, and this is a crucial piece of the record. As you know, physicians often have a broad range of treatment choices. Including information about why you selected a particular course of treatment—in light of the available data—makes the record more understandable to the jury. A good chart lays out more than just the physician’s actions. A good chart is so complete that another physician could assume care for the patient tomorrow, easily understanding both the course of treatment and why you chose it.
2) Good communication: In his book Blink, Malcolm Gladwell describes something defense lawyers have known for many years: That the quality of the care does not determine whether or not a physician gets sued. There are many instances in which a physician who makes a mistake that causes an injury manages to avoid litigation. There are also many instances in which a physician’s care is appropriate, but the patient sues the physician after a recognized complication. What makes the difference?
More often than not, the determining factor in whether or not a physician is sued is the patient’s perception of whether or not the physician cared about her. In situations in which patients leave the physician’s office believing that the physician listened carefully to their complaints, spent the time to explain the course of treatment, and genuinely cared about them as people, we don’t see as many lawsuits. If a physician explains why a complication occurred—not just that it occurred—and appears empathetic to the patient, she has less of a motivation to sue. Conversely, if the patient feels like the physician sees her as a commodity or didn’t take the time to understand her complaints, the risk of litigation goes up.
One of the most important aspects of good communication is adequate informed consent. Remember, informed consent is a dialogue—not a lecture. It requires physicians to discuss:
- The substantial risks of the treatment;
- The benefits of the treatment; and
- The alternatives to the treatment. Sometimes it’s difficult to determine the substantial risks because a patient and a physician may view the magnitude of a particular risk differently. Our rule of thumb is that any risks associated with serious long-term sequelae, such as permanent impairment, must be discussed, even if the probability of the risk occurring is remote.
3) Good consultation: Many hospitalists do not have long-term relationships with their patients. After a course of hospital treatment, the patient will return to her regular physician. A common breakdown occurs when the consultation between the hospitalist and the regular physician is inadequate.
On the front end, the hospitalist who receives a patient should take the opportunity, if possible, to consult with the regular physician about any ongoing course of treatment. Unfortunately, patients are not always accurate medical historians and may not fully appreciate their conditions or courses of treatment. Consulting with the regular physician helps to eliminate the possibility that an important aspect of the patient’s history or condition is overlooked.
On the back end, when the regular physician resumes care of the patient, he should be able to reinforce the course of hospital care and provide an additional layer of education about why the hospitalist made certain treatment decisions. Of course, the regular physician can serve in this role only if the hospitalist has taken the opportunity to inform the regular physician about the course of care.
4) Accurate representations: We are seeing more cases in which physicians are being sued for alleged misrepresentations to patients.
For example, each of you has probably seen an ad in which a Lasik provider advertises that the procedure is “20/20 or it’s free.” A patient may be able to allege that this advertisement is a guarantee that the procedure will result in 20/20 vision, but no medical provider should guarantee a successful outcome. Each human body reacts differently to treatment, and there is no physician who has not seen an unexpected outcome. Providing patients with unrealistic expectations about their outcomes can lead to lawsuits, even if a physician has obtained a signed informed consent detailing the risks involved.
The situation is even worse when the physician misrepresents his experience. We have defended cases in which physicians have told patients that they had performed a procedure hundreds of times, when that representation was not accurate. One of the greatest assets available to physicians in litigation is their advanced training and professional experience, but that asset becomes worthless if a physician gives the jury a reason to doubt his credibility. Once the jury believes that a physician has misrepresented his experience, he loses the ability to credibly explain his treatment decisions.
5) HMO-directed medicine: It’s no secret that many patients are dissatisfied with their managed care plans. In the abstract, patients understand that rising healthcare costs have caused insurers to limit care, but they are unwilling to view their own situations objectively. They believe that they are entitled to unlimited medical resources. When the HMO tells patients “no,” they have a tendency to transfer their frustrations to their physicians.
The coverage provided by the HMO is a contractual matter between the patient and the insurer. At the end of the day, the treating physician does not control the patient’s eligibility for certain types of care. What the treating physician cannot overlook, however, is that the physician-patient relationship is a personal one that exists independently of the insurance relationship. The standards of professional care require a physician to inform patients of all treatment options—even if the physician believes that the HMO is unlikely to authorize some of them. Ultimately, even if the cost of a treatment option would be prohibitive, a physician must remember that the patient has a right to be informed and to make her own decisions. Physicians should also be receptive to advocating on a patient’s behalf about the reasonableness or necessity of care.
6) Attend to the patient: Few things are harder to explain to a jury than a physician’s failure to personally attend to a patient. The reality is that physicians may receive information over the telephone or through an intermediary’s relay, and they often have to use these means of communication. The risk is that a physician will miss a detail that he would have seen if he had personally examined the patient.
Err on the side of caution. If your differential diagnosis includes a potentially serious condition and your ability to rule out that condition might be influenced by physical findings, arrange to see the patient in person. If the situation does not allow for a face-to-face appointment, instruct the patient to seek medical care through an emergency department or another provider.
