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Wrongful Death Claims: Tragic, Complex, and Expensive

Paul Weber, JD, OMIC Vice President of Risk Management/Legal

Digest, Summer 2012

Wrongful death claims are some of the most tragic, complex, and expensive malpractice litigation that OMIC handles. They are tragic because a grieving spouse or, perhaps, a bereft parent, claims the insured’s negligence actually caused the death of their loved one. These lawsuits are legally complex because they usually involve multiple plaintiffs (family members) suing multiple defendants who are alleged to have caused or contributed to the death of the loved one. In wrongful death cases against physicians, the plaintiff must still prove all the elements of a medical negligence case, i.e., duty, breach, causation, and damages. These cases can become very expensive, very quickly, as numerous expert witnesses are retained by both sides to prove or disprove whose negligence, if any, caused the patient’s death.

Lending to the complexity of these lawsuits, almost all states have statutes that actually provide for two types of legal actions, often combined in one lawsuit, that may be brought against a physician who allegedly has caused the death of a patient. One action is a claim for wrongful death and the other is a survivor or survival action. The wrongful death action is brought by close family members (e.g., spouse, parent, child) to recover damages for loss of value of the decedent’s future earnings/contributions and personal services, loss of the decedent’s society and companionship, and pain and suffering arising from the death of the patient. A survival action (somewhat misnamed, since it is only available after someone has died) is pursued by the estate of the deceased patient to recover damages sustained by the decedent prior to death, such as medical expenses, loss of earnings, and pain and suffering. As stated above, the two actions are often combined into what will be referred to in this article as a “wrongful death” claim.

Wrongful death claims are relatively rare against ophthalmologists. They account for only 2.4% of all claims against OMIC insureds and 2.6% of claims against ophthalmologists in the Physician Insurers Association of America Data Sharing Project1 database. This relatively small percentage is quite notable because over 24% of claims against all specialties combined in the PIAA database involved the death of the patient. The vast majority of death-related claims in the PIAA database arise from pregnancy, malignant neoplasms of the female breast, symptoms involving the abdomen/pelvis, and acute myocardial infarct—conditions that seldom involve ophthalmologists.

There is little difference, however, in the average indemnity payment in wrongful death cases. According to the PIAA data, the average is $236,000 for ophthalmologists and $243,000 for all specialties combined. OMIC’s average indemnity for a wrongful death claim is somewhat higher than PIAA’s at $295,000 and is nearly twice the $156,000 average for OMIC’s non-death-related claims.

The two most frequent—and expensive—allegations against ophthalmologists in wrongful death lawsuits are improper performance of treatment or procedure and failure to diagnose (see Frequency and Severity chart below). This issue’s Closed Claim Study and Risk Management Hotline provide helpful risk management suggestions to minimize liability risk related to improper performance of surgery/procedure and related emergencies that occur in the hospital, ASC, or office procedure area. Wrongful death cases related to diagnostic error are quite different and frequently involve many providers, often over an extended period of time. In diagnostic-related cases, good documentation and communication among providers is often the best risk management practice to minimize adverse outcomes and the best defense if a lawsuit arises.

Case Study 1—Failure to Diagnose

One OMIC wrongful death lawsuit alleging diagnostic error involved an insured who saw the patient for complaints of swelling OU on January 2, 1995. The differential diagnosis was post-herpetic neuralgia versus sinusitis. The insured ordered a CT scan, which showed probable orbital lymphoma, and consulted with an oncologist and ENT specialist. Upon review of the CT scan, there was a discussion between the oncologist and ENT specialist about whether to get a biopsy. The patient was referred to a radiation oncologist, who began treatment of the left orbit and paranasal sinuses for presumed lymphoma without taking a biopsy. Although the insured testified that he was not involved in the decision to treat the mass or take a biopsy, the records and testimony of the ENT specialist and radiation oncologist indicated they had such conversations with him. The first oncologist had no specific recollection of any conversation with the insured regarding taking a biopsy.

On January 18, one week after radiation treatment started, the patient complained of swelling OU and was treated with prednisone and Tylenol. These symptoms were believed to be due to the radiation treatments. At a visit with the insured one month later on February 15, swelling was down, the eyes were quiet, and visually acuity was 20/20 OS. On February 28, when the patient was seen again by the insured, visual acuity in the left eye had decreased to 20/50 OS. The insured consulted with the oncologist; based on the CT scan, it appeared the lymphoma had regressed from the radiation. The patient was continued on steroids and warm compresses. On March 16, when the patient was seen again, swelling on the left side had increased, IOP was 38, and visual acuity was 20/80 OS. Again, the insured consulted the oncologist and adjusted the oral steroid dose. Two days later, swelling had decreased and IOP was 12 OS.

