A Manager’s Guide to Dealing with Lawsuits

March 1, 2010

Here’s how practice administrators can help prepare your practice’s defense against a liability claim.


Much has been written about the importance of physician-patient dialogue in preventing lawsuits. Indeed, studies show patients are far less likely to sue - even in the face of medical error - if their doctor treats them with respect, shows empathy, and generally lets them feel heard.

Far less is said, however, about the role practice administrators play in managing legal landmines. And a critical role it is.

When your disgruntled billing clerk drops the discrimination bomb, it’s you they vent to first. When a patient sues for medical malpractice, it’s your number their attorney typically dials. “It’s important to know what you should and shouldn’t do in these situations before you’re actually faced with it,” says Susan Chmieleski, an advanced practice registered nurse, attorney, former practice administrator for 18 years, and current senior vice president of the Allied World Assurance Co., a New York-based insurance company that provides healthcare liability coverage.

Prepare your practice

All administrators, she notes, should have protocols in place to protect their practice - and their physicians - from liability claims. “If a patient is threatening to sue and you’re the one who gets that phone call, find out what the source of the complaint is,” says Chmieleski. “Acknowledge that you understand the patient is upset or angry and let them know you would really like them to help you understand how they got to this point. Get some detail.” Often, she notes, frustrated patients just want to vent about a bill or about waiting too long to be seen.

Once you’ve heard the patient’s complaint, let him know you take the matter seriously, and that you’ll address the matter promptly. That’s often enough to diffuse a situation. If his concern involves a medical issue, you should schedule a conference call between the physician, yourself, and the patient. If there is any doubt about what you should or should not say, contact your insurance carrier, which can be a valuable resource and will be able to provide legal counsel.

At the same time, you should instruct your doctors to inform you immediately if something went wrong with a procedure or diagnosis which could trigger a lawsuit - even if there’s been no complaint from the patient. Here again, your insurance company can provide guidance. “As soon as we get a patient complaint we’ll consult the attorney at our malpractice carrier, and they’ll look at the file and start doing documentation,” says Kelly DiCocco, an administrator for Saratoga Cardiology Associates in Saratoga Springs, N.Y. “If a procedure went badly, they might ask another doctor within the practice, someone who would have done a similar procedure, to review the notes and operation report to confirm that the physician did everything right.” That, then, becomes part of the legal record, she says, so if a lawsuit shows up in two years, and it often takes that long, there’s evidence that a documentation review was done while it was fresh in everyone’s mind.

In the event that a legal threat is made, remind your doctors never to change, or even touch, that patient’s medical record - not even to clarify documentation - because that can be perceived by the court as an admission of guilt.

Neither you, nor your physicians, should ever discuss details of the case with anyone other than your insurance company and your attorney. That includes the plaintiff’s attorney and colleagues because the physician defendant would be asked during deposition whether he discussed the case with anyone and what was said.

Educate your docs

Finally, it’s your job to help educate your physicians about the importance of safeguarding their personal assets from the threat of legal claims. Though you may not be qualified to advise on financial planning tools, like asset protection trusts and limited liability corporations, you can provide written material and references for your doctors to help them help themselves.

David B. Mandell, a financial consultant and asset protection attorney with Cincinnati-based OJM Group consulting firm, says it’s often administrators who call requesting copies of his books, including “The Doctor’s Wealth Protection Guide,” for their physicians. They also frequently initiate the call to set up a consult between Mandell and the doctor. “The biggest demand on physicians is their time so they don’t generally spend time during the day thinking like an owner,” says Mandell. “That’s where the administrator can be very valuable by finding articles they can read, getting them books, and finding podcasts that help them make better decisions for the practice and their personal finances.”

He notes that even those who have medical malpractice insurance are vulnerable to judgments that exceed their coverage limits. Plus, as employers, business owners, and drivers of automobiles, “physicians have plenty of litigation risks beyond malpractice,” Mandell says.

Though no businesses are immune from lawsuits, the medical field is particularly burdened - in part because patients can be emotional when they or a loved one is ill, and because doctors are perceived as having deep pockets, making them targets for frivolous claims.

As administrator, it’s your job to insulate your practice by educating yourself on ways to handle complaints, knowing who to call when things go wrong, and being proactive in helping physicians ensure their personal assets are protected. “We have to get everything in line for the doctors so they can best handle any legal threats that may arise,” says DiCocco. “They’re doing procedures every day, so it’s up to the administrator to protect the office and reach out to the attorney, where necessary.”

Shelly K. Schwartz, a freelance writer in Maplewood, N.J., has covered personal finance, technology, and healthcare for more than 12 years. Her work has appeared on CNNMoney.com, Bankrate.com, and Healthy Family magazine. She can be reached via physicianspractice@cmpmedica.com.

This article originally appeared in the March 2010 issue of Physicians Practice.