Having been there, we can say that there is nothing more difficult for a physician than to have to admit, at deposition, “I wish I had seen the patient personally.”
7) Adequate discharge instructions: Another reality of modern medical practice is that patients often leave the hospital before their course of healing is complete. Patients may leave the hospital shortly after surgery or while still affected by an illness. Even when the treatment in the hospital has been appropriate, we regularly see cases arising from the physician’s discharge instructions. Patients allege that they did not receive enough information to allow them to recognize the onset of potentially serious complications. To prevent confusion, discharge instructions should address all areas of potential concern, including pain, wound care, and signs of infection. The instructions should also include information regarding whom to contact if questions arise and should instruct the patient to return if she experiences a change in condition.
8) Be prepared to deal with misinformation: Technology is wonderful. This morning, we typed the term “diabetes mellitus” into the Google search engine. It returned more than 7.3 million references. Within 30 seconds, we located the “final cure for diabetes,” which was compounded from banana, bitter melon, licorice extract, and cayenne pepper (among other things). While this might cure diabetes, we have our doubts; however, we will leave the debate to more scientific minds.
The problem is that sick people often become desperate people—particularly when fighting diseases like cancer, AIDS, and Alzheimer’s. They are likely to be vulnerable to misinformation and might be inclined to pursue courses of action that could actually harm them. Physicians must realize that they will regularly deal with patients who have unrealistic expectations of the medical system. The only way physicians can combat misinformation is by providing better information. Physicians need to be prepared to educate patients who have unsuccessfully tried to educate themselves. Part of that education can be verbal, but physicians should consider directing patients to reliable resources that they can explore after leaving the hospital.
Patients are also bombarded by advertisements for prescription medications, all of which are designed to persuade them to take an active role in requesting particular prescriptions. The problem is that the physician is responsible for selecting an appropriate medication. Physicians have to be able to explain why an advertised medication may not be the best choice under the circumstances, no matter what the TV commercial said.
9) Take responsibility: Everyone makes mistakes. No physician is perfect, nor is it fair to expect perfection from those who deal with the intricate machinery of the human body. A culture of fear, however, has caused many physicians to believe that they should not admit their mistakes. Our experience shows that recognizing and responding to mistakes is a far better course of action than trying to pretend they didn’t exist.
Taking responsibility doesn’t mean admitting that you were negligent. It does mean acknowledging a complication when it occurs and assisting the patient in minimizing the consequences. Sometimes this will result in transferring the patient to another physician. At other times, the physician may have to pay to correct the mistake. Many medical malpractice insurance carriers now have programs targeted at promptly recognizing and reacting to unexpected outcomes. These insurers realize that the best time to correct a bad situation is within hours or days of its occurrence. Enlist the help of your insurer or hospital risk manager. If patients feel like their physicians are trying to minimize a situation, hoping mistakenly that it will go away, it becomes much more difficult to avoid litigation.
10) Don’t compromise your integrity: Physicians are professionals. Whether it’s fair or not, jurors hold physicians to a higher standard of conduct. They expect more of doctors. They expect doctors to “do the right thing.” Consequently, jurors tend to punish physicians who place their personal interests above their patients’ interests. Federal law already prohibits physicians from engaging in many forms of self-dealing, such as investing in certain businesses or receiving kickbacks for medical care. But there are many lawful forms of conduct that might cause a jury to question why a physician chose a particular course of action.
Recent medical literature demonstrates that pharmaceutical manufacturers direct 90% of an estimated $21 billion annual marketing budget at physicians, including the sponsorship of an estimated 300,000 annual education events. This amounts to approximately $13,000 per physician annually. Because of concerns that even small inducements might have an unwanted effect upon physician independence, the Stanford Medical Center recently announced a new policy prohibiting physicians from accepting free drug samples or even small gifts from pharmaceutical sales representatives. Prominent newspapers have been running stories about the “free lunches” physicians receive.
We’re not suggesting that physicians spurn pharmaceutical sales representatives or that they avoid legal business opportunities. We caution you, however, that smart plaintiffs’ attorneys are sensitive to any indications that a physician has allowed his interests to influence a patient’s treatment. Don’t put yourself in a position where a jury could reasonably question whether or not you had your patient’s best interests in mind.
Unfortunately, even if a physician observes all of these precautions, a patient still might file a lawsuit. If you sense a real potential for litigation, contact your insurance company and provide notice of a potential claim. This will help ensure that your insurance coverage is available if a lawsuit is filed. It also allows the insurance company to retain an attorney to assist you. The next time we write, we’ll provide our top tips for winning a lawsuit once it occurs. TH
Patrick O’Rourke is the managing associate university counsel for the University of Colorado’s litigation office. Kari M. Hershey, JD, practices health law in Colorado.
We’ve defended physicians involved in lawsuits for more than a decade. After representing dozens of physicians, nurses, and other healthcare professionals, we can say one thing for certain: No one likes to get sued.
Good physicians struggle with the litigation process. Even when their care has been absolutely appropriate, many doctors experience great anxiety when they are accused of having negligently injured a patient. Because they have trained so hard to gain their expertise, many of our clients have found that a lawsuit strikes at them personally as well as professionally. At the end of the day, lawsuits cause stress, take physicians away from their personal lives, and often lead to serious financial and professional consequences.