On April 1, the patient returned to the insured with reduced vision to light perception only OS. The left pupil was 4 mm and fixed. On April 2, a biopsy was taken using the transethmoidal approach and the patient was diagnosed with a fungal (Aspergillus) infection. The insured removed the patient’s left eye to help with treatment of the fungal infection. The patient died on May 21. An autopsy was conducted and the cause of death was listed as an Aspergillus infection. The fungus infection had caused the hematoma in the left frontal lobe, leading to cerebral edema and uncal herniation. There was no evidence of lymphoma at autopsy. The pathologist estimated the Aspergillus had been present in the cranial cavity anywhere from days to weeks.

The plaintiffs in this case were the widow of the patient and two adult children. They brought a wrongful death lawsuit against the insured, the oncologist, the radiation oncologist, and the ENT specialist. The plaintiffs’ theory was that the Aspergillus infection was present in January or February and should have been diagnosed via biopsy and treated at that time. The plaintiff experts testified that had a correct and timely diagnosis been made, the patient would have survived the Aspergillus infection. The plaintiff retained eight expert witnesses. The defendants hired a similar number of experts.

The key expert witness for the insured was a nationally recognized oculoplastics surgeon. He believed the clinical symptoms encountered were consistent with orbital lymphoma, as opposed to a fungal type infection. He felt the patient would have developed a fever in January if a fungus infection had been present at that time. The oral steroid treatment in March caused the periorbital edema to subside, but the steroids would have made the infection worse if it was present at that time. Therefore, it seemed probable to the defense expert that the patient did not develop the fungal infection until sometime in April.

There were some problems facing the insured’s defense. The differing recollections regarding the January decision not to do a biopsy and the insured’s lack of documentation regarding his exact role in treatment of the lymphoma weakened his case by linking him more closely to the plaintiffs’ main liability theory that a biopsy should have been done. Another weak point in the defense was that the insured had the most contact with the plaintiff from January through April. The plaintiff expert argued that the insured continued to treat the patient despite getting poor results rather than refer him to another specialist. The defense thought this was a specious argument as the insured had consulted with the oncologist but believed it might be persuasive to a jury. Moreover, because the case would be tried in a very “plaintiff-friendly” venue, defense counsel put the plaintiffs’ chances of prevailing at trial at 50% and estimated that a plaintiff verdict would range from $1,000,000 to $2,500,000. Other defense attorneys suggested it could go as high as $8,000,000.

OMIC had spent over $180,000 working up the case for trial and had a very experienced defense attorney with an excellent understanding of the clinical issues in the case. However, the consensus of the insured, defense counsel, and OMIC staff was that the clinical issues in this particular case were quite complex, and it was too risky to rely on a jury to understand the roles and duties of the multiple providers. It was felt that they would all be tarred with the same brush. With the insured’s consent, OMIC paid $250,000 to settle the case. The total combined payment from all defendants was $1,300,000.

Case Study 2—Failure to Diagnose

The most frequent type of treatment/procedure arising in a wrongful death claim is the “medical evaluation” and the most frequent type of practice focus is “comprehensive ophthalmologist.” One diagnostic error case against a comprehensive ophthalmologist performing a medical evaluation involved a 42-year-old man first seen by the insured in May 1997 for vision problems. He had been examined in November 1996 by another ophthalmologist, who performed a visual field test that was diagnostic for glaucoma. The patient was placed on medication. In May 1997, the patient’s primary care physician referred him to the insured, who diagnosed bilateral pterygia. The insured also performed a visual field test in July 1997 but made no notations regarding his impressions or any differences between his fields and those taken by the earlier ophthalmologist, despite having those records available to him. In October 1997, the insured removed the pterygia. Two and a half months after this surgery, the patient returned to his PCP complaining of severe headaches. His PCP felt the headaches were migraine-related, but shortly thereafter, the patient presented to the emergency room with excruciating headache pain. He was discharged without a conclusive diagnosis. The next morning, he was found unconscious and taken to the hospital where he expired the following day. An autopsy revealed that death was due to a pituitary tumor hemorrhage. The widow and three minor children sued the insured, the earlier ophthalmologist, the PCP, two emergency room physicians, and the hospital.

It was difficult to find an expert witness willing to testify on behalf of the insured. The ophthalmologist had consecutive visual fields that showed an evolving bitemporal hemianopsia. Close review of the formal visual fields show combined arcuate glaucomatous changes and bitemporal hemianopsia. Expert witnesses and consultants in the case described the visual fields as showing “classic” signs of a pituitary tumor. One consultant presented the visual fields to a group of ophthalmology residents. They all diagnosed an intracranial lesion. While the insured testified that he reviewed and compared the visual fields, there was no record or documentation to support this. Nor was there any communication to either the patient or the family physician regarding the test results or contemplated follow-up.

