Why Giving the Right Advice Can Get You Sued

Jeffrey Segal, MD, JD

Disclosures

June 11, 2015

Did the Doctor Fail to Order a Key Test?

In this case, the doctor was punished for not being clairvoyant. While a strong family history of breast cancer suggests an increased risk for ovarian cancer, family history alone is usually not the determinant for prophylactic removal of ovaries.

Many doctors prefer to see confirmatory BRCA testing before advising a patient to commit to surgery to remove healthy tissue. However, in this case, such testing, performed prior to the hysterectomy, would have been interpreted as negative as to whether an oophorectomy should also be performed. Many surgeons, seeing such a negative test result, would adopt a conservative approach and choose not to do the second procedure.

Had the defendant ordered BRCA testing anyway, despite its unhelpfulness in this context, and advised against the oophorectomy, it's possible—indeed likely—that he would have prevailed in court.

The Kafkaesque outcome for this surgeon was based on clever lawyering. The patient never argued that the doctor failed to order the genetic test. How could she? The result would have been negative. Instead, her case was based on the argument that her doctor should have removed her ovaries based on strong family history alone, which is contrary to accepted medical practice.

It's not clear whether the doctor asked his professional liability carrier to settle for policy limits before the case. It's also not clear whether the doctor's carrier paid any amount above the $1 million policy limits. And it's not clear whether the plaintiff attorneys used the lien as leverage to obtain a settlement above policy limits but lower than the $4 million award.

What is clear is that the doctor likely put his entire nest egg at risk when he evaluated one patient. The doctor acted responsibly by purchasing a professional liability policy. It just wasn't enough. Physicians face this risk every day.

Financial Implications for Physicians

If a doctor requests that the carrier settle the case, including writing a check up to the policy limit, and the carrier refuses, insisting instead on going to court, the carrier is on the hook for the outcome at trial. However, the carrier is not free to gamble with the doctor's money. In other words, the carrier is foreclosed from refusing to tender policy limits, then losing at trial, and then limiting its losses to policy limits. Carriers that adopt such a policy may be subject to bad faith claims by the doctor who is insured.

Historically, plaintiff attorneys rarely placed liens on a doctor's assets even when they prevailed with stratospheric verdicts. But times have changed. If a case with a potential multimillion dollar verdict moves to trial, and the doctor believes a jury might sympathize with the patient, he should consider memorializing in writing authorization for the carrier to settle the case up to policy limits.

Finally, doctors should consider some form of asset protection. Asset protection means structuring your business or financial affairs in such a way as to be partially or fully shielded from creditors. For example, in many states, various retirement accounts and insurance policies cannot be pierced by creditors. While asset protection plans should not be the first line of defense, they can be a useful adjunct to insurance and careful risk management.

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