Therefore, one of the questions that we most often receive is, “How can a physician avoid lawsuits?”
Top 10 Ways to Stay Out of Litigation
1) Good documentation: Often, in a lawsuit, plaintiffs’ attorneys will tell the jury the old adage, “If it’s not in the record, it didn’t happen.” What everyone who has practiced medicine knows, however, is that many things don’t make it to the chart. Physicians don’t have the time to recount their conversations with patients verbatim. What we want to see in the chart are the following:
- A description of the information provided by the patient that factored into your diagnoses or treatment decisions;
- A description of the physical findings or laboratory results that factored into your diagnoses and treatment decisions;
- A discussion of why you made a particular decision;
- A discussion of the course of treatment you selected; and
- A discussion of your anticipated follow-up.
Of these elements, we most often fail to see a discussion of why you made a particular decision, and this is a crucial piece of the record. As you know, physicians often have a broad range of treatment choices. Including information about why you selected a particular course of treatment—in light of the available data—makes the record more understandable to the jury. A good chart lays out more than just the physician’s actions. A good chart is so complete that another physician could assume care for the patient tomorrow, easily understanding both the course of treatment and why you chose it.
2) Good communication: In his book Blink, Malcolm Gladwell describes something defense lawyers have known for many years: That the quality of the care does not determine whether or not a physician gets sued. There are many instances in which a physician who makes a mistake that causes an injury manages to avoid litigation. There are also many instances in which a physician’s care is appropriate, but the patient sues the physician after a recognized complication. What makes the difference?
More often than not, the determining factor in whether or not a physician is sued is the patient’s perception of whether or not the physician cared about her. In situations in which patients leave the physician’s office believing that the physician listened carefully to their complaints, spent the time to explain the course of treatment, and genuinely cared about them as people, we don’t see as many lawsuits. If a physician explains why a complication occurred—not just that it occurred—and appears empathetic to the patient, she has less of a motivation to sue. Conversely, if the patient feels like the physician sees her as a commodity or didn’t take the time to understand her complaints, the risk of litigation goes up.
One of the most important aspects of good communication is adequate informed consent. Remember, informed consent is a dialogue—not a lecture. It requires physicians to discuss:
- The substantial risks of the treatment;
- The benefits of the treatment; and
- The alternatives to the treatment. Sometimes it’s difficult to determine the substantial risks because a patient and a physician may view the magnitude of a particular risk differently. Our rule of thumb is that any risks associated with serious long-term sequelae, such as permanent impairment, must be discussed, even if the probability of the risk occurring is remote.
3) Good consultation: Many hospitalists do not have long-term relationships with their patients. After a course of hospital treatment, the patient will return to her regular physician. A common breakdown occurs when the consultation between the hospitalist and the regular physician is inadequate.
On the front end, the hospitalist who receives a patient should take the opportunity, if possible, to consult with the regular physician about any ongoing course of treatment. Unfortunately, patients are not always accurate medical historians and may not fully appreciate their conditions or courses of treatment. Consulting with the regular physician helps to eliminate the possibility that an important aspect of the patient’s history or condition is overlooked.
On the back end, when the regular physician resumes care of the patient, he should be able to reinforce the course of hospital care and provide an additional layer of education about why the hospitalist made certain treatment decisions. Of course, the regular physician can serve in this role only if the hospitalist has taken the opportunity to inform the regular physician about the course of care.
4) Accurate representations: We are seeing more cases in which physicians are being sued for alleged misrepresentations to patients.
For example, each of you has probably seen an ad in which a Lasik provider advertises that the procedure is “20/20 or it’s free.” A patient may be able to allege that this advertisement is a guarantee that the procedure will result in 20/20 vision, but no medical provider should guarantee a successful outcome. Each human body reacts differently to treatment, and there is no physician who has not seen an unexpected outcome. Providing patients with unrealistic expectations about their outcomes can lead to lawsuits, even if a physician has obtained a signed informed consent detailing the risks involved.
The situation is even worse when the physician misrepresents his experience. We have defended cases in which physicians have told patients that they had performed a procedure hundreds of times, when that representation was not accurate. One of the greatest assets available to physicians in litigation is their advanced training and professional experience, but that asset becomes worthless if a physician gives the jury a reason to doubt his credibility. Once the jury believes that a physician has misrepresented his experience, he loses the ability to credibly explain his treatment decisions.
5) HMO-directed medicine: It’s no secret that many patients are dissatisfied with their managed care plans. In the abstract, patients understand that rising healthcare costs have caused insurers to limit care, but they are unwilling to view their own situations objectively. They believe that they are entitled to unlimited medical resources. When the HMO tells patients “no,” they have a tendency to transfer their frustrations to their physicians.