The emergency room physicians and hospital were dismissed from the case based upon a strong causation defense that, by the time the patient came to the emergency room, it would have been too late to operate anyway since surgery or radiation therapy are only effective before the lesion hemorrhages. The family practice physician settled for approximately $100,000 and the earlier ophthalmologist settled for about $110,000. With the consent of the insured, OMIC paid $790,000 to settle the case.

These two case studies involving diagnostic errors highlight the importance of careful documentation and communication with colleagues. Review, date, and sign test results before they are filed in the medical record. Discuss them in letters sent to referring physicians, and provide patients with copies of test results. Follow up on missing results and missed appointments. See www.omic.com for recommendations on “Noncompliance” for sample tracking systems and letters to patients.

TABLE 1 – OMIC and PIAA Wrongful Death Statistics

Wrongful Death Claims

OMIC                    PIAA – OPHTHALMOLOGY           PIAA – ALL SPECIALTIES

Percent of all claims                        2.4%                      2.6%                                                      24%

Percent with indemnity                 24%                        24%                                                        30%

Average indemnity                         $295,000              $236,000                                              $243,000

TABLE 2 – Allegations in OMIC Wrongful Death Claims

Allegation                                                                            Number               Number Paid     Total Indemnity

Diagnostic Failure                                                             29                           8                              $3,430,000.00

Surgery – Improper Performance                             24                           4                              $1,100,000.00

Treatment/Procedure – Improper Performance  19                           5                              $988,750.00

Miscellaneous                                                                   10                           2                              $99,999.00

TOTAL                                                                                  82                           19                           $5,618,749.00

TABLE 3 – Treatment/Procedures in OMIC Wrongful Death Claims

Treatment Procedure                                                    Number               Number Paid     Total Indemnity

Medical Evaluation                                                          20                           7                              $2,185,000.00

Retina                                                                                   22                           4                              $1,375,000.00

Miscellaneous                                                                   12                           3                              $908,749.00

Oculoplastic                                                                        12                           2                              $790,000.00

Cataract                                                                               10                           2                              $210,000.00

Glaucoma                                                                            6                              1                              $150,000.00

TOTAL                                                                                   82                           19                           $5,618,749.00

TABLE 4 – Practice Focus of OMIC Insureds involved Wrongful Death Claims

Practice Focus                                                                   Number               Number Paid     Total Indemnity

Comprehensive                                                                32                           7                              $2,308,750.00

Retina                                                                                   18                           5                              $1,750,000.00

Entity                                                                                    17                           5                              $669,999.00

Glaucoma                                                                            3                              1                              $150,000.00

Oculoplastic                                                                        6                              1                              $740,000.00

Other                                                                                    6                              0                              $0.00

TOTAL                                                                                  82                           19                           $5,618,749.00

(Endnotes)

1              The PIAA Data Sharing Project is the largest independent source of professional liability claims loss data in the world. Since 1985, 267,713 closed claims have been reported to the database, including 7,600 reported claims against ophthalmologists. OMIC does not submit data to the PIAA Data Sharing Project.

Surgical Team Briefings Reduce Malpractice Risks

By Anne M. Menke, RN, PhD

OMIC Risk Manager

Digest, Fall 2011

Communication breakdowns are the primary cause of 70% of serious adverse events reported to The Joint Commission (TJC).1 Nowhere is clear and consistent communication more important than in the operating room. To facilitate the exchange of critical information among surgical team members, the World Health Organization (WHO) introduced a basic surgical checklist in 2008, proposing it as a method to “help ensure that teams consistently follow a few critical safety steps and thereby minimize the most common and avoidable risks endangering the lives and well-being of surgical patients.”2 The checklist divides surgical care into three phases: sign-in before anesthesia, time-out before incision, and sign-out before transfer from the OR to the post-anesthesia recovery room (PACU).

In addition to the elements of the universal protocol (identification of the patient, procedure, site, and side), the WHO time-out and sign-out include briefings from the surgeon, anesthesia provider, and nurse that—if consistently implemented—would prevent many malpractice claims reported to OMIC. The surgeon addresses critical or unexpected steps in the procedure, its planned duration, and the anticipated amount of blood loss. The anesthesia provider relates any patient-specific concerns such as cardiopulmonary diseases, arrhythmias, difficult airway, etc. The nurse confirms the sterility of the instruments and covers any equipment issues. This article discusses some ophthalmic-specific adaptations of the WHO surgical checklist prompted by OMIC’s claims experience. We were aided in our analysis of surgical team briefings by eye surgeons from Rush University Medical Center. OMIC Directors Steven V. L. Brown, MD, and Tamara R. Fountain, MD, along with their colleagues Jack Cohen, MD, Randy Epstein, MD, and Diany Morales, MD, presented their thoughts on critical steps in some ophthalmic surgeries to nurses and technicians who attended the 2010 ASORN annual meeting. With their permission and our thanks, some material from their talk is presented here, and supplemented with OMIC closed claims data and guidance from other resources.

