Rise of mega payouts: Physicians are now the white whales

In recent years, malpractice attorneys have intensified their efforts to target physicians, becoming more aggressive in their pursuit of legal action. This relentless pursuit can be likened to Captain Ahab’s relentless quest for the white whale in the famous novel Moby Dick. The landscape has become increasingly challenging for physicians, as recent tort reform legislation in numerous states is rolling back the protections they once enjoyed. This unsettling trend underscores the critical importance of having a comprehensive compliance system in place.

With fewer regulatory safeguards available, physicians must now take proactive measures to safeguard their practice and protect their assets. A robust compliance system is essential in navigating the evolving legal landscape and mitigating the risks associated with malpractice claims. By implementing effective compliance measures, physicians can enhance their ability to defend against allegations, minimize the potential for legal action, and ultimately, safeguard the integrity of their practice.

The need for such a system has never been more critical than it is now, given the changing legal climate and increasing polarization and politicization of health care. These trends have increased the aggressiveness of malpractice attorneys. Physicians should view a compliance system as an indispensable tool that enables them to navigate the complex legal terrain with confidence and protect their professional reputation and financial well-being.

Gone are the days when physicians could enjoy regulatory safeguards through a state’s medical licensing board or medical society. These provisions, once the gatekeepers of administrative due process, are now hollow shields, serving more as platforms to enhance legal scrutiny on physicians rather than protecting them. The numbers bear this out.

In 2023, we saw a total of 57 medical malpractice verdicts in the United States exceeding $10 million. Over half of these cases reached or surpassed a sum of $25 million.

A review by TransRe revealed that between 2012 and 2022, verdicts equaling or exceeding $10 million increased from just 34 payouts of $10 million to a peak of 52 in the last recorded year of 2022.

Historically, such substantial verdicts, known somewhat crassly as “mega payouts,” were usually concentrated in states such as New York, Illinois, and Florida. However, Robert E. White Jr., president of TDC Group and The Doctors Company (a national medical liability insurer for physicians), noted an unexpected emergence of colossal verdicts from regions like Utah and Georgia—states where they had once been considered rare.

Mr. White attributes this shift partially to widespread rollbacks on tort reforms throughout multiple jurisdictions across the nation. State-led judicial reviews in higher courts have challenged the legality of financial restrictions applied on noneconomic damages claimed in medical malpractice verdicts, and as a result, such restrictions have been declared unconstitutional. Even in physician-friendly states like Utah, though financial caps remain on noneconomic damages, significant sums are still allotted in certain instances of malpractice verdicts, particularly related to wrongful death cases.

This trend coincides with systemic shifts in how malpractice cases are adjudicated in the state. In a landmark decision made by Utah’s Supreme Court in 2019, a provision concerning its pre-litigation panel process was struck down, eliminating a crucial stop-gap in the burgeoning floodgate of physician litigation in the state.

Physicians, even in states with favorable legislation, have fewer safeguards available and are now increasingly left to fend for themselves. The strongest defense remains a robust compliance system. Clinical documentation and a framework for regulatory oversight of clinical care are the two strongest pieces of evidence a physician can produce. Most legal arguments against physicians speculate harm or deviations in clinical practice in the gaps in care management. A compliance system fills those gaps.

While colossal judgments are rarely sustained, they provoke long-lasting repercussions on forthcoming claims and remain enshrined in a physician’s claims history. These awards serve as legal bellwethers and instigate more substantial settlement demands from future claimants. Moreover, they augment the expense of settling disputes down the road for similar claims.

Such verdicts become benchmarks against which all future settlements are gauged. The legal perils associated with mounting a defense against such potential astronomical rulings can dissuade insurers from even contesting certain malpractice lawsuits, consequently compelling them to propose more generous settlements as a strategic move to avoid courtroom proceedings.

This legal maneuvering, while seemingly rational, escalates the trend toward massive verdicts. But legal proceedings aren’t the only reason for this. Public sentiment has significantly been affected due to heightened frustrations stemming from pandemic-related challenges faced by societies worldwide. Divisive issues such as mask mandates or vaccine efficacies seem to have fuelled this collective ire. Initially, everyone celebrated health care professionals who were perceived akin to heroes due to their pivotal roles in frontline services through challenging times.

That celebratory perception has dwindled to the point of now being outright adversarial at times. This collectively fueled anger directed toward the health care system manifests itself most poignantly in liability suits. Jurors often see themselves as righting societal wrongs in health care by making examples out of physicians.

A compliance system allows physicians to clearly defend their actions to jurors who otherwise wouldn’t be dissuaded by more clinically erudite arguments. It simplifies the art of clinical care into a system of checks and balances, protocols, and procedures so that anyone, regardless of their political persuasion or education, can see what the physician is doing and understand his or her rationale.

In an era where the legal tides have turned health care into a political referendum of personal belief, emotions carry an outsized influence. Sometimes just appearing relatable is the best argument. Recognizing how physicians appear in court and, most importantly, to the judicial bench and jurors is an essential aspect of crafting a viable legal defense.

A compliance system is the modern equivalent of a Rosetta stone, translating the clinical complexities of medical decision-making into something palatable for the courts. People appreciate what they can understand, and they tend to sympathize with what they understand.

That alone might be the most compelling rationale for why you should upgrade your compliance system.

Jay K. Joshi is a family physician and author of Burden of Pain: A Physician’s Journey through the Opioid Epidemic. He is also the editor-in-chief of Daily Remedy, which is on Facebook, YouTube, X @TheDailyRemedy, Instagram @TheDailyRemedy_official, Pinterest, and LinkedIn.

Daily Remedy was founded in 2020. It has quickly transformed into a trusted source of editorialized health care content for patients and health care policy experts. Readership includes federal policymakers and physician executives who lead the largest health care systems in the nation.

Ron Chapman II is a federal criminal defense attorney.

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