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When the summons arrived, Nataly Minkina, MD, took one look at the lawsuit and fainted.
The Boston-area internist had treated the plaintiff just once while covering for the patient’s primary care physician. During a visit for an upper respiratory infection, the patient mentioned a lump in her breast, and Dr. Minkina confirmed a small thickening in the woman’s right breast. She sent the patient for a mammogram and ultrasound, the results of which the radiologist reported were normal, according to court documents.
Five years later, the patient claimed Dr. Minkina was one of several providers responsible for a missed breast cancer diagnosis.
Even worse than the lawsuit, however, was how her former insurer resolved the case, said Dr. Minkina, now an internist at Brigham and Women’s Hospital in Chestnut Hill, Mass. The claim was settled against the defendants for $500,000, and Dr. Minkina was alloted 30% of the liability. No fault was assigned to the other physicians named, while a nurse practitioner was alloted 10%, and the medical practice was alloted 60% liability, according to court documents.
“I was very upset,” Dr. Minkina said. “First of all, I was kept in the dark. Nobody ever talked to me. I did not get a single report or any document from my attorney in 12 months. When I asked why was I assigned the [30%] liability, they said the experts gave me bad evaluations, but they would not show reports to me. I was literally scapegoated.”
When the insurer refused to reconsider the allocation, Dr. Minkina took her complaint to court. The internist now has been embroiled in a legal challenge against Medical Professional Mutual Insurance Company (ProMutual) for 7 years. Dr. Minkina’s lawsuit alleges the insurer engaged in a bad faith allocation to serve its own economic interests by shifting fault for the claim from its insureds to its former client, Dr. Minkina. The insurance company contends the allocation was a careful and rational decision based on case evidence. In late July, the case went to trial in Dedham, Mass.
ProMutual declined comment on the case; the insurer also would not address general questions about its allocation policies.
“I started this fight because I felt violated and betrayed, not to make money,” Dr. Minkina said. “I am not rich by a long shot, and I wanted to clear my name because [a] good name is all I have. Additionally, having [a] record about malpractice payment in my physician profile makes me vulnerable.”
Liability experts say the case highlights the conflicts that can arise between physicians and insurers during malpractice lawsuits. The legal challenge also raises questions about allocations of liability by insurers, how the determinations are made, and what impact they have on doctors going forward.
The proportion of liability assigned after a settlement matters, said Jeffrey Segal, MD, JD, a neurosurgeon and founder of Medical Justice, a medicolegal consulting firm for physicians.
“There’s a subtext that your piece of the pie – the part that is allocated to you – is your liability, your culpability, your guilt,” Dr. Segal said in an interview. “This has impact going down the road in terms of reputation, in terms of credibility, and potentially of your premiums going forward. There are some real-world economic consequences.”
Bad care or bad faith?
In Dr. Minkina’s case, some facts are undisputed. In 2002, Dr. Minkina, then a physician at Blue Hills Medical Associates in Braintree, Mass., referred a 55-year-old patient for a mammogram and an ultrasound after confirming some nodularity in the women’s breast. A radiologist twice reported no abnormalities which Dr. Minkina relayed to the patient, advising her to follow-up with her primary care physician and to schedule yearly mammograms. The patient did neither, according to court records. Dr. Minkina left the practice shortly after the visit.
In early 2006, the patient visited the practice, and a nurse practitioner sent her for another mammogram and an ultrasound. The mammogram report included some signs of malignancy, but the nurse misread, misunderstood, or overlooked the signs and recorded that “the benign breast condition had no changes,” according to court transcripts. Later that year, the patient visited the practice complaining of headaches and a droopy eye at which time her primary care physician diagnosed sinusitis and prescribed antibiotics. In 2007, the patient underwent a brain MRI and a breast MRI, which revealed widespread metastatic carcinoma. She and her family sued Dr. Minkina and several others in June 2007. The patient died in 2008.
The agreement between parties ends there. Dr. Minkina believes she followed the standard of care and was not responsible for the delayed breast cancer diagnosis. Given the radiologist’s negative report and the patient’s lack of visual abnormalities, she contends she adequately referred the patient to her primary care physician for further consultation and evaluation. Dr. Minkina argues the insurer allocated an unjustifiably high percentage of liability to her because she was no longer an insured and because the company had an economic incentive to allocate a disproportionate percentage of responsibility and damages.
