In years past, there were stories about doctors who got in trouble in one state, and then moved on to the next, and then to the next, repeating their bad actions or negligent care. There was no way a hospital or insurance company could easily find out the history of a bad doctor. That is why the National Practitioner Data Bank (the “data bank”) was enacted into federal law. Now, every adverse action involving a doctor, whether payment of a malpractice claim or a state disciplinary action, must be reported to the data bank.
The public does not have access to the data bank, but hospitals, healthcare plans, licensing agencies, etc., can get information about past medical malpractice payments or other adverse actions affecting the doctor. So every doctor knows that, if he settles a claim — even for a nominal amount — that information will be accessed whenever he applies for admitting privileges at a new hospital or seeks liability insurance coverage from a new carrier.
What does this have to do with your medical malpractice claim? Almost all medical liability policies include a “consent to settle’ clause. That means the insurance company can’t even discuss settlement with your attorney unless the doctor consents to settlement. That is true even if the insurance company thinks there is liability and wants to settle to avoid additional costs and risks.
The doctor, on the other hand, knows that consenting to settlement will likely lead to some payment and therefore a notice to the data bank about the settlement. What used to be confidential, any settlement now is a “black mark” on the doctor’s record. Needless to say, this discourages the doctor from consenting to settlement.
Many policies have provisions allowing the insurance company to over-ride the doctor’s refusal to consent, but these are rarely utilized. No company wants to have a reputation that it puts its own interests ahead of its insured’s interests, because selling malpractice insurance is a competitive business. There is also some leeway in terms of whether a claim involves allegations of negligence against a particular doctor or whether it is an “institutional” claim against a hospital or clinic. For example, a failure to provide an adverse test result to a patient may be negligence on the part of the doctor, but may be largely a problem with a hospital’s policies and practices about how such results are handled.
