The Question of Disclosing Medical Malpractice Insurance

A recent ruling in a New Jersey court serves as a reminder to physicians to check state laws in relation to the requirement to disclose medical malpractice coverage.

According to the New Jersey Supreme Court’s website, the issue addressed in Jarrell v. Kaul centered around, “C[an] plaintiffs maintain a cause of action against a medical doctor for failure to disclose that he did not have malpractice insurance to cover the relevant procedure; and can plaintiffs maintain a cause of action against a medical facility that allowed the medical doctor to perform in the facility procedures for which the doctor does not have malpractice insurance?” . In the State of New Jersey, the answer from their Supreme Court was “No.”

In this case, the plaintiff/patient, James Jarrell and his wife were awarded $750,000 at the trial court level and then appealed for more money on the premise that the physician did not disclose that he did not have medical malpractice insurance to cover the procedures. Ironically, Richard A. Kaul was an anesthesiologist, not a board certified neurosurgeon or orthopedic surgeon and definitely not fellowship trained in spine surgery.

What the New Jersey Supreme Court did find was, “[a] health care facility that grants privileges to physicians to use its facility has a continuing duty to ensure that any physician granted privileges maintains the required insurance," Judge Mary Catherine Cuff wrote for the court. Hence, the Jarrells are going back to trial to pursue damages against Market Street, the surgery center, which allowed the physician to operate under these circumstances.

This case raises several issues for physicians. First, it is important to know the medical malpractice insurance laws of the state(s) that you practice in. Specifically, is there a requirement to carry medical malpractice insurance and is there a duty to disclose whether or not you carry medical malpractice insurance to patients? Then there is the practical side:

• Organizations may require it even if it is not required under law;

• Patients may be suspicious if you don’t have it; and

• Your assets may be more vulnerable in the event of an adverse outcome.

Lastly, are you operating outside your area of practice and training? Physicians who are operating above board often do a separate residency or fellowship in a certain area to obtain the additional training necessary to perform certain procedures. If not, then you could be opening yourself up to significant liability, as well as unnecessarily harming of patients. In sum, a duty to disclose and what is a prudent business practice do not always coincide. It is common to carry insurance in any profession and for patients or organizations to ask if you have it.