The coverage provided by the HMO is a contractual matter between the patient and the insurer. At the end of the day, the treating physician does not control the patient’s eligibility for certain types of care. What the treating physician cannot overlook, however, is that the physician-patient relationship is a personal one that exists independently of the insurance relationship. The standards of professional care require a physician to inform patients of all treatment options—even if the physician believes that the HMO is unlikely to authorize some of them. Ultimately, even if the cost of a treatment option would be prohibitive, a physician must remember that the patient has a right to be informed and to make her own decisions. Physicians should also be receptive to advocating on a patient’s behalf about the reasonableness or necessity of care.
6) Attend to the patient: Few things are harder to explain to a jury than a physician’s failure to personally attend to a patient. The reality is that physicians may receive information over the telephone or through an intermediary’s relay, and they often have to use these means of communication. The risk is that a physician will miss a detail that he would have seen if he had personally examined the patient.
Err on the side of caution. If your differential diagnosis includes a potentially serious condition and your ability to rule out that condition might be influenced by physical findings, arrange to see the patient in person. If the situation does not allow for a face-to-face appointment, instruct the patient to seek medical care through an emergency department or another provider.
Having been there, we can say that there is nothing more difficult for a physician than to have to admit, at deposition, “I wish I had seen the patient personally.”
7) Adequate discharge instructions: Another reality of modern medical practice is that patients often leave the hospital before their course of healing is complete. Patients may leave the hospital shortly after surgery or while still affected by an illness. Even when the treatment in the hospital has been appropriate, we regularly see cases arising from the physician’s discharge instructions. Patients allege that they did not receive enough information to allow them to recognize the onset of potentially serious complications. To prevent confusion, discharge instructions should address all areas of potential concern, including pain, wound care, and signs of infection. The instructions should also include information regarding whom to contact if questions arise and should instruct the patient to return if she experiences a change in condition.
8) Be prepared to deal with misinformation: Technology is wonderful. This morning, we typed the term “diabetes mellitus” into the Google search engine. It returned more than 7.3 million references. Within 30 seconds, we located the “final cure for diabetes,” which was compounded from banana, bitter melon, licorice extract, and cayenne pepper (among other things). While this might cure diabetes, we have our doubts; however, we will leave the debate to more scientific minds.
The problem is that sick people often become desperate people—particularly when fighting diseases like cancer, AIDS, and Alzheimer’s. They are likely to be vulnerable to misinformation and might be inclined to pursue courses of action that could actually harm them. Physicians must realize that they will regularly deal with patients who have unrealistic expectations of the medical system. The only way physicians can combat misinformation is by providing better information. Physicians need to be prepared to educate patients who have unsuccessfully tried to educate themselves. Part of that education can be verbal, but physicians should consider directing patients to reliable resources that they can explore after leaving the hospital.
Patients are also bombarded by advertisements for prescription medications, all of which are designed to persuade them to take an active role in requesting particular prescriptions. The problem is that the physician is responsible for selecting an appropriate medication. Physicians have to be able to explain why an advertised medication may not be the best choice under the circumstances, no matter what the TV commercial said.
9) Take responsibility: Everyone makes mistakes. No physician is perfect, nor is it fair to expect perfection from those who deal with the intricate machinery of the human body. A culture of fear, however, has caused many physicians to believe that they should not admit their mistakes. Our experience shows that recognizing and responding to mistakes is a far better course of action than trying to pretend they didn’t exist.
Taking responsibility doesn’t mean admitting that you were negligent. It does mean acknowledging a complication when it occurs and assisting the patient in minimizing the consequences. Sometimes this will result in transferring the patient to another physician. At other times, the physician may have to pay to correct the mistake. Many medical malpractice insurance carriers now have programs targeted at promptly recognizing and reacting to unexpected outcomes. These insurers realize that the best time to correct a bad situation is within hours or days of its occurrence. Enlist the help of your insurer or hospital risk manager. If patients feel like their physicians are trying to minimize a situation, hoping mistakenly that it will go away, it becomes much more difficult to avoid litigation.
10) Don’t compromise your integrity: Physicians are professionals. Whether it’s fair or not, jurors hold physicians to a higher standard of conduct. They expect more of doctors. They expect doctors to “do the right thing.” Consequently, jurors tend to punish physicians who place their personal interests above their patients’ interests. Federal law already prohibits physicians from engaging in many forms of self-dealing, such as investing in certain businesses or receiving kickbacks for medical care. But there are many lawful forms of conduct that might cause a jury to question why a physician chose a particular course of action.
Recent medical literature demonstrates that pharmaceutical manufacturers direct 90% of an estimated $21 billion annual marketing budget at physicians, including the sponsorship of an estimated 300,000 annual education events. This amounts to approximately $13,000 per physician annually. Because of concerns that even small inducements might have an unwanted effect upon physician independence, the Stanford Medical Center recently announced a new policy prohibiting physicians from accepting free drug samples or even small gifts from pharmaceutical sales representatives. Prominent newspapers have been running stories about the “free lunches” physicians receive.
We’re not suggesting that physicians spurn pharmaceutical sales representatives or that they avoid legal business opportunities. We caution you, however, that smart plaintiffs’ attorneys are sensitive to any indications that a physician has allowed his interests to influence a patient’s treatment. Don’t put yourself in a position where a jury could reasonably question whether or not you had your patient’s best interests in mind.