Corneal Transplant Surgery

When all corneal transplantations involved performing a penetrating keratoplasty (PK) to place fullthickness grafts, there was less chance for confusion. In the early 2000s, ophthalmologists developed ways to remove and replace only the part of the cornea that was diseased or damaged. Dr. Randy Epstein explained that the corneal transplant surgeon now needs to verify the procedure and tissue type in the team briefing. The names for the surgical techniques can be confusing for team members unfamiliar with corneal anatomy but must be understood to ensure that the proper instruments and donor tissue are available. PK requires fullthickness donor tissue, while deep anterior lamellar keratoplasty (DALK), Descemet’s stripping automated endothelial keratoplasty (DSAEK), and Descemet’s membrane endothelial keratoplasty (DMEK) use only partialthickness corneal donor tissue. Some surgeons use a femtosecond laser rather than a metal trephine to create specially shaped overlapping edges in the patient and the graft that create a tighter fit and require fewer sutures, so laser safety measures must be implemented. To comply with tracking regulations and prevent mix-up and contamination, the surgeon also should discuss donor tissue accountability measures that need to be followed when human cells, tissues, and cellular and tissuebased products (HCT/P) are implanted; these apply to amniotic membrane grafts as well as to corneas. Careful discussion of these steps helps prevent corneal graft failure.3

Glaucoma Surgery with MMC

Dr. Steven Brown educated nurses on current medical and surgical treatments for glaucoma and complications of trabeculectomy. Nurses need to be prepared to help the surgeon manage intraoperative complications, which occur in 11% of trabeculectomy cases. The most serious ones are suprachoroidal hemorrhage, considered an emergency, and a conjunctiva buttonhole. The glaucoma surgical team needs to be aware of the use and risks of Mitomycin-C, a chemotherapeutic medication used off-label not only in glaucoma procedures but also in many other types of ophthalmic surgery to reduce inflammation, prevent scarring, and decrease the likelihood of recurrence of conditions such as pterygium. Small sponges are soaked in the MMC and then placed in or on the eye. MMC can cause significant ocular complications, so the number of sponges, as well as the dosage, location, and duration of MMC application, needs to be specified and verified in the standing orders, surgical briefing, sign-in, and sign-out. Medical malpractice lawsuits have been filed after pieces of sponge material were left in the eye, resulting in more exposure to MMC than intended. Depending upon the ASC or hospital policy, facilities may be obliged to report a retained sponge case to their accreditation agency as a sentinel event. Some facilities have been fined by state licensing boards for retained sponges. Prevention of retained MMC sponges has proved challenging due to their size and tendency to shred. See the Closed Claim Study for details of an OMIC case and risk management recommendations on ensuring safe removal of these sponges. Staff safety is also a concern when MMC is used, as it is a toxic and potentially hazardous drug. The American Society of Ophthalmic Registered Nurses (ASORN) has prepared a laminated card detailing the “top tips for safe handling, use, and disposal” of MMC. ASCs would be well-served to obtain a copy and post it in the medication preparation room.

Oculofacial Surgery in the Setting of Anticoagulants

Dr. Tamara Fountain focused on what she termed “the art of managing the risk of perioperative systemic anticoagulation.” Patients presenting for oculofacial procedures, which have a higher risk for hemorrhage than other ophthalmic surgeries, are often taking medications prescribed by their primary care physician or cardiologist, such as aspirin, warfarin (Coumadin), and clopidogrel (Plavix). These drugs are intended to prevent heart attacks and strokes, and may need to be taken for as long as a year following procedures such as cardiac stents to prevent death. In addition to prescription drugs, many patients manage their aches and pains with non-steroidal anti-inflammatory medicines, some of which have blood-thinning properties. Finally, patients may supplement their diets with the three g’s (garlic, ginger, and ginkgo biloba) as well as feverfew and grape seed, all of which can increase bleeding. There is no clearcut consensus within the ophthalmic community on whether to stop or continue anticoagulants before ocular procedures. Dr. Fountain explained that rational decisions need to be made in each case by weighing the relative risks of each intervention. Perhaps the most important step in the risk management process is a candid discussion with the patient about the risks of continuing or stopping anticoagulation; the patient must understand and accept the increased risk of either approach. The surgical team should address the specific procedure’s risk of hemorrhage and the patient’s relative risk of a thromboembolic event during the sign-in before anesthesia and as part of the team briefing at both sign-in and sign-out. If the surgeon and physician who prescribed the anticoagulant decided to stop it, the team needs to ensure that the patient did indeed stop it, then check a preoperative INR blood test for patients on warfarin, monitor for signs of a thromboembolic event, and review with the patient when the medication should be restarted. If anticoagulants are continued during ocular surgery, bridge medication therapy may be indicated, pain and blood pressure need to be well controlled, and fibrotic agents must be available. Nurses in the OR and PACU, and the patient, need to be reminded to watch for signs and symptoms of hemorrhage, such as subcutaneous hematoma, increased and prolonged swelling, asymmetry, and orbital hemorrhage, which could lead to a compromised surgical result, vision loss, and exsanguination. OMIC has had claims involving both thrombolic events and hemorrhage that resulted in significant patient harm and large indemnity payments. Careful collaboration with the primary care physician or cardiologist about the decision to continue or stop medications and well-planned teamwork during the procedure could help prevent such claims.4