ProMutual contends Dr. Minkina bore more responsibility than the other health care professionals named for the delayed diagnosis because of violations of standards of care and because of causation factors. The insurer’s experts asserted that when treating an older woman with a palpable lump, the standard of care is to obtain a biopsy, according to opening arguments by ProMutual defense counsel Tamara Wolfson.
The experts also concluded that, when the nurse practitioner and primary care physician saw the patient in 2006, the patient would have already had metastatic disease, and a cancer diagnosis at that time would not have saved her, according to court transcripts. Had the cancer been diagnosed in 2002 when Dr. Minkina saw the patient, the disease would have been “very treatable,” the experts further concluded.
“So, faced with negative opinions on both the standard of care and causation, [the claim representative] was very concerned that Dr. Minkina not only faced a very substantial risk of an adverse verdict in the ... suit, but a verdict that would exceed Dr. Minkina’s policy limits,” Ms. Wolfson said during opening arguments.
The evidence led to the settlement and the allocation decision, Ms. Wolfson said, adding that the majority – 60% – fell on Blue Hills Medical Associates because it lacked a good system to track and follow up with patients. There was zero benefit to ProMutual as to how the $500,000 settlement was parsed, she said during trial.
A lower court initially dismissed Dr. Minkina’s suit, but the Commonwealth of Massachusetts Appeals Court in 2015 overturned that decision, ruling the case could move forward. In 2018, the superior court agreed Dr. Minkina had a valid bad faith claim, stating that she had provided information about ProMutual’s conduct from which “a reasonable juror could infer the defendant’s bad faith in connection with its settling the underlying malpractice suit, including the allocation of liability.”
Dr. Minkina had been a plaintiff in unrelated litigation in the past. In 2005, she sued her former employer for alleged discrimination and retaliation after claiming she was mistreated and terminated for complaining about fumes. She prevailed and was awarded an arbitration award of about $266,000. In 2009, Dr. Minkina sued the original law firm that represented her in the discrimination suit for malpractice, alleging the firm’s negligence cost her the chance to go to trial. A judge dismissed the claim as frivolous and ordered Dr. Minkina to pay the firm’s legal fees. The doctor twice has been jailed for failing to fully resolve that legal payment. The case remains outstanding, and Dr. Minkina is now in bankruptcy.
What’s in an allocation?
Liability allocations are an integral part of multiparty medical malpractice claims, said Brian Atchinson, president and CEO for the Medical Professional Liability Association, a trade association for medical liability insurers.
“In any case involving more than one party, there is a potential allocation issue,” Mr. Atchinson said in an interview. “[Insurers] generally look to the liability and damages incurred with regard to their respective insureds in a case and work to establish an allocation that reflects actual liability.”
If the case goes to a jury and jurors find for the plaintiff, depending on the nature of the damages awarded, the jury may be called on to allocate liability among multiple defendants, he said.
Because settlements are reported to the National Practitioner Data Bank (NPDB), the proportion of liability assigned to each defendant has significance, said J. Richard Moore, a medical liability defense attorney based in Indianapolis and chair for the Defense Research Institute’s Medical Liability and Health Care Law Committee.
“The allocation matters because the amount of settlement matters,” Mr. Moore said. “A lower settlement amount suggests the physician’s insurance company made a cost-benefit business decision to end litigation without more expense, while an extremely high settlement suggests actual malpractice.”
State medical boards have varying reporting requirements. Some state boards require both the amount paid by the individual provider and the global settlement amount – if known – while other state boards require only the amount paid on behalf of the provider.
Conflicts over allocations are not common, Dr. Segal said. More frequent are disputes among physicians and insurers over the potential settling of a claim. Such conflicts underscore the importance of paying close attention to contract language when signing with an insurer, Dr. Segal said.
Whether the contract includes a consent to settle clause, for example, can markedly change the case outcome. The clause means the insurer must have the doctor’s approval to settle the case. Absent the clause, insurers generally have authority to settle all claims arising under the policy.
