Examining Lawsuits and Your Urgent Care Business
Lawsuits are any business owner’s nightmare; especially in the healthcare industry where a patient’s health rests in the hands of a provider. Urgent care centers or ambulatory surgical centers that find themselves in a first-time lawsuit may ask questions regarding the legal process in the healthcare field and how the lawsuit can affect their business?
The Ambulatory M&A Advisor now provides a look into the litigation process and the details that centers in the midst of this process need to pay attention to.
The Three Main Lawsuits
Matthew Fisher, co-chair of the Health Law Group at the law firm Mirick O’Connell says that the topic of lawsuits in the medical field is a generally broad topic that can be divided into three primary categories: malpractice, operational and general lawsuits.
Fisher explains that a malpractice lawsuit is based upon the provision of care and whether or not the services provided the care represented by the center. Stuart Mauney, partner with law firm Gallivan White Boyd adds in a deeper explanation on the details of a malpractice lawsuit.
“An urgent care facility would have the possibility of medical malpractice claims for not providing appropriate medical care when they are seeing a patient. That can be both physician related and nurse professional related. That would be their primary concern in terms of liability,” Mauney says.
An operational lawsuit involves focus on the management of the company and may be based upon how the company was run and whether such operations satisfied state or federal regulatory requirements, among other possible causes, Fisher says.
Mauney says these lawsuits may involve the relationships that centers have with insurance carriers or other vendors and providers. He says that this type of lawsuit is more of a business and commercial liability exposure for how the business operates and works with other entities.
Fisher says the general lawsuit is a lawsuit that can occur for any reason, as in any other business.
“It could be the grounds aren’t maintained well and someone slipped and fell outside while they were walking out, or a collections type of lawsuit. Like in an instance where the center isn’t paying their bills, or someone’s not paying the center’s bills,” Fisher says.
Mauney agrees that the companies have the obligation to provide a safe location for patients to visit their facility.
Mauney adds that other types of issues for which a center might have exposure would involve workers compensations claims by their own employees for injuries on the job.
“They want to make sure that they have a safe and secure place for their staff to work, so that they are not exposed to workers compensation claims by their own employees,” Mauney says.
You’ve Been Sued….Now What?
Typically, the laws and processes for healthcare litigation vary from state to state, however, though they vary, Douglas J. Cochran, partner at law firm Stone Pigman says they are all part of a similar process.
In the discovery of a lawsuit against an urgent care center, Cochran says there are two scenarios that usually occur:
- There has been no contact by anybody and you receive a lawsuit without warning.
- There have been complaints early on and you know the situation is going to more than likely occur down the road.
“You of course would want the one with the heads up so that you can do your investigation before hand,” Cochran says.
Cochran advises that a preparation process when faced with a lawsuit involves interviewing employees, and digging up information to gain an accurate view of the issue. He says that finding out pertinent information as soon as possible, since there are certain dangers that can prove your case difficult to make. One of them being employees no longer working at the location, but were present at the time of the lawsuit incident.
“You have to track them down; you don’t have full control anymore because they are not employed any longer…He may be the star witness, but six months after the incident, unrelated to that incident, something else happened where, he may have been fired. You need to know that quickly because they may have an axe to grind with the company,” Cochran says.
Fisher says that once the lawsuit is in place, at a fundamental level, all lawsuits are run the same way.
“The typical process is, a complaint gets filed in the court, service of that complaint is made and then the defendant needs to answer and go through discovery, talking all along the way, kind of going through the normal process,” Fisher says. “If talking about a malpractice suit, there might be an initial step depending upon the state you are based in…Each state has different requirements on the malpractice side of things.”
Mauney says that in a medical case, the plaintiff will usually have an expert in the case on their side whose job it is to investigate and provide an opinion that the medical provider breached the standard of care..
“The facility has the opportunity to review that and get their own expert to review it if they feel that is necessary. Typically the plaintiff will want to take a sworn statement from witnesses at the facility, whether nurses, or aides, or physicians. They also may want to take depositions of the management, owners and officers of the company. Then there is typically a period of time in which the parties are exchanging written documents, producing documents and records,” Mauney says.
Will a Lawsuit Affect your Business?
Fisher says that impact of a lawsuit on a business depends on the type of claim being made. He says generally, just being in a lawsuit, will not typically result in any day to day changes unless the center recognizes a problem that needs to be corrected as a result of a lawsuit.
Mauney adds that although the effects may not be substantial in some cases, there can be some when a center faces a lawsuit. He says the lawyer representing the facility will need assistance from the management and ownership of the facility. This includes cooperation of facility staff. Mauney says the staff needed to assist in the case will invest substantial time in meeting with legal counsel as well as give deposition testimony.
“It can be time consuming and interfering in some way with the operation of the facility to the extent that it takes staff away. Normally, that can be done in a way that it’s not too intrusive but it certainly can be an issue for some businesses,” Mauney says.
Fisher says that while the effect may not be extreme during the lawsuit, depending on the side of the lawsuit that the center is on, there can be a substantial effect on the future of the business. He says that if a business is attempting to sell amidst or shortly after a lawsuit, the business must keep in mind the expense of paying a judgment, attorney’s fees and other associated costs.
“The way that this impacts your sale is you end up having money withheld from the sale price, put into escrow, or otherwise put off onto the side, so that way there is more money to cover, especially if the seller is the defendant,” Fisher says. “There is money on the side to make sure that you can cover the judgment or any settlement amount as the buyer of the urgent care center wouldn’t want to be on the hook for that.”
Saving Face: The Aftermath
Mauney says if a case is concluded through a settlement, the terms of settlement normally include that the facility does not admit to any misconduct.
“That would be a standard provision in the release, or settlement documents and I think that would, in a lot of cases, be something that they would want to refer to if people have questions about it. They make a business decision to resolve the case, avoid the cost of litigation and the possibility of an adverse verdict against them at trial,” Mauney says.
Fisher adds that once again, the process of reputation recovery is dependent on the nature of the lawsuit.
“If it’s a big malpractice suit, you can frame it as, ‘this was a one time thing..it’s an unfortunate consequence,’” he says.
According to Fisher, at the same time, the recovery process depends on how much publicity the case has generated.
“It may be that the case flies under the radar and you don’t need to address the issue further. It’s really just making sure that you are in control of the message that is going out about it and that you are framing how that message is presented,” Fisher says. “I suggest not running from the issue, but showing how you have learned from a particular issue and how it is improving practice going forward.”
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