Unfortunately, even if a physician observes all of these precautions, a patient still might file a lawsuit. If you sense a real potential for litigation, contact your insurance company and provide notice of a potential claim. This will help ensure that your insurance coverage is available if a lawsuit is filed. It also allows the insurance company to retain an attorney to assist you. The next time we write, we’ll provide our top tips for winning a lawsuit once it occurs. TH
Patrick O’Rourke is the managing associate university counsel for the University of Colorado’s litigation office. Kari M. Hershey, JD, practices health law in Colorado.
Caution! Job Opportunities Ahead
Recent studies, published in mass media and professional publications alike, warn of a physician shortage expected to worsen progressively during the next 15 years and to peak around 2020. The predicted scope of the national deficit ranges from 85,000 to 200,000 physicians. Analyses of the causes of the shortage conclude that the rate of population growth will exceed growth in the number of physicians, while demand for physician services continues to expand. The projected shortage of physicians is likely to have the greatest effect on underserved and poorer communities that have historically had the most difficulty recruiting and retaining physicians.
In response, hospitals are implementing, expanding, or refining recruitment and retention programs. Practices are increasingly offering part-time work, flex-time, and job-sharing arrangements. In addition to flexible schedules, physician recruitment packages may include sign-on bonuses, relocation allowances, student loan repayment, income guarantees, favorable loans, and other incentives. Additional incentives are available to physicians willing to practice in federally recognized Health Professional Shortage Areas (HPSA) and to those who practice in specialties governed by HPSA regulations, such as family practice, internal medicine, pediatrics, obstetrics and gynecology, oral surgery, mental health, vision care, and podiatry.
These recruiting arrangements are governed by a variety of laws and regulations. Because of the infinite number of factors affecting any given recruitment arrangement, a comprehensive discussion of all the legal implications in recruitment arrangements is beyond the scope of this article. We will, however, provide an overview of three key legal concepts that physicians should consider when evaluating a hospital’s recruiting package. We’ll address recruiting packages offered by medical practices in a later article.
Stark Law
Unless an express exception applies, federal legislation prohibits physicians from making referrals for “designated health services” to entities with which the physician (or an immediate family member) has a “financial relationship.” The law also prohibits entities from submitting claims for services provided in the course of making a prohibited referral.
The Stark legislation broadly defines “financial relationships” as including direct ownership, indirect ownership, investment interests, and compensation arrangements. Similarly, the law broadly defines “designated health services” to include clinical laboratory, physical therapy, occupational therapy, speech pathology, radiology, radiation therapy, home health, and inpatient and outpatient hospital services. “Designated health services” are not limited purely to services rendered and include the provision of radiation therapy supplies, durable medical equipment and supplies, certain nutrients, prosthetics, orthotics, and prescription drugs. A classic example of an arrangement that would violate the Stark legislation is an orthopedic surgeon who refers patients to a physical therapy facility in which he owns a controlling interest.
In general, physicians should be wary of any relationship that involves referring patients to entities in which they have any financial interest, but there are a number of exceptions within the Stark legislation. The Stark law is a strict liability statute; thus, unless an express exception applies, a violation of the statute subjects the provider and entity to liability. For this article, we are concerned with only one of the exceptions, which applies when hospitals and Federally Qualified Health Centers recruit physicians to their geographic service areas.
Specifically, these entities may offer remuneration to induce physicians to relocate and join the medical staff as long as the recruited physicians are not required to refer patients to the facility and provided that the amount of any physician remuneration does not take into account the volume or value of patient referrals. In other words, although the hospital may recruit a physician, it cannot use the recruiting contract to require the physician to make a certain number of referrals or generate a certain amount of revenue.
It is also important to note that the recruiting exception is designed to promote true recruiting, not simply to entice an established physician in the community to move her practice to a competing hospital. Consequently, the recruiting exception does not apply unless the recruited physician will either move her practice at least 25 miles or generate 75% of her revenues from new patients.
Anti-Kickback Statute
The anti-kickback statute prohibits healthcare providers or entities from knowingly offering or accepting remuneration to induce or reward referrals. Federal regulations create “safe harbors” outlining criteria that, if met, shield providers and entities from anti-kickback liability. The recruitment safe harbor requires a recruited physician leaving an existing medical practice to relocate at least 100 miles away and to generate 85% of new practice revenues from patients not seen at the former practice. Further, the recruited physician must agree to treat Medicare and Medicaid patients.
Internal Revenue Code
Any tax-exempt entity and its physician recruits must carefully structure recruiting arrangements to avoid jeopardizing the entity’s tax-exempt status. Moreover, certain recruitment incentives have tax consequences for an individual recruit.
Tax-exempt entities: Generally, a tax-exempt entity’s earnings may not benefit private individuals. If an improper benefit is found, both the entity and the individual are subject to penalties, including the potential loss of the entity’s tax-exempt status. Thus, physician-recruiting payments by tax-exempt hospitals must fit within IRS requirements.
