What Are the Hidden Costs of a Medical Malpractice Case?

The costs of a medical malpractice case can extend well beyond attorney fees, settlements, and jury awards. However, the burden can extend far beyond these visible expenses. Even when a claim is dismissed or a clinician prevails, litigation can consume time, disrupt practice operations, affect professional relationships, and take a substantial personal toll.

Key Takeaways

• Malpractice litigation can result in lost clinical time and revenue.
• Claims can create additional workload for both clinicians and practice staff.
• The emotional effects can extend into a clinician's personal life.
• Insurance coverage may not address every cost associated with a claim.
• Certain malpractice payments may create additional reporting obligations and affect credentialing reviews.

How can a malpractice case affect a clinician's time and revenue?

Defending a malpractice claim requires active participation. Clinicians may spend hours reviewing records, meeting with attorneys, preparing for depositions, and attending proceedings. These responsibilities can mean canceled appointments, postponed procedures, and fewer available patient visits.

Additionally, staff may be needed to retrieve records, locate correspondence, organize documents, and coordinate schedules with the defense team. In a small practice, these additional tasks may necessitate overtime or temporary assistance costs.

All the time required because of a malpractice claim may negatively impact clinical revenue.

How can a malpractice claim affect a clinician's well-being and family life?

The emotional burden of a malpractice claim can include psychological distress, depression, burnout, and diminished career satisfaction.

The effect of this emotional burden extends into the clinician's personal life. Counseling, time away from work, and support from appropriate personal and professional resources may become important parts of coping with the experience.

Can a malpractice claim affect a clinician's reputation and professional opportunities?

Clinicians may worry about how allegations will affect patient trust, referral relationships, and future employment. The extent of any actual reputational harm varies, but the concern itself can be significant.

Does malpractice insurance cover all of the costs associated with a claim?

Not necessarily. Coverage details matter. Deductibles, exclusions, and policy limits determine which expenses remain the clinician's responsibility. Clinicians should review these provisions before a claim arises and ask specifically about reimbursement for required attendance and lost earnings.

What reporting obligations can result from a malpractice case?

Certain malpractice payments also carry reporting consequences. Generally, an insurer or other entity making a payment on a practitioner's behalf to resolve a written malpractice claim must report it to the National Practitioner Data Bank. Such a report can add documentation and explanation requirements during subsequent credentialing reviews.

How can clinicians prepare for the less obvious costs of malpractice litigation?

Preparing for these costs requires attention to both practice operations and clinician well-being. Reviewing coverage, planning for staff workload, and obtaining appropriate support can help a practice manage the demands of litigation while maintaining reliable patient care.

FAQs

Can a malpractice case create costs even if the clinician wins?

Yes. Even when a claim is dismissed or a clinician prevails, litigation can consume time, disrupt practice operations, affect professional relationships, and take a personal toll.

How can a malpractice claim affect practice revenue?

Time spent reviewing records, meeting with attorneys, preparing for depositions, and participating in proceedings may lead to canceled appointments, postponed procedures, and fewer patient visits.

Does malpractice insurance reimburse doctors for lost earnings?

Coverage varies by policy. Clinicians should review their policy provisions and determine whether reimbursement for required attendance or lost earnings is included.

Are malpractice payments reported to the National Practitioner Data Bank?

Generally, when an insurer or other entity makes a payment on a practitioner's behalf to resolve a written malpractice claim, the payment must be reported to the National Practitioner Data Bank.

What should clinicians do before a malpractice claim occurs?

Clinicians should understand their insurance coverage, consider how their practice would manage additional staff workload and operational disruption, and be aware of appropriate personal and professional support resources.

Looking for more guidance? Explore our risk management resources. If you're not currently insured with OUM, fill out our online form to receive a free, no-obligation quote.

References
1.    Mello MM, Chandra A, Gawande AA, Studdert DM. National costs of the medical liability system. Health Affairs. 2010;29(9):1569–1577.
https://pmc.ncbi.nlm.nih.gov/articles/PMC3048809/ 
2.    American College of Emergency Physicians. Litigation Stress—A Primer.
https://www.acep.org/life-as-a-physician/ethics--legal/medical-legal2/litigation-stress---a-primer/ 
3.    Balch CM, Oreskovich MR, Dyrbye LN, Colaiano JM, Satele DV, Sloan JA, Shanafelt TD. Personal consequences of malpractice lawsuits on American surgeons. J Am Coll Surg. 2011 Nov;213(5):657-67. doi: 10.1016/j.jamcollsurg.2011.08.005. Epub 2011 Sep 3. PMID: 21890381. 
Personal consequences of malpractice lawsuits on American surgeons - PubMed
4.    Health Resources and Services Administration. National Practitioner Data Bank Guidebook: Reporting Medical Malpractice Payments.
https://www.npdb.hrsa.gov/guidebook/EMMPR.jsp

Disclaimer: “OUM” and “OUM Chiropractor Program” do not refer to a legal entity or insurance company but to a program or symbol of a program underwritten, insured, and administered by ProAssurance Insurance Company of America. The information contained on the OUM Chiropractor Blog does not establish a standard of care, nor does it constitute legal advice. The information is for general informational purposes only. We encourage all blog visitors to consult with their personal attorneys for legal advice, as specific legal requirements may vary from state to state. Links or references to organizations, websites, or other information is for reference use only and do not constitute the rendering of legal, financial, or other professional advice or recommendations. In the event any of the information presented conflicts with the terms and conditions of any policy of insurance offered by ProAssurance Insurance Company of America, the terms and conditions of the actual policy will apply. All information contained on the blog is subject to change.