Patient wins $88,000 verdict when doctor reports possible fraud
Letter to insurer suggests surveillance, says patient is malingering
A Texas jury has awarded a man $88,000 from a physician who wrote an unsolicited letter to the man’s insurer, saying the man’s disability status was dubious, and he was trying to "milk the system for as much as it’s worth."
Nearly everyone familiar with the case agrees the letter is a good example of how not to relate your doubts about a patient’s disability status to the insurer. The doctor and his attorney insist it was appropriate for him to express his skepticism to the insurer, but the way in which he did so became the center of attention when the patient took the doctor to court.
"People expect doctors to stick to the facts, things like the diagnosis and prognosis, not throw around opinions about the patient’s character," says J. Gregory Marks, JD, in Dallas, the attorney representing the patient. "A jury doesn’t like to see that a doctor will make that kind of statement behind the patient’s back."
The jury agreed with the patient’s contention that the letter amounted to libel, breach of fiduciary duty, and tortious interference with contract.1 The case is on appeal, and the appellate court is expected to hear it before the end of the year.
The legal wrangling involves a self-employed Texas electrician who had injured his back and been declared disabled. He was seeing a physician regularly for treatment and also for the monthly disability reports required by the man’s insurer.
Physician became suspicious of disabled patient
After treating the man for about four years, the doctor grew suspicious about his patient’s claim that he was still disabled and unable to work. Though he continued to attest to the disability on the monthly reports to the insurer, the doctor decided that he should report his suspicions to the man’s insurer. He wrote a letter to the insurer outlining his skepticism and using language that everyone, including the doctor’s own lawyer, agrees was blunt and harsh.
Among other statements, the doctor said in the letter that the man probably was working while receiving disability payments and was an example of another healthy young man trying to "milk the system for as much as it’s worth, and I hate to be a part of it." (For the text of the entire letter, see p. 28.)
As a result, the insurer later sued to cut off the man’s disability payments and the doctor’s letter was its primary evidence. The patient, in turn, sued the doctor. A jury recently awarded $88,000. (For an occupational health program manager’s view of the case, see the story on p. 27.)
Letter offered opinions, not medical facts
The patient’s attorney tells Occupational Health Management that the physician contradicted himself by continuing to attest to the disability each month on the required forms, even after sending the letter accusing the patient of malingering and fraud. Marks says he thinks the doctor was resentful that the patient expected him to attest to the disability each month even though he was unwilling to come in for treatment as the doctor recommended. The doctor also may have feared the insurer would come after him for participating in fraud if he did not report his suspicions.
"You might say he was trying to be nice to the patient by not refusing to fill out the disability form but still wanted to express his concerns to the insurer," he says. "That would be a generous assessment, and even so, he did it the wrong way."
Marks says it never is acceptable for the physician to go behind the patient’s back and make charges of fraud. Any information released to a third party must be approved by the patient, he says, and the general agreement between doctor and patient only allows for the transfer of factual medical information. Opinions about the character of the patient get the doctor into "very dangerous territory."
The letter begins with the doctor asking for clarification of his obligations since he no longer believes the patient is disabled. The doctor’s letter includes a statement that he does not trust the patient and recommends that "maybe surveillance may provide you with some interesting information." The opinions continued to flow forth in the doctor’s deposition, according to Marks, with the doctor stating that he based his skepticism not on medical findings but on a gut feeling and the patient’s "shifty eyes."
There is a clear moral to the story for occupational health physicians, the attorney suggests. If you have doubts about the patient, talk to the patient before firing off a nasty letter to the insurer. The doctor’s attorney disagrees, but Marks says the doctor never told the patient he had written the letter.
"The jury felt overwhelmingly that if you have a problem with me, you should discuss it with me before you tell the insurer about it," he explains.
Comments went overboard
The doctor’s lawyer contends that the physician did discuss the skepticism with his patient. Robert W. Buchholz, JD, of Dallas is adamant that his client was within his rights to report his suspicions to the insurer, but he still admits that the physician may have been imprudent in the way he phrased his comments. Unfortunately, the wording in the doctor’s letter was striking enough to lead the jury to focus on it, and not the contention that the doctor was only doing his duty by reporting his suspicions.
"He could have been more tactful, but he did nothing wrong," Buchholz explains. "He feels he should not have used the phrase about another fine young man trying to milk the system,’ but if he had said it more diplomatically, this case still would have been filed."
Buchholz points out that the patient had sued his insurer twice before for cutting off disability benefits, and he suggests that the doctor made himself an especially attractive target for a third lawsuit by using colorful language and not couching his criticism in legally safe terms. The attorney suggests that physicians be careful in how they express skepticism and stick to professional terminology.
Nevertheless, Buchholz says he is confident that the appellate court will reverse the judgment. The patient and his attorney have offered to settle the case for a fraction of the trial award, but the doctor has steadfastly refused any compromise.
"My client will never pay this man a dime," Buchholz declares.
Reference
1. James D. Papa v. James O. Royder, DO, FAAO, No. 352-156844-94, Tarrant County (TX) District Court (July 3, 1996).
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