Medical Employer’s Settling Suits Without Consent

Most physicians, dentists and physician assistant’s expect to sign a contract as a condition of employment. However, not all medical and dental professionals consider the ramifications of the terms of their contracts.

As an attorney in Colorado, I’ve reviewed and interpreted many employment contracts for clients and have seen some that contain clauses allowing the employer—often a hospital—to settle claims or law suits against employees without the consent of the employee named in the suit.

This may seem to be a reasonable demand on the part of the employer at the time of hire–after all, the medical doctor, dentist, or physician’s assistant is ultimately an agent of the hospital or other employer—but many of these healthcare professionals are later dismayed when their employer settles a suit or claim on their behalf which the doctor would have chosen to fight.

Settling Suits Without Consent

  • Whenever a settlement is made, the physician who the settlement is against is reported to the National Practitioner Data Bank and their licensing board.
  • For instance, a doctor or physician’s assistant could provide a patient with excellent care or have a complication that does not deviate from the standard of care.
  • A patient who is unhappy may still hire an attorney and file suit against the doctor.
  • The decision on how to proceed is then up to the employer who then can exercise its right to settle the suit—making a financial decision to limit their “potential” liability and to avoid legal costs.

The physician—who has always disputed the claim or suit, but has no legal right to fight it independently—then has his or her name entered in the National Practitioner Data Bank, creating a black mark on his or her record which is available to numerous health care entities and licensing boards. In addition, this settlement will be reported to the appropriate licensing board which often results in an investigation and possible disciplinary action against doctor or other healthcare professional.

Just as serious, in Colorado, physicians, dentists and many other medical practitioners face additional reporting requirements and exposure under the Michael Skolnik Medical Transparency Act (Skolnik Act). The Act requires all Colorado licensed physicians to report to the Board of Medical Examiners among other things, malpractice settlements, judgments, and arbitration awards. These are then publicly posted on the Medical Board’s website and are available for viewing by anyone with internet access.

Reporting requirements have now been expanded to apply to Dentists and many other healthcare practitioners, and this information is publicly posted on the their respective Board’s website. So, if the doctor’s employer settles a suit on his or her behalf, and against the doctor’s wishes, it will still appear on the respective Licensing Board’s website.

This is particularly significant since, unlike the National Practitioner Data Bank, settlements required to be reported under the Skolnik act are available to the public, including patients and their malpractice attorneys. The knowledge that a doctor has settled a case or cases previously can often encourage future claims or suits, or can result in unwanted media attention, deter patients from coming to the provider and even be used by competitors against the provider.

In recent years, there has been a definite and growing trend by employers to demand the right to settle claims or suits without the consent of the physician and over the physician’s objections. These are difficult issues as employers often prioritize their overall financial and institutional interests over the needs, reputations and careers of the individual physicians or other providers involved.

Employers are often unwilling to take on a potentially costly legal battle to maintain the reputation of one of their doctors or physician’s assistants or to risk going to trial on a case even when it is the right thing to do. As a Colorado healthcare professional attorney, I do my best to educate my clients about the potential ramifications of signing a contract that contains this sort of clause, to help them negotiate a better position and, when necessary, to deal with the consequences of the employer’s decision to settle.