Other contracts may include a “hammer clause,” Dr. Segal notes. This gives doctors the ultimate vote on settling, but it stipulates that if the physician refuses a settlement offer and opts for trial, the doctor is responsible for any surplus award, should the doctor lose.
In Dr. Minkina’s case, the doctor’s contract allowed ProMutual to settle without her consent, but the contract was silent on allocations.
Dr. Segal and Mr. Moore both said the odds of Dr. Minkina prevailing are fairly low. In another case, a South Carolina doctor similarly sued the South Carolina Medical Malpractice Liability Joint Underwriting Association over an allocation of liability following a settlement. The doctor claimed he should not be assigned any portion of the $500,000 settlement, and he sued after his insurer assigned him one-seventh liability.
A trial court found in his favor, ruling the insurer breached the covenant of good faith and fair dealing by failing to treat each physician equally when determining liability. The Supreme Court of South Carolina in 2001 overturned that decision, finding the evidence did not support a bad faith finding and that the insurer’s allocation decision was reasonable.
If the Massachusetts case ends in Dr. Minkina’s favor, it will be as a result of strong evidence that the insurer placed its interests ahead of the physician’s financial and other interests, Mr. Moore said.
“If that happens, I anticipate that insurers may revise their standard policy provisions to clarify and limit the extent to which physicians have the right to be involved in allocation decisions,” he said.
When the summons arrived, Nataly Minkina, MD, took one look at the lawsuit and fainted.
The Boston-area internist had treated the plaintiff just once while covering for the patient’s primary care physician. During a visit for an upper respiratory infection, the patient mentioned a lump in her breast, and Dr. Minkina confirmed a small thickening in the woman’s right breast. She sent the patient for a mammogram and ultrasound, the results of which the radiologist reported were normal, according to court documents.
Five years later, the patient claimed Dr. Minkina was one of several providers responsible for a missed breast cancer diagnosis.
Even worse than the lawsuit, however, was how her former insurer resolved the case, said Dr. Minkina, now an internist at Brigham and Women’s Hospital in Chestnut Hill, Mass. The claim was settled against the defendants for $500,000, and Dr. Minkina was alloted 30% of the liability. No fault was assigned to the other physicians named, while a nurse practitioner was alloted 10%, and the medical practice was alloted 60% liability, according to court documents.
“I was very upset,” Dr. Minkina said. “First of all, I was kept in the dark. Nobody ever talked to me. I did not get a single report or any document from my attorney in 12 months. When I asked why was I assigned the [30%] liability, they said the experts gave me bad evaluations, but they would not show reports to me. I was literally scapegoated.”
When the insurer refused to reconsider the allocation, Dr. Minkina took her complaint to court. The internist now has been embroiled in a legal challenge against Medical Professional Mutual Insurance Company (ProMutual) for 7 years. Dr. Minkina’s lawsuit alleges the insurer engaged in a bad faith allocation to serve its own economic interests by shifting fault for the claim from its insureds to its former client, Dr. Minkina. The insurance company contends the allocation was a careful and rational decision based on case evidence. In late July, the case went to trial in Dedham, Mass.
ProMutual declined comment on the case; the insurer also would not address general questions about its allocation policies.
“I started this fight because I felt violated and betrayed, not to make money,” Dr. Minkina said. “I am not rich by a long shot, and I wanted to clear my name because [a] good name is all I have. Additionally, having [a] record about malpractice payment in my physician profile makes me vulnerable.”
Liability experts say the case highlights the conflicts that can arise between physicians and insurers during malpractice lawsuits. The legal challenge also raises questions about allocations of liability by insurers, how the determinations are made, and what impact they have on doctors going forward.
The proportion of liability assigned after a settlement matters, said Jeffrey Segal, MD, JD, a neurosurgeon and founder of Medical Justice, a medicolegal consulting firm for physicians.
“There’s a subtext that your piece of the pie – the part that is allocated to you – is your liability, your culpability, your guilt,” Dr. Segal said in an interview. “This has impact going down the road in terms of reputation, in terms of credibility, and potentially of your premiums going forward. There are some real-world economic consequences.”
