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Drug-Based Treatment Liability Issues for Physicians


Use of specialty-compounded drugs is on the rise, and so are associated risks for medical practices.

A variety of medical specialties use drug-based treatments administered by the physician’s office as a routine part of their treatment regimes. This usage presents expanding serious liability issues that require serious consideration and risk management.

The use of specialty-compounded drugs to treat a variety of ailments is on the rise (one recent report says they account for a full 6 percent of medical-error claims) and so are associated risks for medical practices. One recent case involved the use of infected epidural steroid compounds unknowingly used by pain management practices across the country. Hundreds of patients across a dozen states came down with meningitis and a variety of other diseases, and in some nearly 50 cases with fatal results.

A review of many top malpractice and drug-injury lawsuit websites makes it clear that the doctor will very much be part of the lawsuit chain in these unfortunate circumstances. One such website reads, in part, “The doctors who prescribed (or administered) the drug that injured you may also be liable for your injuries because they are part of the chain of distribution of the drug.” Given this hostile environment it is more important than ever to have and enforce a drug-quality policy at your practice whether you work in pain management, cardiology, or any other specialty. Regardless of actual “fault” always remember that lawsuits seek deep, easy pockets like yours.

What You Can Do to Protect Your Patients and Practice

1. Have a written plan. Just as with HIPAA liability a key issue in attributing blame to a medical practice and its owners is whether or not they took any reasonable efforts to ensure quality and prevent harm.

2. Make someone responsible for enforcing it, then implement at least one secondary check and failsafe.

3. Keep immaculate records of the quality assurance program and note each time you check the responsible party’s work for compliance. Also keep detailed notes and examples on the correspondence and marketing between yourself and your vendors.

4. Do some due diligence on your vendors. Check their licensing, look for lawsuits and complaints, and get specific representations in writing about the quality and source of any pharmaceuticals you personally administer in your office. Common red flags we’ve seen emerge over the last few years include billing from outside the United States, drugs labeled in foreign languages instead of or in addition to English, and prices that are too good to be true.

5. Implement a comprehensiveand proactive risk management program that includes not only your regular malpractice coverage but also director’s and officer’s insurance (for those who make executive decisions on vital like the “who, when and where” of such purchases made by the practice) and RAC audit insurance (to help defend you against things like Medicare audits).

6. Remember that many insurance programs you may bill for treatment, including the use of drugs, require that all pharmaceuticals are sourced from licensed U.S. providers. If you use and bill for tainted drugs that do not meet these conditions you have both risk of injury to the patient and the potential to face a Medicare fraud claim, another exceptionally onerous issue that will have to be litigated and defended separately if you think you can prove you were an “innocent purchaser”.

7. Finally, review the informed-consent procedures you have in place in connection with such treatments. This area has been key in establishing liability for the doctors themselves.

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