Legal and Ethical Issues in Psychiatry II: Malpractice and Boundary Violations

Overview

Of all the areas in which psychiatry and the law interact, few stimulate as much affect as does medical malpractice liability. In this chapter, we will cover some of the core concepts in personal injury law and then focus on medical malpractice in psychiatry. We will discuss specific areas of liability risk, including boundary violations.

The Medical Liability Climate

Approximately every 10 years, American medicine finds itself in the midst of a “malpractice crisis” ; the first years of the twenty-first century have been no exception. As in the past, there is debate about the nature and cause of problems related to malpractice litigation, such as rising premiums and the cost of defensive medicine, as well as what to do about them. Are there more lawsuits and higher awards? Are insurance premiums higher and, if so, why? Calls for tort reform routinely cite the cost of defensive medicine and the impact of malpractice on rising health care costs.

The responses of researchers and commentators to these highly charged questions are not always consistent with the most pessimistic perceptions of the medical community. Contrary to the concern that every error leads to a lawsuit, only a small percentage of cases involving injury due to medical errors actually become the basis for claims or litigation, and defendants continue to prevail in the majority of cases that result in litigation, in part because a substantial proportion of those cases appear to lack merit. From 1956 to 1990, the number of malpractice claims for all specialties rose 10-fold: from 1.5 per 100 to 15 per 100 covered physicians. Overall, it appears that the median malpractice award (both jury awards and settlements) doubled in real dollars between 1990 and 2001, but it has remained essentially flat since then, albeit with variation among the states.

Psychiatrists can take some comfort from being among the physicians least likely to be sued. In their study of malpractice risk by specialty, Jena and colleagues found that psychiatry had the lowest proportion of physicians facing malpractice claims annually (2.6%) from 1991 to 2005, with neurosurgery the highest at 19.1%. Even so, by the age of 65, 75% of physicians in the low-risk group, which also included family medicine and pediatrics, had been sued during the time period.

Kilgore and colleagues studied the impact of various proposed tort reforms on malpractice premiums and determined that imposition of caps on malpractice damage awards resulted in significantly lower malpractice premiums. They estimated that a nation-wide cap of $250,000 on non-economic damages would result in a premium savings of $16.9 billion per year. They also found that malpractice premiums had an inverse relationship with the Dow Jones Industrial Average. This observation supports the hypothesis that insurers raise premiums in order to pay their stockholders when other investments are performing less well.

It is certainly the case that malpractice premiums have increased over the years, and that multiple causes are to blame. It is not at all clear, however, that malpractice premiums have increased significantly relative to other expenses. In an in-depth analysis of data from nine regions from 1970 to 2000, Rodwin and associates examined actual premiums paid (as opposed to advertised rates) relative to overall physician income and expenses. They found that premiums for self-employed physicians rose from 1970 to 1986, declined from 1986 to 1996, and rose thereafter. Premiums were lower in 2000 than they were in 1986, however, and other practice expenses continued to increase while spending on malpractice premiums fell from 1986 (11% of total expenses) to 2000 (7% of total expenses).

There is no end in sight to arguments over the causes of medical malpractice litigation, the need for tort reform, and the assignment of blame for dissatisfaction with medical practice. Whether or not there is an actual crisis, or whether premiums are a relatively smaller or a larger portion of practice expenses, there is no contesting the fact that the prospect of a lawsuit and actually being sued have a major impact on the personal and professional lives of defendant physicians, and the relationships these physicians have with their patients. The threat of malpractice litigation is unlikely to diminish significantly, given the Institute of Medicine's 1999 estimate that 44,000 to 98,000 deaths per year are due to preventable medical errors. While the personal injury system is not without its problems, hopes for a significant decrease in medical malpractice claims appear to lie with changes in how medical care is delivered, rather than with doing away with personal injury law.

Support for the argument that malpractice reforms reduce costs is mixed. In 2003, Texas adopted malpractice reforms that capped non-economic damages at $250,000 for most cases. Stewart and colleagues studied the impact of the reforms on general surgery malpractice claims in an academic medical center. They found a significant drop in claims from 40 to 8 per 100,000 procedures, as well as a significant drop in litigation costs. According to Paik and colleagues, this did not result in reduced spending on medical care, which would have been expected had the reforms resulted in a decrease in defensive medicine.