Bad care or bad faith?
In Dr. Minkina’s case, some facts are undisputed. In 2002, Dr. Minkina, then a physician at Blue Hills Medical Associates in Braintree, Mass., referred a 55-year-old patient for a mammogram and an ultrasound after confirming some nodularity in the women’s breast. A radiologist twice reported no abnormalities which Dr. Minkina relayed to the patient, advising her to follow-up with her primary care physician and to schedule yearly mammograms. The patient did neither, according to court records. Dr. Minkina left the practice shortly after the visit.
In early 2006, the patient visited the practice, and a nurse practitioner sent her for another mammogram and an ultrasound. The mammogram report included some signs of malignancy, but the nurse misread, misunderstood, or overlooked the signs and recorded that “the benign breast condition had no changes,” according to court transcripts. Later that year, the patient visited the practice complaining of headaches and a droopy eye at which time her primary care physician diagnosed sinusitis and prescribed antibiotics. In 2007, the patient underwent a brain MRI and a breast MRI, which revealed widespread metastatic carcinoma. She and her family sued Dr. Minkina and several others in June 2007. The patient died in 2008.
The agreement between parties ends there. Dr. Minkina believes she followed the standard of care and was not responsible for the delayed breast cancer diagnosis. Given the radiologist’s negative report and the patient’s lack of visual abnormalities, she contends she adequately referred the patient to her primary care physician for further consultation and evaluation. Dr. Minkina argues the insurer allocated an unjustifiably high percentage of liability to her because she was no longer an insured and because the company had an economic incentive to allocate a disproportionate percentage of responsibility and damages.
ProMutual contends Dr. Minkina bore more responsibility than the other health care professionals named for the delayed diagnosis because of violations of standards of care and because of causation factors. The insurer’s experts asserted that when treating an older woman with a palpable lump, the standard of care is to obtain a biopsy, according to opening arguments by ProMutual defense counsel Tamara Wolfson.
The experts also concluded that, when the nurse practitioner and primary care physician saw the patient in 2006, the patient would have already had metastatic disease, and a cancer diagnosis at that time would not have saved her, according to court transcripts. Had the cancer been diagnosed in 2002 when Dr. Minkina saw the patient, the disease would have been “very treatable,” the experts further concluded.
“So, faced with negative opinions on both the standard of care and causation, [the claim representative] was very concerned that Dr. Minkina not only faced a very substantial risk of an adverse verdict in the ... suit, but a verdict that would exceed Dr. Minkina’s policy limits,” Ms. Wolfson said during opening arguments.
The evidence led to the settlement and the allocation decision, Ms. Wolfson said, adding that the majority – 60% – fell on Blue Hills Medical Associates because it lacked a good system to track and follow up with patients. There was zero benefit to ProMutual as to how the $500,000 settlement was parsed, she said during trial.
A lower court initially dismissed Dr. Minkina’s suit, but the Commonwealth of Massachusetts Appeals Court in 2015 overturned that decision, ruling the case could move forward. In 2018, the superior court agreed Dr. Minkina had a valid bad faith claim, stating that she had provided information about ProMutual’s conduct from which “a reasonable juror could infer the defendant’s bad faith in connection with its settling the underlying malpractice suit, including the allocation of liability.”
Dr. Minkina had been a plaintiff in unrelated litigation in the past. In 2005, she sued her former employer for alleged discrimination and retaliation after claiming she was mistreated and terminated for complaining about fumes. She prevailed and was awarded an arbitration award of about $266,000. In 2009, Dr. Minkina sued the original law firm that represented her in the discrimination suit for malpractice, alleging the firm’s negligence cost her the chance to go to trial. A judge dismissed the claim as frivolous and ordered Dr. Minkina to pay the firm’s legal fees. The doctor twice has been jailed for failing to fully resolve that legal payment. The case remains outstanding, and Dr. Minkina is now in bankruptcy.
What’s in an allocation?
Liability allocations are an integral part of multiparty medical malpractice claims, said Brian Atchinson, president and CEO for the Medical Professional Liability Association, a trade association for medical liability insurers.
