Hospitals try new tack: Refer injured patients to attorneys

Maryland hospitals that offer such referrals say patients save time and expense. Skeptics caution about potential conflicts of interest and physicians facing added liability risk.

By — Posted March 5, 2012

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MedStar Health, one of the largest health care systems in Maryland, prides itself on being proactive when faced with accusations of medical negligence.

MedStar says it discusses with patients what happened during treatment, works toward a resolution and, when appropriate, proposes a settlement. But if patients decline to settle, the health system takes an unlikely next step: It offers them the name and number of a lawyer.

Providing such referrals can resolve cases more quickly and keep complaints from turning into long legal nightmares, MedStar officials say. The strategy also saves health professionals and patients legal expenses. The vetted attorneys agree to take patients' cases at a reduced rate.

"If the injury and the financial consequences of that injury are significant, we are much more comfortable knowing that the patient and their family have received independent outside legal counsel to help them make their decisions regarding resolution," MedStar said in a statement. "To this end, we have identified a small number of very seasoned, highly respected lawyers in the community who have impeccable reputations for being fair and honest."

Other health systems in Maryland also are referring patients to lawyers after a patient is injured. MedStar Health, LifeBridge Health and the University of Maryland Medical System -- which collectively run about two dozen hospitals -- have used the strategy. The idea is drawing praise and skepticism as a way to deal with potential medical liability.

Hospitals say the practice is good for patients, who often are unfamiliar with the legal system and want compensation for their injuries as soon as possible. But legal experts question whether patients are being misled by hospitals. They also wonder if attorneys on the list may have conflicts of interest and if doctors caught in the middle may end up paying a hefty legal cost.

"As a patient, why would you want that referral?" asked Karen M. McGovern, a Colorado medical liability defense attorney and a nurse for more than 20 years. "There's a reason these attorneys are being referred by the hospital. What I suspect is that this is an attorney who doesn't push the cases to trial and settles for lower amounts. Is that attorney going to make up the difference by going after the doctor?"

A quick resolution?

MedStar has kept a list of attorney referrals for patients since 2005, said Jean M. Hitchcock, a MedStar spokeswoman. The health system developed the list by contacting about 25 attorneys in the community that the hospital had worked with or knew to be highly respected.

The system does not keep track of how often the list is used. Hitchcock said patients accept the hospitals' attorney recommendations "infrequently."

LifeBridge Health, a multihospital health system in Baltimore, does not keep a formal directory like MedStar. Instead, it occasionally calls attorneys for plaintiffs during legal negotiations with patients and families, said Teri Kaufman Leonovich, associate general counsel for LifeBridge Health.

"A lot of times, in discussions with patients, they start asking you [for legal advice] as if you're a friend or colleague," Leonovich said. "You get into an ethical bind. Frankly, I've had family members or patients where I've said, 'I can't give you legal advice,' and their response has been, 'And I can't afford an attorney.' "

In such instances, Leonovich asks lawyers if they will represent the patient at a lower fee.

"Plaintiffs' attorneys have been very responsive and happy and willing to work with families," she said. "We have the same goal in trying to do right by people. The only thing we need to really do is come to an agreement as to what fair compensation is."

The attorney-referral idea could save legal costs for patients, hospitals and health professionals, said S. Allan Adelman, a Maryland attorney and past president of the American Health Lawyers Assn. But the move is risky, he added. For instance, a patient could sue the lawyer after a resolution is reached, alleging that the attorney was beholden to the hospital and did not fairly represent the patient's interests.

"The patient could come back and file a claim against the attorney, saying he sold them down the river because of a conflict of interest," Adelman said.

Susan A. Dennehy, a New York plaintiff attorney, questions whether patients would be served by accepting a hospital's attorney referral. "The concern would be if the patient didn't fully understand the extent of their injuries," she said. "Attorneys are not allowed to solicit clients, and it seems as if the hospital is kind of working with the plaintiffs' attorney to resolve the case in a way that's unorthodox."

The strategy is a reasonable approach to resolving medical liability claims, said Matthew Rice, MD, a Seattle emergency physician and attorney. He said injured patients often turn to the legal system when they feel ignored by medical staff. The attorney-referral strategy focuses on walking patients through the situation and, if necessary, connecting them with the legal guidance they deserve, he said.

"I can understand the patient or patient's family being reluctant" to accept the help, Dr. Rice said. "A [sentinel] event suggests there's going to be difficult feelings and frustration. By the same token, often patients are very trustful of medicine and hospitals. They're looking for answers."

He knows that many doctors fear litigation. The majority of physicians probably would be skeptical of an employer recommending an attorney to a patient who is accusing the doctor of negligence. But doctors should consider the bigger picture, he said.

"If you look at the way the medical malpractice system has traditionally worked, it's a very adversarial approach," Dr. Rice said. "We need to be more creative and constructive in how we resolve these disputes and find better ways of getting these issues resolved, so we can go back to focusing on how to provide health care to the many people who need it."

Idea could hurt doctors

McGovern, the Colorado defense attorney, worries that hospital-based doctors are at risk for costlier lawsuits if patients accept the hospitals' attorney referrals.

"If [an attorney] is taking the case at a reduced fee, then the attorney is going to be looking to recoup the money that he could have made and looking to get his clients the money he thinks they deserve," she said. "I think he would go after the doctor. You go after the deepest pockets."

Maryland attorney Brian Nash doesn't see anything wrong with the health systems' legal approach. He has represented plaintiffs and doctors in medical liability cases and has been referred through MedStar's lawyer list.

"The lawyers may make less, as does the cottage industry associated with litigation, but it truly is a loss that is well worth the price to get these matters resolved fairly, economically and timely," Nash said in an email. "It is perhaps a form of tort reform that works for not only the health care industry but, more importantly, for the injured patients and families."

The Maryland State Medical Assn. does not see the attorney-referral idea as a practical tort reform solution, said Gene M. Ransom, CEO of the medical association.

"We have not had good experiences with trial attorneys, and we believe many of the cases that are brought are questionable at best," Ransom said. "We're not going to work with lawyers until they want to work on real reform. I'm not holding my breath."

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