Malpractice Liability

A tort is an injury to another party that gives rise to a right on the part of the injured person to sue the party causing the injury for damages. Personal injury or tort law embodies the principle that a person injured by the acts of another should receive compensation for the harm done. This concept dates back more than 2,000 years. Medical malpractice is a subset of tort law that is concerned with alleged negligence by medical professionals. Medical malpractice as a concept represents the application of tort principles to the actions of professionals, and like tort law itself, is an ancient phenomenon.

There are two types of torts, intentional and unintentional. Both may be the subject of malpractice claims in psychiatry. Intentional torts are injuries that result from some intentional action on the part of the actor, also referred to as the “ tort feasor ,” who will ultimately be the defendant if a lawsuit is pursued. In psychiatric malpractice claims, typical intentional torts are battery, assault, false imprisonment, abandonment, intentional infliction of emotional distress, and undue familiarity (i.e., sexual misconduct and other boundary violations). Each of these intentional torts is discussed later in this chapter. Unintentional torts arise out of negligent acts or omissions (e.g., misdiagnosis or failure to diagnose, failure to protect the patient from self-harm or harm to others). These are also discussed later in this chapter.

Tort law serves two purposes. First, it fulfills the long-established concept that individuals who are injured by the negligent actions of others should receive compensation from the person who caused the harm for the damage they have suffered. Second, some believe that the threat of potential liability serves as a deterrent to negligent behavior. Mello and Brennan cast doubt on the deterrence idea in personal injury matters generally, and medical malpractice specifically.

Malpractice insurance also serves two purposes. First, it ensures that injured patients can receive compensation when they are harmed; second, it protects the defendant physician from having to pay damages personally, thus risking potential financial ruin. Malpractice insurance is designed to insure physicians in the event that harm results from negligence (i.e., the allegedly wrongful act was inadvertent rather than intentional).

Medical treatment necessarily involves intentional actions, and liability may therefore arise from both intentional and unintentional acts and omissions that are part of the treatment. As a result, certain intentional acts are also covered by malpractice insurance. For example, a patient injured during a restraint, or hospitalized against his or her will, may sue for battery or false imprisonment, respectively, and the malpractice insurer will both defend the claim and pay any damage award. The same is not true if the psychiatrist punches the patient during a fit of anger, for example, as this action is outside the scope of psychiatric treatment and therefore has nothing to do with acts performed in the course of caring for the patient. Sexual misconduct by psychiatrists raises similar questions about what actions by psychiatrists should be considered part of the scope of treatment and therefore covered by insurance, or separate from treatment and therefore not covered by malpractice insurance, as will be discussed later in this chapter.

To establish a claim of malpractice, whether the defendant's action was intentional or unintentional, a plaintiff (the party bringing the suit and claiming to have been injured) must prove four things. (The plaintiff may be the injured party himself or herself, or a representative of the injured party, e.g., the parent of an injured child or the executor of the estate of the deceased in a wrongful death action.) First, the plaintiff must prove that the defendant owed a duty to the injured party. All individuals owe a general duty of reasonable care, such that their ordinary behavior does not result in harm to others (e.g., drivers have a general obligation not to drive recklessly). The duty to behave in a non-negligent fashion toward a specific individual or group arises when there is a special relationship. Thus, while a physician does not have a specific duty to a person until a doctor–patient relationship is established, once that relationship begins the physician has a duty to perform in accordance with the standard of care of the average physician practicing in that specialty.

In order to prove the existence of a duty, the plaintiff must establish that a doctor–patient relationship existed. Simply put, a doctor–patient relationship is established when the physician accepts responsibility for the patient's care by becoming involved with the treatment. Curbside or informal consultations, or even more formal consultations, will not establish the existence of a relationship, so long as the consultant does not assume a treatment role.

States differ as to whether clinicians owe a duty of care to individuals other than patients with whom they have entered into a doctor–patient relationship. Specifically, one may wonder what happens when a non-patient is injured by the actions of the clinician's patients. This concept of duty to third parties is discussed more fully later in this chapter.

The second element of a malpractice claim is dereliction of duty, or negligence. It can be characterized as a departure from the standard of care that results from failure to exercise the level of diligence or care exercised by other physicians of that specialty. An error or injury does not constitute malpractice if it occurs in the course of treatment where the physician has exercised due diligence.