Retina Surgery with Gas

Surgery to treat retinal detachment, diabetic retinopathy, and proliferative vitreoretinopathy often involves the use of a gas to tamponade the retinal hole. The colorless, odorless gas is supplied at 100% in cylinders and must be diluted with filtered air to the percent ordered by the surgeon in order to achieve the therapeutic effect without causing serious harm to the patient’s eye. Dr. Jack Cohen explained that if the gas delivered is above a certain level, its volume can increase, leading to elevated intraocular pressure, possible central retinal artery occlusion, and loss of vision via many mechanisms. The surgical team needs to know the concentration and work together to ensure that the dilution process is correctly followed. Multiple steps are critical. Once the tubing from the gas cylinder to the syringe has been “rinsed” of air, the syringe is filled about half way with pure gas. The tubing connecting the syringe to the gas tank is now disconnected and the syringe stopcock is turned toward the syringe so none of the gas leaks out of the syringe. Next, the surgeon and nurse agree on the concentration of gas for the patient. The nurse repeats the concentration back to the physician so each can confirm the desired amount. The surgeon watches the scrub nurse push the pure gas from the syringe to the desired percentage labeled on the syringe. The physician then watches the nurse dilute the pure gas by pulling filtered air into the syringe to the labeled line. The syringe stopcock is now turned toward the syringe to prevent losing any of the diluted gas. At this point, the gas has been diluted correctly, and both the physician and nurse have witnessed and verified the dilution process. This communication is especially important when there is a new member of the team. OMIC settled a case where the ophthalmologist ordered a 15% concentration. His usual assistant was not available, so the hospital assigned another ophthalmic nurse, who did not tell the team that she was unfamiliar with the process of diluting gas. The surgeon did not watch the dilution process, but did ask for oral confirmation of the percentage, which the nurse stated was 15%. The patient developed a significant rise in intraocular pressure after the procedure, leading to damage to the optic nerve and NLP vision. The nurse informed the surgeon the next day that she had not diluted the gas at all. Defense experts supported the surgeon’s attempt to confirm the amount, but felt he could have prevented the nurse’s error from impacting the patient by watching her dilute the gas or preparing it himself. OMIC contributed 35% toward the settlement on behalf of the surgeon.

Strabismus Surgery Briefing

There are a number of issues specific to strabismus surgery that warrant a team briefing. Dr. Diany Morales first pointed to the need to verify not only the correct patient and eye as in all surgeries but also the correct amount of surgery and the correct muscle. She advocates having the office record available in the OR and writing the operative plan on the white board so it is visible to the surgeon (“RMR recession 6 mm, RLR resection 8 mm”). Muscle confusion can be caused both by disorientation from sitting at the head of a patient as well as globe rotation from deep anesthesia. Safeguards include checking the distance of the insertion site to the limbus. Globe perforation is a known risk and clear two-way communication is vital. During the briefing, the surgeon reminds OR staff to check before making any adjustment to the bed, drapes, or IV, and states that she will announce the critical moment when she is about to pass scleral sutures. The final key issue to address is anesthesia risk, as many patients undergoing strabismus surgery are children with issues such as prematurity or comorbidities, and general anesthesia is often required. Patients undergoing strabismus surgery are at higher risk for two potential complications: bradycardia and malignant hyperthermia. The surgeon prepares the team to manage bradycardia by announcing when the rectus muscle will be under traction, as this can provoke the oculocardiac reflex, and asking the anesthesia provider to announce if the heart rate slows to an unsafe level so the surgeon can ease the amount of traction. Like untreated bradycardia, malignant hyperthermia is potentially fatal, even though better recognition and treatment has decreased the mortality from 70 to 10%. It is a metabolic disorder characterized by extreme heat production and muscle breakdown that is known to be more common in patients with strabismus. The team must have the appropriate equipment and be briefed on prompt recognition and management. Surgeons have a leadership role to play in briefing team members and preventing potential errors from reaching the patient. They can also model a commitment to patient safety by using surgical checklists and team briefings for all procedures, regardless of location.

