Crazy Cases Against Doctors -- and Inexplicable Settlements

Jeffrey Segal, MD, JD


May 14, 2015

In This Article

How Would You Have Handled Patients Like These?

Being sued for malpractice is a traumatic experience. The odds of being sued at least once over one's career are high.[1] Doctors typically have sufficient professional liability coverage to prevent financial loss. But not all cases get resolved as expected, and doctors may end up with unforeseeable financial loss.

In addition, disciplinary action by a state medical board can also result in onerous remediation, the cost of which can also be surprisingly steep.

It's one thing when a physician clearly did something wrong and as a result suffers the consequences. But what if the wrongdoing isn't clear-cut—yet the financial hit to the doctor is still severe? Consider two unusual cases in point.

Did This Doctor Instruct His Patient?

In 2012, a Georgia jury awarded $3 million dollars to the estate of William Martinez.[1] Martinez was 31 years old when he entered his cardiologist's office. He complained of chest pain radiating into his arm. His cardiologist noted that Martinez was at "high risk" of having coronary disease and ordered a nuclear stress test. The test was scheduled to take place 8 days later.

The day before his test, however, Martinez apparently engaged in some "exertional activity."[2] He participated in a threesome with a woman who was not his wife and a male friend. While in the midst of this three-way sexual experience, Martinez died. Naturally, his family then sued the cardiologist, arguing that no instruction to avoid exertional activity had been given. The family's rationale was that had Martinez been properly instructed to avoid high-risk activities, he would have complied.

During the trial, the cardiologist alleged that Martinez was instructed to avoid exertional activity until after the test was completed.[2]

The family initially claimed $5 million in damages, but this claim was reduced by a finding that Martinez was 40% liable for his own death.[2] So the patient was 40% liable; the liability of the doctor was 60%. If the cardiologist's malpractice policy coverage was for the typical $1 million, it probably leaves him $2 million short.

In states that have implemented substantive tort reform, the sizeable award might have been reduced as a matter of law—if a large portion of that award was attributable to "pain and suffering." In 2010, however, the Georgia Supreme Court overturned that state's law, which set a $350,000 limit on damages paid out for pain and suffering in medical malpractice cases.[1] It ruled that the 5-year-old Georgia law violated a person's constitutional right to trial by jury and a plaintiff's right to allow a jury to calculate noneconomic damages as it sees fit.

That prior decision has concrete implications for physicians—particularly given that most doctors carry only $1 million in malpractice coverage. As such, understand what your policy limits are if you are sued; assess the likelihood that a judgment will exceed those limits in a particular case if you lose; and see whether limiting your downside risk while still allowing you to have your day in court would be helpful, an option discussed next.

Hedging Your Risk if You Go to Court

The patient died young, with decades of unrealized earning capacity. For the physician being sued, this means that if the plaintiff wins, there is a sizable chance of a multimillion-dollar award. Juries are unpredictable. How can a doctor protect himself against a financially crippling judgment when the alternative is to give the carrier permission to pay an amount up to and including the policy limits?

The answer is a high/low agreement. A high/low agreement allows the doctor to both have his day in court and potentially be vindicated with a verdict of "not liable," without having his carrier simply pay the plaintiff an amount up to and including his policy limits (a tacit admission of liability) and not risking his entire nest egg should he lose the judgment.

In a high/low agreement, the each side agrees that there is risk to their case. A doctor may be concerned that an injured patient (such as someone in a wheelchair) will elicit a strong emotional reaction from a jury when testifying about an expensive life-care plan. Or a young widow with little earning capacity may likewise generate sympathy with a jury when they learn that her children will not be able to afford college. Such judgments could be as high as $10 million and bankrupt a doctor.

On the other hand, a plaintiff may be concerned that although the injury was great, the doctor did not violate the standard of care—and even if he did, the doctor's actions did not cause the injury. If the jury agrees, the plaintiff may get nothing.

A contractual high/low agreement between both parties can create settlement "bookends" of, say, $100,000 and $1 million. The doctor gets his day in court. The jury renders its verdict. But each side hedges its risk. If the jury says the doctor is liable for $10 million, the doctor only has to pay the "high" value—or $1 million, typically his policy limit. If the jury finds the doctor not liable, the plaintiff still gets something—in this example, $100,000. In addition, because the jury finds the doctor not liable, there's no report to the National Practitioner Data Bank.

Because there was no way to prove whether the cardiologist had properly advised his patient—because the advice was not documented, it was the doctor's word against that of the family of the deceased—the jury could just as easily have found for 100% for the plaintiff or 100% for the defendant. Given this possibility, a high/low strategy might have helped mitigate risk for the cardiologist.

If you are in a situation with a potentially catastrophic payout, consider bringing up the possibility of this arrangement with your carrier.


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