In order to establish this element, the plaintiff must introduce evidence of the applicable standard of care. This is perhaps the most critical element in malpractice claims, as the applicable standard varies according to the situation, the type of practitioner, and the jurisdiction. Specialists, or those who claim to have special expertise, are held to a higher standard of practice than general practitioners. Under the “School Rule,” practitioners who belong to a defined, recognized school of practice or belief may be judged according to the standard of practice of that school, although minimum standards of practice are expected of anyone who holds himself or herself out as being capable of diagnosing and treating illness. In the past, the applicable standard was dependent on the community in which the physician was practicing (e.g., urban physicians were held to a higher standard than were rural physicians). That rule, known as the “Locality Rule,” has gradually faded with the wide availability of journals, on-line medical resources, and educational conferences, resulting in a more uniform national standard of care. While there has been a move toward a more national standard of practice, jurisdictions continue to differ as to whether residents and other trainees should be held to a standard of practice defined by others at that level of training, of general practitioners, or of specialists.

The third element, causation, and the fourth element, damages, are closely tied to the first two: the plaintiff must show that the negligent behavior is the direct cause or proximate cause of actual damages. Causation in personal injury law is assessed in two ways. First, the “but-for” test is applied: “But-for the alleged negligence, would the injury have occurred?” Second, was there proximate or legal cause (i.e., was the injury foreseeable)? The test for forseeability is whether the claimed harm was “a natural, probable, and foreseeable consequence” of negligence on the part of the actor.

Under the doctrine of “loss of chance,” causation may also be established where the act or omission by the defendant-physician resulted in a lost opportunity for treatment and therefore subsequent harm. This scenario might occur, for example, where there is a missed diagnosis, delayed referral, or delayed treatment. The loss of chance rule has been rejected in professional negligence cases in some jurisdictions and retained in others.

Damages can be of several types. They may be economic (such as lost value of future earnings and medical expenses arising from injuries) or they may be physical (such as the loss of a bodily function). They may also be emotional (e.g., development of psychiatric disorders or pain and suffering). Punitive damages may also be awarded, where the defendant's behavior was so reckless as to justify imposition of added damages as punishment for egregious behavior and also to serve as a means of deterring that defendant and other potential defendants who might act similarly in the future.

These four elements of a malpractice claim are often referred to as the four Ds: duty, dereliction of duty, direct causation, and damages. If the defendant convinces the jury, or the judge in a bench trial, that all four elements have been proved by a preponderance of the evidence (i.e., that it is more likely than not to have occurred), the defendant will be required to compensate the victim for the harm suffered. Expert witnesses who offer their opinions on any of the four elements must testify to a “reasonable degree of medical certainty”—that is, they are confident that their opinions are more likely true than not.

Liability and Managed Care

Managed care has had a dramatic impact on the practice of psychiatry and the delivery of mental health services. Early on, psychiatrists recognized the potential liability associated with treatment decisions being influenced, and in some cases controlled, by insurers. One might ask, “Is the psychiatrist or inpatient unit liable if a suicidal patient is refused further insurance coverage for inpatient hospitalization, is discharged, and then succeeds in committing suicide?” In a word, yes. A psychiatrist's duty to his or her patient continues, regardless of whether the patient's insurer will continue to pay for services.

The financial liability of employer-sponsored health plans for damages resulting from denial of health care benefits is significantly limited by the Employee Retirement Income Security Act (ERISA). ERISA contains a pre-emption clause that limits the possible damages from denial of care to the value of the actual benefit or service denied, thus shielding managed care plans from liability for negligence or harm resulting from denial of care. The Supreme Court made clear in Aetna v. Davila that ERISA applies to all covered plans, in spite of state statutes that attempt to provide state law remedies for denial of care and resultant harm. However, ERISA does not pre-empt state statutes that require independent third-party reviews of denials of service, according to the Supreme Court.

The result of this federal statutory scheme is that physicians and health care institutions remain liable for harm that results from withholding or from early termination of treatment, even if the managed care organization has withdrawn funding. Injured patients have no recourse against the managed care plan other than a civil action for the value of the lost benefits. They are free, however, to pursue traditional malpractice claims against providers. In order for the physician to avoid liability, he or she must protest the denial of care, appeal it to the highest level that the insurer provides, and take other reasonable steps to ensure the patient's safety. Providers themselves may pursue administrative and civil remedies to recover the value of the care provided. However, physicians' entitlements to do so are likely to be limited by their own contracts and agreements with managed care providers.

Selected Areas of Liability Risk in Psychiatry