1. “Improving Handoff Communications: Meeting National Patient Safety Goal 2E.” Joint Perspectives on Patient Safety. JCAHO, 2006; 6(8):9-15.

2. World Alliance for Patient Safety. “WHO Surgical Safety Checklist and Implementation Manual.” World Health Organization, 2008; www.who.org, accessed 10/31/11. This list was enhanced by the Assn of PeriOperative Registered Nurses (AORN) to include a pre-procedure check-in that helps facilities comply with TJC universal protocol requirements and national patient safety goals.

3. See“Current Good Tissue Practices for Human Cell, Tissue, and Cellular- and Tissue-Based Products” at www.fda.gov.

4. See “Hemorrhage Associated with Ophthalmic Procedures” at www.omic.com for a detailed discussion of anticoagulants and measures needed to address hemorrhage.

Entities at Risk for Professional Liability Claims, Too

By Betsy Kelley OMIC Vice President of Product Management

Digest, Spring 2011

To view the table referred to in this article, go to http://www.omic.com/new/digest/Digest_2011Spring.pdf

Throughout OMIC’s history, the number of insured professional entities has steadily increased. Many new group practices have joined OMIC, and physicians who previously practiced alone have merged their practices with others. Groups now represent 55% of OMIC’s overall market share. Even physicians who remain in solo practice more often form limited liability corporations or similar professional entities in an effort to protect their personal assets, attain tax advantages, and achieve other benefits. With more physicians shifting from hospital-based surgery to outpatient procedures, outpatient surgical centers have flourished. As the number of insured entities has increased, so too has the number of reported claims. Between the company’s inception in 1987 and year-end 2000, 96 claims and suits were filed against medical entities (multi-shareholder corporations and partnerships), sole shareholder corporations, and surgery centers (outpatient surgical facilities or OSFs). During the next five years, an additional 208 entity-related claims were reported. Claim frequency increased even further between 2005 and 2010. By the end of 2010, a total of 449 entity claims had been reported during the decade. Cases against medical entities represented nearly 60% of all entity claims and 12% of all claims reported to OMIC between 2001 and 2010. For this same period, solo corporations accounted for 29% of all entity claims and 6% of claims altogether, and surgical centers accounted for 11% and 2%, respectively. (See graphs on page 4.) The increase in the number of insured entities, however, does not alone account for the large increase in entity claims. Simply put, entities are more frequently being named in claims. This article will explore the different causes of actions that expose entities to claims.

Let the Superior Reply

Under the doctrine of respondeat superior, a professional entity may be held vicariously liable for the acts and omissions of those who provide services on its behalf. As the “master,” the entity is ultimately responsible for the actions of its agents (“servants”), including the entity’s owners, employees, and, in some cases, independent contractors. This is a common cause of action against insured entities. Increasingly, claims against physicians alleging medical negligence include their entity as a co-defendant, and on rare occasions, the case may be filed solely against the entity. A savvy plaintiff attorney may include the entity in an effort to find a deeper pocket or an additional limit of liability. Rather than serving as protection from liability, the entity may instead become an additional source of indemnity. While OMIC has often been successful in having the entity dropped or dismissed in court in the absence of negligence on the entity’s part, these cases may be costly to defend and indemnity payments are sometimes necessary.

Naming All Potential Plaintiffs

Plaintiff attorneys may start with a primary target but do not initially know all the facts at the beginning of a lawsuit. In the case of alleged negligent surgery, it is common to name the surgery center. An OMICinsured ophthalmologist performed Descemet’s stripping endothelial keratoplasty, without complication, on a patient with Fuchs’ dystrophy. When the DSEK failed, the patient underwent penetrating keratoplasty. Claiming complete loss of vision due to alleged negligent corneal transplant, he sued both the surgeon and the outpatient surgical facility. No contention that any OSF employee was negligent or otherwise contributed to the patient’s outcome surfaced during discovery. After nearly $15,000 in legal expenses, the OSF was dismissed from the suit. The case proceeded against only the surgeon.