“In any case involving more than one party, there is a potential allocation issue,” Mr. Atchinson said in an interview. “[Insurers] generally look to the liability and damages incurred with regard to their respective insureds in a case and work to establish an allocation that reflects actual liability.”
If the case goes to a jury and jurors find for the plaintiff, depending on the nature of the damages awarded, the jury may be called on to allocate liability among multiple defendants, he said.
Because settlements are reported to the National Practitioner Data Bank (NPDB), the proportion of liability assigned to each defendant has significance, said J. Richard Moore, a medical liability defense attorney based in Indianapolis and chair for the Defense Research Institute’s Medical Liability and Health Care Law Committee.
“The allocation matters because the amount of settlement matters,” Mr. Moore said. “A lower settlement amount suggests the physician’s insurance company made a cost-benefit business decision to end litigation without more expense, while an extremely high settlement suggests actual malpractice.”
State medical boards have varying reporting requirements. Some state boards require both the amount paid by the individual provider and the global settlement amount – if known – while other state boards require only the amount paid on behalf of the provider.
Conflicts over allocations are not common, Dr. Segal said. More frequent are disputes among physicians and insurers over the potential settling of a claim. Such conflicts underscore the importance of paying close attention to contract language when signing with an insurer, Dr. Segal said.
Whether the contract includes a consent to settle clause, for example, can markedly change the case outcome. The clause means the insurer must have the doctor’s approval to settle the case. Absent the clause, insurers generally have authority to settle all claims arising under the policy.
Other contracts may include a “hammer clause,” Dr. Segal notes. This gives doctors the ultimate vote on settling, but it stipulates that if the physician refuses a settlement offer and opts for trial, the doctor is responsible for any surplus award, should the doctor lose.
In Dr. Minkina’s case, the doctor’s contract allowed ProMutual to settle without her consent, but the contract was silent on allocations.
Dr. Segal and Mr. Moore both said the odds of Dr. Minkina prevailing are fairly low. In another case, a South Carolina doctor similarly sued the South Carolina Medical Malpractice Liability Joint Underwriting Association over an allocation of liability following a settlement. The doctor claimed he should not be assigned any portion of the $500,000 settlement, and he sued after his insurer assigned him one-seventh liability.
A trial court found in his favor, ruling the insurer breached the covenant of good faith and fair dealing by failing to treat each physician equally when determining liability. The Supreme Court of South Carolina in 2001 overturned that decision, finding the evidence did not support a bad faith finding and that the insurer’s allocation decision was reasonable.
If the Massachusetts case ends in Dr. Minkina’s favor, it will be as a result of strong evidence that the insurer placed its interests ahead of the physician’s financial and other interests, Mr. Moore said.
“If that happens, I anticipate that insurers may revise their standard policy provisions to clarify and limit the extent to which physicians have the right to be involved in allocation decisions,” he said.
When the summons arrived, Nataly Minkina, MD, took one look at the lawsuit and fainted.
The Boston-area internist had treated the plaintiff just once while covering for the patient’s primary care physician. During a visit for an upper respiratory infection, the patient mentioned a lump in her breast, and Dr. Minkina confirmed a small thickening in the woman’s right breast. She sent the patient for a mammogram and ultrasound, the results of which the radiologist reported were normal, according to court documents.
Five years later, the patient claimed Dr. Minkina was one of several providers responsible for a missed breast cancer diagnosis.
Even worse than the lawsuit, however, was how her former insurer resolved the case, said Dr. Minkina, now an internist at Brigham and Women’s Hospital in Chestnut Hill, Mass. The claim was settled against the defendants for $500,000, and Dr. Minkina was alloted 30% of the liability. No fault was assigned to the other physicians named, while a nurse practitioner was alloted 10%, and the medical practice was alloted 60% liability, according to court documents.
“I was very upset,” Dr. Minkina said. “First of all, I was kept in the dark. Nobody ever talked to me. I did not get a single report or any document from my attorney in 12 months. When I asked why was I assigned the [30%] liability, they said the experts gave me bad evaluations, but they would not show reports to me. I was literally scapegoated.”