Specifically, when a tax-exempt hospital recruits a physician to provide service on behalf of the organization, the arrangement must meet an “operational test.” The operational test requires the hospital to account for all of the physician’s services and demonstrate that it is paying reasonable compensation. Consequently, when a tax-exempt hospital recruits a physician to provide services not just for the hospital but also for the surrounding community, it must ensure that all conduct is consistent with the facility’s tax-exempt purpose. Thus, for example, a tax-exempt hospital that has a charitable purpose may be able to justify a recruiting arrangement that allows a physician to provide services that promote the health of the surrounding community.
Ultimately, the IRS is responsible for determining that a tax-exempt hospital is not using its funds solely to promote the physician’s personal interests. Consequently, a tax-exempt hospital should be prepared to demonstrate the reasons the physician was recruited, the need the recruited physician fills, ways in which the recruitment furthers the hospital’s purpose, evidence that the recruiting agreement was negotiated in good faith, and proof that none of the participants in the negotiation suffered from a conflict of interest.
Tax consequences to recruits: Notably, recruiting packages may offer incentives to the recruit that the IRS may consider taxable income. For example, many recruiting arrangements include loans to guarantee a certain level of income and cover the costs associated with starting up a new practice or adding a physician to an existing practice. These loans may be forgiven over time if the recruited physician continues practicing in the community. Generally, proceeds of a loan do not constitute taxable income because the benefit is offset by an obligation to repay. When a loan is subject to forgiveness, however, the forgiven portion may be taxable. Consequently, recruits should evaluate any recruitment incentives in the context of their long-term tax consequences.
Conclusion
Federal law recognizes that communities benefit when hospitals recruit physicians to meet a particular need, but the law does not allow hospitals or physicians to abuse the recruiting relationship.
In evaluating a hospital’s recruiting agreement, physicians should ensure that the agreement does not require them to refer patients to a particular facility, does not calculate their remuneration based upon the number or value of referrals, meets the requirements of relocation or establishment of a new patient base, is consistent with the hospital’s tax status, and does not expose the physician to unintended tax liabilities. TH
O’Rourke works in the Office of University Counsel, Department of Litigation, Denver.
Recent studies, published in mass media and professional publications alike, warn of a physician shortage expected to worsen progressively during the next 15 years and to peak around 2020. The predicted scope of the national deficit ranges from 85,000 to 200,000 physicians. Analyses of the causes of the shortage conclude that the rate of population growth will exceed growth in the number of physicians, while demand for physician services continues to expand. The projected shortage of physicians is likely to have the greatest effect on underserved and poorer communities that have historically had the most difficulty recruiting and retaining physicians.
In response, hospitals are implementing, expanding, or refining recruitment and retention programs. Practices are increasingly offering part-time work, flex-time, and job-sharing arrangements. In addition to flexible schedules, physician recruitment packages may include sign-on bonuses, relocation allowances, student loan repayment, income guarantees, favorable loans, and other incentives. Additional incentives are available to physicians willing to practice in federally recognized Health Professional Shortage Areas (HPSA) and to those who practice in specialties governed by HPSA regulations, such as family practice, internal medicine, pediatrics, obstetrics and gynecology, oral surgery, mental health, vision care, and podiatry.
These recruiting arrangements are governed by a variety of laws and regulations. Because of the infinite number of factors affecting any given recruitment arrangement, a comprehensive discussion of all the legal implications in recruitment arrangements is beyond the scope of this article. We will, however, provide an overview of three key legal concepts that physicians should consider when evaluating a hospital’s recruiting package. We’ll address recruiting packages offered by medical practices in a later article.
Stark Law
Unless an express exception applies, federal legislation prohibits physicians from making referrals for “designated health services” to entities with which the physician (or an immediate family member) has a “financial relationship.” The law also prohibits entities from submitting claims for services provided in the course of making a prohibited referral.
The Stark legislation broadly defines “financial relationships” as including direct ownership, indirect ownership, investment interests, and compensation arrangements. Similarly, the law broadly defines “designated health services” to include clinical laboratory, physical therapy, occupational therapy, speech pathology, radiology, radiation therapy, home health, and inpatient and outpatient hospital services. “Designated health services” are not limited purely to services rendered and include the provision of radiation therapy supplies, durable medical equipment and supplies, certain nutrients, prosthetics, orthotics, and prescription drugs. A classic example of an arrangement that would violate the Stark legislation is an orthopedic surgeon who refers patients to a physical therapy facility in which he owns a controlling interest.
In general, physicians should be wary of any relationship that involves referring patients to entities in which they have any financial interest, but there are a number of exceptions within the Stark legislation. The Stark law is a strict liability statute; thus, unless an express exception applies, a violation of the statute subjects the provider and entity to liability. For this article, we are concerned with only one of the exceptions, which applies when hospitals and Federally Qualified Health Centers recruit physicians to their geographic service areas.
Specifically, these entities may offer remuneration to induce physicians to relocate and join the medical staff as long as the recruited physicians are not required to refer patients to the facility and provided that the amount of any physician remuneration does not take into account the volume or value of patient referrals. In other words, although the hospital may recruit a physician, it cannot use the recruiting contract to require the physician to make a certain number of referrals or generate a certain amount of revenue.