Negligent Acts of Employed Optometrists and Physicians

Optometrists and ophthalmologists have an independent scope of practice regulated by state law and are directly liable for their own care. If they are employees of an entity, however, the entity is not only vicariously liable but also is expected to direct and supervise the care provided. In one practice, a patient with a 25-year history of diabetes was seen by a non- OMIC insured optometrist employed by an OMIC-insured entity. The patient complained of glare at night, problems driving, and a decrease in distance and near visual acuity over the previous several months. The optometrist diagnosed moderate to severe proliferative diabetic retinopathy, narrow angle glaucoma risk OU/neovascular glaucoma OU, and cataracts OU (no surgery indicated). The patient was instructed to return in two months for a visual field exam with an ophthalmologist. When she did not show for her scheduled appointment ten weeks later, staff consulted the ophthalmologist, who advised offering her the next open appointment, one month later. The patient returned as scheduled, complaining of constant pain and light sensitivity of one week’s duration. Her vision was HM OD and LP OS with IOPs of 19 and 76, respectively. The ophthalmologist diagnosed narrow angle glaucoma secondary to neovascular glaucoma, initiated treatment, and arranged for her to be seen emergently by a glaucoma specialist. The patient filed suit for delay in treatment and named the optometrist (direct liability) and his employer, the ophthalmologist’s sole shareholder corporation (vicarious liability for its employed OD and MD). Defense experts were critical of the OD for not arranging an immediate consultation with an ophthalmologist. They also criticized the ophthalmologist for not having the patient return immediately when she missed the appointment, but he was not named as a defendant. The entity was ultimately dismissed from the suit, and the optometrist reached a settlement of $250,000 with the patient. OMIC paid more than $23,000 defending the corporation.

Former Employed Physician with No Tail Coverage

Entities face increased exposure when health care providers have no direct coverage for their own liability, either because they have chosen to practice without insurance or because, when leaving the practice, they did not purchase “tail” or prior acts coverage for their previous activities. In these situations, the entity may be found legally liable for damages. (See Policy Issues for coverage limitations relating to uninsured providers.) Dr. A (not insured by OMIC), one of several ophthalmologists employed by an OMIC-insured group, saw a patient for complaints of a silver arc of three days’ duration. The dilated exam showed a posterior vitreous detachment (PVD). Dr. A advised the patient to return in three months. When she returned two months later, her dilated exam again showed PVD, and she was instructed to return in six months. Instead, she returned in two months. At this exam, Dr. A noted possible Sjogren’s. Although Dr. A later testified that he performed a dilated fundus exam at this visit, no fundus exam was documented. Optos images were ordered, which revealed a retinal detachment that Dr. A allegedly missed. When the patient returned a few weeks later complaining of hazy vision, there was questionable optic pallor and the cup-to-disc ratio was 0.1. There is no documentation of a retinal detachment or dilated exam at this visit. Dr. A recommended visual field testing, which was completed the following week and indicated a “possible visual field defect.” Plans for carotid Doppler and sedimentation rate were recommended. A few weeks later, the patient was seen at another facility, where the retinal detachment was diagnosed. Because Dr. A did not carry professional liability insurance, the patient also filed suit against the entity for vicarious liability, even though no criticisms of the entity were voiced. The case settled at mediation for $300,000 on behalf of the entity. The uninsured physician also contributed $50,000 towards settlement.

Role of Staff in Lawsuits

The previous cases relate to alleged errors committed by physicians and extended health providers, such as optometrists. Ancillary personnel, such as employed nurses and technicians, are another source of vicarious liability. Although OMIC’s policy extends coverage directly to non-physician personnel, such employees are rarely named in medical malpractice complaints. Instead, allegations of employee negligence are generally filed against the employing entity. A medical entity was sued after a patient suffered a chemical corneal burn caused by an enzyme cleaner. When the patient removed her contact lenses during a pre-surgery check-up, the technician placed them in cleaning solution rather than wetting solution. Upon placing the lens back in her eye, the patient experienced severe burning, swelling, and pain. This case settled for $40,000 against the entity. In another practice, an insured ophthalmologist discovered, while dictating the operative report for a cataract surgery in which cortex was retained, that the wrong IOL had been implanted. The ophthalmic assistant had incorrectly transcribed A-scan data from another patient’s record. The surgeon called the patient the next day and informed him of the error. The patient self-referred to another ophthalmologist, who treated him for complications relating to the retained cortical material. The patient filed a claim against the surgeon and his solo corporation alleging pain, light sensitivity, chronic redness, and the need for additional surgeries. Although these complaints resulted from complications of the initial surgery and were unrelated to the wrong-power IOL, the technical error compromised the case’s defensibility. Accordingly, a settlement of $42,500 was made on behalf of the entity.

Slips, Trips, and Other Mishaps

Another area of potential liability is the insured premises. While it may seem that slips, falls, and other office mishaps should be covered under the practice’s commercial general liability (CGL) or business owner’s policy (BOP), such cases often fall instead under professional liability. Many of these cases center on patient supervision or are related to medical care provided rather than premise defects. An elderly patient with multiple medical issues was escorted to an uncarpeted exam room and placed on a stool with rollers and no back. While alone in the exam room, she fell off the stool and hit her tailbone. As a precaution, she was sent to a local hospital for examination. X-rays showed no visible damage, but a bone scan taken three months later noted subtle findings of a possible hairline fracture. The patient filed a claim against the ophthalmic entity, which reported the claim to its CGL carrier. That carrier denied coverage, classifying the case as professional liability due to negligent supervision. OMIC settled the case on the entity’s behalf for $60,000.

