Issues and Trends in Medical Malpractice - Episode 7

State-Dependent Success Rates & the Contingency System

August 27, 2019

Simon D. Murray, MD: Are there states in which, if you follow guidelines, you can prove that you followed guidelines? Does that get you off the hook as far as malpractice, even if there’s a bad outcome?

Glenn Bergenfield: The short answer, or the law school answer, would be yes. If you follow the standard of care and something goes wrong, and you haven’t breached the standard of care, then you’re in good shape.

Simon D. Murray, MD: You could still be sued but you may not lose.

Glenn Bergenfield: You should win. You have to breach the standard of care in order to have a successful—or from the doctor’s point of view—an unsuccessful result in a malpractice case. So if you follow the standard of care, you can’t be sued successfully, you shouldn’t lose. That said, there’s disagreement about what the standard of care is, and so even though there are published standards, there are other published standards too that might differ. One might say, we recognize this as a kind of consensus, but this is something that should have been looked at differently, and here’s how.

Simon D. Murray, MD: Yes. And we both know that the standard of care varies where you live.

Glenn Bergenfield: Right.

Simon D. Murray, MD: It can vary from town to town or state to state.

Glenn Bergenfield: Yes. And I think big changes are coming to your practice, and it will be great if we have less of that. We were chatting about this before, there are some counties I think in Connecticut where they did hysterectomies at an unbelievably high rate. All of the doctors in the hospital probably chatted about what were the reasons why you would do hysterectomies. And they came to a consensus, their standard, that we would do them, and it resulted in lots of hysterectomies. In a few counties over, a much lower percentage. Well they can’t both be right. There’s a scientific basis that you should do it or you shouldn’t. And one of them was right, and what you need is a standard that takes into account all of the data and all of the work that doctors are doing nationwide so that you don’t have medicine being practiced too much by intuition or by anecdote or by chatting with your mates at the cafeteria.

Simon D. Murray, MD: Yes, there was a case in western Pennsylvania recently of a doctor who was convicted of prescribing 1.6 million doses of opioids in a 4-month period. And they asked why he did that. And he said, “The people out here have a lot of pain.”

Glenn Bergenfield: That might be true.

Simon D. Murray, MD: The standard of care might be different there, right?

Glenn Bergenfield: Right, there are standards of care that somehow are not a defense to your behavior.

Simon D. Murray, MD: He prescribed 104 million doses of fentanyl and OxyContin.

Glenn Bergenfield: Right. Well you raise 1 of the other really fascinating issues about medical malpractice, which is, it’s been estimated I think at Johns Hopkins University that something like 60% of the malpractice payments come from 6% of the doctors. And that’s probably a problem with opioids too; there are not a few but there are not very many doctors who are prescribing millions of pills. There might be 50 or 500, or some number that we can get our arms around. And those are big problems. Those are big problems in malpractice as well.

Simon D. Murray, MD: Now, I’ve read that in a malpractice case, that the defendant who loses the case has to pay the tax on legal fees now. Is that true?

Glenn Bergenfield: I don’t think so, no.

Simon D. Murray, MD: On the lawyer’s legal fees?

Glenn Bergenfield: The rule we have in North America is called the American Rule, and it says that you are responsible for your own legal feels—win or lose. And so the doctors don’t get their fees back if they win a malpractice case, as they usually do. That’s not the rule in England. For example, there is the English Rule, where the loser pays. We don’t have that here.

Simon D. Murray, MD: Well, this is different. I read that supposing you won $100,000 in a medical malpractice case, and the contingency fee is 30%. And so the lawyer will deduct $30,000 from the contingency fee, and the plaintiff will wind up with 70%. I read that the law changed recently where the plaintiff would then be responsible for paying the tax on the $30,000 that’s paid to the lawyer.

Glenn Bergenfield: Federal tax?

Simon D. Murray, MD: Yes, I think it was a federal code.

Glenn Bergenfield: I’m unfamiliar with that rule.

Simon D. Murray, MD: It seems silly.

Glenn Bergenfield: It’s silly, yes, because it’s money you didn’t get. But the rule has always been that whatever the money would have been if the malpractice hadn’t occurred, that’s how the tax law would have treated that, is what happens with the verdict. So for example, if I had pain and suffering, that’s not taxable, and it would never be taxable. On the other hand, if I have lost wages as a part of my lawsuit and I get $50,000 for lost wages, that would have been taxable.

Simon D. Murray, MD: I see.

Glenn Bergenfield: And so you have to pay federal tax on the $50,000; on the pain and suffering you wouldn’t.

Transcript edited for clarity.