It is also important to note that the recruiting exception is designed to promote true recruiting, not simply to entice an established physician in the community to move her practice to a competing hospital. Consequently, the recruiting exception does not apply unless the recruited physician will either move her practice at least 25 miles or generate 75% of her revenues from new patients.
Anti-Kickback Statute
The anti-kickback statute prohibits healthcare providers or entities from knowingly offering or accepting remuneration to induce or reward referrals. Federal regulations create “safe harbors” outlining criteria that, if met, shield providers and entities from anti-kickback liability. The recruitment safe harbor requires a recruited physician leaving an existing medical practice to relocate at least 100 miles away and to generate 85% of new practice revenues from patients not seen at the former practice. Further, the recruited physician must agree to treat Medicare and Medicaid patients.
Internal Revenue Code
Any tax-exempt entity and its physician recruits must carefully structure recruiting arrangements to avoid jeopardizing the entity’s tax-exempt status. Moreover, certain recruitment incentives have tax consequences for an individual recruit.
Tax-exempt entities: Generally, a tax-exempt entity’s earnings may not benefit private individuals. If an improper benefit is found, both the entity and the individual are subject to penalties, including the potential loss of the entity’s tax-exempt status. Thus, physician-recruiting payments by tax-exempt hospitals must fit within IRS requirements.
Specifically, when a tax-exempt hospital recruits a physician to provide service on behalf of the organization, the arrangement must meet an “operational test.” The operational test requires the hospital to account for all of the physician’s services and demonstrate that it is paying reasonable compensation. Consequently, when a tax-exempt hospital recruits a physician to provide services not just for the hospital but also for the surrounding community, it must ensure that all conduct is consistent with the facility’s tax-exempt purpose. Thus, for example, a tax-exempt hospital that has a charitable purpose may be able to justify a recruiting arrangement that allows a physician to provide services that promote the health of the surrounding community.
Ultimately, the IRS is responsible for determining that a tax-exempt hospital is not using its funds solely to promote the physician’s personal interests. Consequently, a tax-exempt hospital should be prepared to demonstrate the reasons the physician was recruited, the need the recruited physician fills, ways in which the recruitment furthers the hospital’s purpose, evidence that the recruiting agreement was negotiated in good faith, and proof that none of the participants in the negotiation suffered from a conflict of interest.
Tax consequences to recruits: Notably, recruiting packages may offer incentives to the recruit that the IRS may consider taxable income. For example, many recruiting arrangements include loans to guarantee a certain level of income and cover the costs associated with starting up a new practice or adding a physician to an existing practice. These loans may be forgiven over time if the recruited physician continues practicing in the community. Generally, proceeds of a loan do not constitute taxable income because the benefit is offset by an obligation to repay. When a loan is subject to forgiveness, however, the forgiven portion may be taxable. Consequently, recruits should evaluate any recruitment incentives in the context of their long-term tax consequences.
Conclusion
Federal law recognizes that communities benefit when hospitals recruit physicians to meet a particular need, but the law does not allow hospitals or physicians to abuse the recruiting relationship.
In evaluating a hospital’s recruiting agreement, physicians should ensure that the agreement does not require them to refer patients to a particular facility, does not calculate their remuneration based upon the number or value of referrals, meets the requirements of relocation or establishment of a new patient base, is consistent with the hospital’s tax status, and does not expose the physician to unintended tax liabilities. TH
O’Rourke works in the Office of University Counsel, Department of Litigation, Denver.
Recent studies, published in mass media and professional publications alike, warn of a physician shortage expected to worsen progressively during the next 15 years and to peak around 2020. The predicted scope of the national deficit ranges from 85,000 to 200,000 physicians. Analyses of the causes of the shortage conclude that the rate of population growth will exceed growth in the number of physicians, while demand for physician services continues to expand. The projected shortage of physicians is likely to have the greatest effect on underserved and poorer communities that have historically had the most difficulty recruiting and retaining physicians.
In response, hospitals are implementing, expanding, or refining recruitment and retention programs. Practices are increasingly offering part-time work, flex-time, and job-sharing arrangements. In addition to flexible schedules, physician recruitment packages may include sign-on bonuses, relocation allowances, student loan repayment, income guarantees, favorable loans, and other incentives. Additional incentives are available to physicians willing to practice in federally recognized Health Professional Shortage Areas (HPSA) and to those who practice in specialties governed by HPSA regulations, such as family practice, internal medicine, pediatrics, obstetrics and gynecology, oral surgery, mental health, vision care, and podiatry.
These recruiting arrangements are governed by a variety of laws and regulations. Because of the infinite number of factors affecting any given recruitment arrangement, a comprehensive discussion of all the legal implications in recruitment arrangements is beyond the scope of this article. We will, however, provide an overview of three key legal concepts that physicians should consider when evaluating a hospital’s recruiting package. We’ll address recruiting packages offered by medical practices in a later article.