Protocols and Pitfalls

In some instances, the practice’s policies and procedures themselves— or the failure of staff to follow them—contribute to liability claims. Breakdown in the phone message system resulted in a $140,000 settlement on behalf of an insured medical entity. A patient with a history of ECCE, laser iridotomy, and pars plana vitrectomy underwent a corneal transplant by Dr. X. The bandage contact lens was removed two months later, and the epithelium was healing. Two weeks later, the patient called the medical exchange on a Saturday morning, complaining of pain and redness in the operated eye. When the call was not returned, he called again that evening and three more times on Sunday. He was finally seen by the on-call physician, who diagnosed endophthalmitis, prescribed Quixin and Cosopt, and advised the patient to return to his corneal specialist the next day. The patient returned as instructed and was referred by Dr. X to the hospital, where the eye was eviscerated. The patient filed suit against the entity only; no physicians were named. Failure to follow protocols to prevent wrong-eye/wrong-site surgery resulted in a $75,000 payment on behalf of an OSF and $240,000 on behalf of a non-OMIC surgeon. A patient was scheduled for strabismus surgery OD. Preoperatively, the nurse and patient identified the right eye, and all documentation indicated the right eye. In spite of this, the left eye was draped, no “time out” was called, and surgery proceeded on the left eye. As these cases demonstrate, professional entities face a number of professional liability exposures. This issue’s Risk Management Hotline discusses ways to reduce some of them.

Large Loss Indemnity Payments and Limits of Professional Liability

By Paul Weber, JD

[Digest, Winter 1997]

An area of great interest and concern to OMIC insureds and prospective insureds is that of large indemnity payments against ophthalmologists. This subject often comes up when ophthalmologists are deciding what limits of coverage they should obtain. Many ophthalmologists want to know the “worst case scenario” so they can select sufficient limits to protect their personal assets should a claim arise. This article briefly reviews ophthalmology claims statistics and OMIC’s large losses; however, this information is just one component of the detailed analysis necessary to correctly determine specific individual coverage limits.

Overview of Claims

First, it is important to understand that the overwhelming majority of claims against ophthalmologists are settled with no indemnity payment to the plaintiff or claimant. Of the 479 closed claims in OMIC’s database, approximately 77% (368) were resolved with no payment to the plaintiff. A review of the Physician Insurers Association of America (PIAA) claims database of 3,714 closed claims against ophthalmologists also reveals that approximately 70% of those closed claims were settled with no indemnity payment to the plaintiff. Second, the average (mean) OMIC indemnity payment is approximately $113,880; the median payment is approximately $50,000. The PIAA data average (mean) payment is $123,823.

Approximately 15% of OMIC’s paid claims (17 cases) closed with a “large loss,” that is, $250,000 or more. While these claims make up only 15% of all paid claims, they represent 59% of OMIC’s total paid indemnity. OMIC’s average (mean) “large loss” is $433,285. Interestingly, there is a striking similarity between OMIC’s and PIAA’s large ophthalmic losses: 15% of all paid PIAA ophthalmic claims are $250,000 or more and represent 54% of the total indemnity paid; the average (mean) large payment is $454,578.

OMIC’s Large Losses

One notable aspect of OMIC’s large losses (see table) is the variety of procedures and treatments from which claims arise and the different subspecialties represented. The largest number of losses (8) has occurred against general ophthalmologists – not surprising since this is the largest group OMIC insures. However, four subspecialties are represented in the top five large losses, indicating that these large losses occur across a broad range of subspecialties.

The assortment of procedures and “medical misadventures” (e.g., failure to diagnose, improper performance, etc.) is also quite diverse. Failure to diagnose or delayed diagnosis resulted in the largest percentage (40%) of the paid large losses. But medication errors, improper performance during surgery, and failure to refer or manage patients show that there are various ways in which large losses can arise against ophthalmologists.

One significant factor that can affect large loss cases is when multiple defendants are sued. Unfortunately, this can have the effect of codefendants blaming each other for the injury caused to the plaintiff. This often occurs in cases of ROP when there is a breakdown in communication over who is managing treatment of the baby (e.g., the pediatrician or neonatologist) during and after hospitalization. This problem is not limited to ROP cases, however, as evidenced by the four other large loss cases where multiple defendants were involved.

In conclusion, there are many factors to consider when selecting coverage limits of professional liability, including the fact that large losses can occur across the spectrum of subspecialties and procedures. At the moment, however, OMIC has not paid any loss in excess of $1 million in its ten year history, although some doctor-owned companies have reported ophthalmic indemnity payments over $1 million.

Note that indemnity payments are predicated on many complex medical and legal factors. Similar procedures and outcomes could result in significantly different indemnity payments.

*Indicates other codefendants in case; additional indemnity over and above the OMIC payment was made to plaintiff.