Recent years have brought increasing recognition that errors and adverse outcomes in health care are far more common than was once supposed, that malfunctioning systems of care are far more likely than individual wrong doers to be the source of such errors, and that improvements on the systems level require broad communication. Equally important, medical malpractice litigation has turned out to be a poor instrument for improving quality of care and patient safety.

Early mediation has become a cornerstone of early dispute resolution efforts. Unfortunately, physicians are often left on the sidelines in these settlements. Even where multiple parties to a suit can otherwise reach an agreement, physicians may feel impelled to litigate, at least partly because money paid on their behalf in a medical malpractice settlement must ordinarily be reported to the national Practitioner Data Bank (NPDB), leaving a permanent black mark on their professional record. Not with standing this apparent dilemma, several options permit physicians to participate in a mediated settlement and still avoid a data Bank report. Mediators who familiarize themselves with these options will be far better prepared to facilitate multiparty agreements in which hospitals, physicians, long term care facilities and other parties can fully participate.

In the states in which pre suit notification is mandated,  (a period that many states mandate prior to filing a medical malpractice claim). Mediation within this time period, which is normally between 60 or days, with any monetary mediated payment would not be deemed reportable to the National Practitioner Data Bank. 

The Data Bank poses a significant deterrent to early resolution; physicians can in fact settle early and avoid a Data Bank report via a number of mechanisms: Mediation can provide an avenue in the following situations:

1)      Provider pays out of pocket:

Insurers and other entities who pay settlements or judgement on physicians’ behalf must report that payment to the Data Bank. Currently, based on the case American Dental Association v. Shalala, in which a dentist who had paid a malpractice claim out of pocket was reported to the Data Bank. However, the Circuit Court reversed the lower court’s decision due in fact that congress did not intend to encompass any individual doctor or dentist as an “entity” that must report to the National Practitioner Data Bank. Due to the Circuits favorable decision in the American Dental Association, the DHHS now states quite clearly that payment out of pocket do not require any report to the National Practitioners Data Bank

2)      Waiver of debt or refund of payment; Loss adjustment expense:

A physician who forgives a patient’s debt or refunds a prior payment need not report to the Data Bank. A waiver of a debt is no considered a payment and should be no reported to the NPDB.   

3)      Oral or other non-written communication of demand for payment:

The key trigger requiring a report for a medical malpractice payment is “a written claim or demand for payment based on a health care provider’s furnishing (or failure to furnish) health care series. Therefore, if a plaintiff or her attorney makes claim or demand for payment in a non-written form, such as by telephone or direct person-to-person conversation, money paid to settle that claim need not be reported. The DHHS NPDB Guidebook states that:  

a)      Only payments resulting from written demands are reportable to the NPDB, Even if the practitioner transmits the demand in writing to the medical malpractice payer, the payment is not reportable if the patient’s only demand was oral.

4)      Contractual agreement or statutory mandate for pre-suit mediation:

Some institutions invite patients to sign a voluntary mediation agreement. In addition, some states require mediation prior to filing a medical malpractice claim. Some states mandate that parties mediate, pre-suit, but does provide defendants with the option of requiring the plaintiff to mediate, once they have received pre-suit notification of plaintiff’s intent to sue.

Where a written demand asks, not for payment money, but simply for a voluntary conversation whose usually purpose is to avoid litigation, the lain language of the stature or contract suggest that an NPDB report is not required. Therefore, a written demand to discuss does not constitute a written demand for payment. It a settlement ensues, plain language further would imply that the money was not paid in response to a written claim or demand for payment.

5)      Corporate Shield:

The NPDB Guidebook makes clear that where an entity such as a hospital or clinic makes a payment in a suit that does not identify and individual practitioner, no data Bank report is required. In addition, where a practitioner is dismissed from a lawsuit prior to the to the settlement or judgment, nor report need be made.

6)      Pre-suit notification period:

A number of states no mandate that before a plaintiff is permitted to file a medical malpractice claim, he or she must provide advance notification to the defendants. Although these notices must generally be in writing and my require considerable specificity, arguable they do not constitute a written claim or demand for payment, but rather, simply a written alert that in the future there will likely be such a claim. If so, then settlements made during this period should also be deemed non-reportable.

Lawyers discourage their physician clients from participation in mediation for a number of reasons. First, they may be trying to protect their clients from what certainly would be an emotionally trying, even if ultimately satisfying, experience. Second, they see mediation as part of the legal system and, lacking knowledge and understanding of the full range of benefits of mediation; have a constricted vision of what is possible or productive in mediation. Third, their experience with evaluative mediators may have blinded them to the noneconomic benefits for their clients of client participation. Fourth, they may fear either that their clients might say something that damages the legal case or that offends the plaintiffs. Finally, given the fact that most defense counsel are paid on an hourly basis, some may be hostile to the process that offers less expensive resolution.

Sending a litigator to settle a case may make as much sense as asking a surgeon to provide holistic noninvasive medical care. Litigators, whose advice about communication with patients and their families and approach to client participation in mediation sees so flawed, may only be doing their job-that is, shaping all client interactions with the opposing side with an eye to the impact on the legal case. Of course, this is a narrow definition of the lawyer’s job and typifies the often criticized defend and deny mentality.

In both law and medicine, people turn to educated and trained professionals for help with problems-often serious problems. Also, in both law and medicine, individuals are dependent on institutions-hospitals and courts-with their own traditions, cultures, and hierarchies. Malpractice Mediation needs to be considered and understood by all physicians and medical providers in hopes of mitigating the immediate and future collateral damages if a mal practice claims is filed within the court system.