When the insurer refused to reconsider the allocation, Dr. Minkina took her complaint to court. The internist now has been embroiled in a legal challenge against Medical Professional Mutual Insurance Company (ProMutual) for 7 years. Dr. Minkina’s lawsuit alleges the insurer engaged in a bad faith allocation to serve its own economic interests by shifting fault for the claim from its insureds to its former client, Dr. Minkina. The insurance company contends the allocation was a careful and rational decision based on case evidence. In late July, the case went to trial in Dedham, Mass.
ProMutual declined comment on the case; the insurer also would not address general questions about its allocation policies.
“I started this fight because I felt violated and betrayed, not to make money,” Dr. Minkina said. “I am not rich by a long shot, and I wanted to clear my name because [a] good name is all I have. Additionally, having [a] record about malpractice payment in my physician profile makes me vulnerable.”
Liability experts say the case highlights the conflicts that can arise between physicians and insurers during malpractice lawsuits. The legal challenge also raises questions about allocations of liability by insurers, how the determinations are made, and what impact they have on doctors going forward.
The proportion of liability assigned after a settlement matters, said Jeffrey Segal, MD, JD, a neurosurgeon and founder of Medical Justice, a medicolegal consulting firm for physicians.
“There’s a subtext that your piece of the pie – the part that is allocated to you – is your liability, your culpability, your guilt,” Dr. Segal said in an interview. “This has impact going down the road in terms of reputation, in terms of credibility, and potentially of your premiums going forward. There are some real-world economic consequences.”
Bad care or bad faith?
In Dr. Minkina’s case, some facts are undisputed. In 2002, Dr. Minkina, then a physician at Blue Hills Medical Associates in Braintree, Mass., referred a 55-year-old patient for a mammogram and an ultrasound after confirming some nodularity in the women’s breast. A radiologist twice reported no abnormalities which Dr. Minkina relayed to the patient, advising her to follow-up with her primary care physician and to schedule yearly mammograms. The patient did neither, according to court records. Dr. Minkina left the practice shortly after the visit.
In early 2006, the patient visited the practice, and a nurse practitioner sent her for another mammogram and an ultrasound. The mammogram report included some signs of malignancy, but the nurse misread, misunderstood, or overlooked the signs and recorded that “the benign breast condition had no changes,” according to court transcripts. Later that year, the patient visited the practice complaining of headaches and a droopy eye at which time her primary care physician diagnosed sinusitis and prescribed antibiotics. In 2007, the patient underwent a brain MRI and a breast MRI, which revealed widespread metastatic carcinoma. She and her family sued Dr. Minkina and several others in June 2007. The patient died in 2008.
The agreement between parties ends there. Dr. Minkina believes she followed the standard of care and was not responsible for the delayed breast cancer diagnosis. Given the radiologist’s negative report and the patient’s lack of visual abnormalities, she contends she adequately referred the patient to her primary care physician for further consultation and evaluation. Dr. Minkina argues the insurer allocated an unjustifiably high percentage of liability to her because she was no longer an insured and because the company had an economic incentive to allocate a disproportionate percentage of responsibility and damages.
ProMutual contends Dr. Minkina bore more responsibility than the other health care professionals named for the delayed diagnosis because of violations of standards of care and because of causation factors. The insurer’s experts asserted that when treating an older woman with a palpable lump, the standard of care is to obtain a biopsy, according to opening arguments by ProMutual defense counsel Tamara Wolfson.
The experts also concluded that, when the nurse practitioner and primary care physician saw the patient in 2006, the patient would have already had metastatic disease, and a cancer diagnosis at that time would not have saved her, according to court transcripts. Had the cancer been diagnosed in 2002 when Dr. Minkina saw the patient, the disease would have been “very treatable,” the experts further concluded.
“So, faced with negative opinions on both the standard of care and causation, [the claim representative] was very concerned that Dr. Minkina not only faced a very substantial risk of an adverse verdict in the ... suit, but a verdict that would exceed Dr. Minkina’s policy limits,” Ms. Wolfson said during opening arguments.
The evidence led to the settlement and the allocation decision, Ms. Wolfson said, adding that the majority – 60% – fell on Blue Hills Medical Associates because it lacked a good system to track and follow up with patients. There was zero benefit to ProMutual as to how the $500,000 settlement was parsed, she said during trial.