Stark Law
Unless an express exception applies, federal legislation prohibits physicians from making referrals for “designated health services” to entities with which the physician (or an immediate family member) has a “financial relationship.” The law also prohibits entities from submitting claims for services provided in the course of making a prohibited referral.
The Stark legislation broadly defines “financial relationships” as including direct ownership, indirect ownership, investment interests, and compensation arrangements. Similarly, the law broadly defines “designated health services” to include clinical laboratory, physical therapy, occupational therapy, speech pathology, radiology, radiation therapy, home health, and inpatient and outpatient hospital services. “Designated health services” are not limited purely to services rendered and include the provision of radiation therapy supplies, durable medical equipment and supplies, certain nutrients, prosthetics, orthotics, and prescription drugs. A classic example of an arrangement that would violate the Stark legislation is an orthopedic surgeon who refers patients to a physical therapy facility in which he owns a controlling interest.
In general, physicians should be wary of any relationship that involves referring patients to entities in which they have any financial interest, but there are a number of exceptions within the Stark legislation. The Stark law is a strict liability statute; thus, unless an express exception applies, a violation of the statute subjects the provider and entity to liability. For this article, we are concerned with only one of the exceptions, which applies when hospitals and Federally Qualified Health Centers recruit physicians to their geographic service areas.
Specifically, these entities may offer remuneration to induce physicians to relocate and join the medical staff as long as the recruited physicians are not required to refer patients to the facility and provided that the amount of any physician remuneration does not take into account the volume or value of patient referrals. In other words, although the hospital may recruit a physician, it cannot use the recruiting contract to require the physician to make a certain number of referrals or generate a certain amount of revenue.
It is also important to note that the recruiting exception is designed to promote true recruiting, not simply to entice an established physician in the community to move her practice to a competing hospital. Consequently, the recruiting exception does not apply unless the recruited physician will either move her practice at least 25 miles or generate 75% of her revenues from new patients.
Anti-Kickback Statute
The anti-kickback statute prohibits healthcare providers or entities from knowingly offering or accepting remuneration to induce or reward referrals. Federal regulations create “safe harbors” outlining criteria that, if met, shield providers and entities from anti-kickback liability. The recruitment safe harbor requires a recruited physician leaving an existing medical practice to relocate at least 100 miles away and to generate 85% of new practice revenues from patients not seen at the former practice. Further, the recruited physician must agree to treat Medicare and Medicaid patients.
Internal Revenue Code
Any tax-exempt entity and its physician recruits must carefully structure recruiting arrangements to avoid jeopardizing the entity’s tax-exempt status. Moreover, certain recruitment incentives have tax consequences for an individual recruit.
Tax-exempt entities: Generally, a tax-exempt entity’s earnings may not benefit private individuals. If an improper benefit is found, both the entity and the individual are subject to penalties, including the potential loss of the entity’s tax-exempt status. Thus, physician-recruiting payments by tax-exempt hospitals must fit within IRS requirements.
Specifically, when a tax-exempt hospital recruits a physician to provide service on behalf of the organization, the arrangement must meet an “operational test.” The operational test requires the hospital to account for all of the physician’s services and demonstrate that it is paying reasonable compensation. Consequently, when a tax-exempt hospital recruits a physician to provide services not just for the hospital but also for the surrounding community, it must ensure that all conduct is consistent with the facility’s tax-exempt purpose. Thus, for example, a tax-exempt hospital that has a charitable purpose may be able to justify a recruiting arrangement that allows a physician to provide services that promote the health of the surrounding community.
Ultimately, the IRS is responsible for determining that a tax-exempt hospital is not using its funds solely to promote the physician’s personal interests. Consequently, a tax-exempt hospital should be prepared to demonstrate the reasons the physician was recruited, the need the recruited physician fills, ways in which the recruitment furthers the hospital’s purpose, evidence that the recruiting agreement was negotiated in good faith, and proof that none of the participants in the negotiation suffered from a conflict of interest.
Tax consequences to recruits: Notably, recruiting packages may offer incentives to the recruit that the IRS may consider taxable income. For example, many recruiting arrangements include loans to guarantee a certain level of income and cover the costs associated with starting up a new practice or adding a physician to an existing practice. These loans may be forgiven over time if the recruited physician continues practicing in the community. Generally, proceeds of a loan do not constitute taxable income because the benefit is offset by an obligation to repay. When a loan is subject to forgiveness, however, the forgiven portion may be taxable. Consequently, recruits should evaluate any recruitment incentives in the context of their long-term tax consequences.
Conclusion
Federal law recognizes that communities benefit when hospitals recruit physicians to meet a particular need, but the law does not allow hospitals or physicians to abuse the recruiting relationship.
In evaluating a hospital’s recruiting agreement, physicians should ensure that the agreement does not require them to refer patients to a particular facility, does not calculate their remuneration based upon the number or value of referrals, meets the requirements of relocation or establishment of a new patient base, is consistent with the hospital’s tax status, and does not expose the physician to unintended tax liabilities. TH
O’Rourke works in the Office of University Counsel, Department of Litigation, Denver.