A lower court initially dismissed Dr. Minkina’s suit, but the Commonwealth of Massachusetts Appeals Court in 2015 overturned that decision, ruling the case could move forward. In 2018, the superior court agreed Dr. Minkina had a valid bad faith claim, stating that she had provided information about ProMutual’s conduct from which “a reasonable juror could infer the defendant’s bad faith in connection with its settling the underlying malpractice suit, including the allocation of liability.”
Dr. Minkina had been a plaintiff in unrelated litigation in the past. In 2005, she sued her former employer for alleged discrimination and retaliation after claiming she was mistreated and terminated for complaining about fumes. She prevailed and was awarded an arbitration award of about $266,000. In 2009, Dr. Minkina sued the original law firm that represented her in the discrimination suit for malpractice, alleging the firm’s negligence cost her the chance to go to trial. A judge dismissed the claim as frivolous and ordered Dr. Minkina to pay the firm’s legal fees. The doctor twice has been jailed for failing to fully resolve that legal payment. The case remains outstanding, and Dr. Minkina is now in bankruptcy.
What’s in an allocation?
Liability allocations are an integral part of multiparty medical malpractice claims, said Brian Atchinson, president and CEO for the Medical Professional Liability Association, a trade association for medical liability insurers.
“In any case involving more than one party, there is a potential allocation issue,” Mr. Atchinson said in an interview. “[Insurers] generally look to the liability and damages incurred with regard to their respective insureds in a case and work to establish an allocation that reflects actual liability.”
If the case goes to a jury and jurors find for the plaintiff, depending on the nature of the damages awarded, the jury may be called on to allocate liability among multiple defendants, he said.
Because settlements are reported to the National Practitioner Data Bank (NPDB), the proportion of liability assigned to each defendant has significance, said J. Richard Moore, a medical liability defense attorney based in Indianapolis and chair for the Defense Research Institute’s Medical Liability and Health Care Law Committee.
“The allocation matters because the amount of settlement matters,” Mr. Moore said. “A lower settlement amount suggests the physician’s insurance company made a cost-benefit business decision to end litigation without more expense, while an extremely high settlement suggests actual malpractice.”
State medical boards have varying reporting requirements. Some state boards require both the amount paid by the individual provider and the global settlement amount – if known – while other state boards require only the amount paid on behalf of the provider.
Conflicts over allocations are not common, Dr. Segal said. More frequent are disputes among physicians and insurers over the potential settling of a claim. Such conflicts underscore the importance of paying close attention to contract language when signing with an insurer, Dr. Segal said.
Whether the contract includes a consent to settle clause, for example, can markedly change the case outcome. The clause means the insurer must have the doctor’s approval to settle the case. Absent the clause, insurers generally have authority to settle all claims arising under the policy.
Other contracts may include a “hammer clause,” Dr. Segal notes. This gives doctors the ultimate vote on settling, but it stipulates that if the physician refuses a settlement offer and opts for trial, the doctor is responsible for any surplus award, should the doctor lose.
In Dr. Minkina’s case, the doctor’s contract allowed ProMutual to settle without her consent, but the contract was silent on allocations.
Dr. Segal and Mr. Moore both said the odds of Dr. Minkina prevailing are fairly low. In another case, a South Carolina doctor similarly sued the South Carolina Medical Malpractice Liability Joint Underwriting Association over an allocation of liability following a settlement. The doctor claimed he should not be assigned any portion of the $500,000 settlement, and he sued after his insurer assigned him one-seventh liability.
A trial court found in his favor, ruling the insurer breached the covenant of good faith and fair dealing by failing to treat each physician equally when determining liability. The Supreme Court of South Carolina in 2001 overturned that decision, finding the evidence did not support a bad faith finding and that the insurer’s allocation decision was reasonable.
If the Massachusetts case ends in Dr. Minkina’s favor, it will be as a result of strong evidence that the insurer placed its interests ahead of the physician’s financial and other interests, Mr. Moore said.
“If that happens, I anticipate that insurers may revise their standard policy provisions to clarify and limit the extent to which physicians have the right to be involved in allocation decisions,” he said.