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Barry Doyle
Barry Doyle
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Lawsuit alleges collusion between law firm and clinic

3 comments

According to a story that appeared in the Louisville Courier Journal, a Kentucky woman has filed a lawsuit against her lawyers claiming that the relationship between the law firm and the clinic ended up costing her money.

The woman was involved in an auto accident and suffered spinal injuries which eventually required a fusion operation. She hired a law firm with offices in Kentucky and Florida and was referred by the law firm to a chiropractic clinic for treatment. When she did not improve, she was referred by the law firm to a clinic in Florida which performed her spine surgery.

When she accepted these referrals, she did not know that chiropractic clinic and the surgical clinic were all owned by the same doctor. She also did not know that the law firm she hired and the clinics regularly referred clients/patients back and forth to one another.

Even though she was employed by the state as a correctional officer and had health insurance, the clinics would not bill the health insurance and were instead paid out of the settlement proceeds.

When her case was settled for $200,000, the law firm took $70,000 for its services. The clinic was paid $64,518 based on a letter of protection which the firm issued to assure the clinics that their bills would be paid. The client ended up receiving the smallest share, $62,738, with some money being paid to other health care providers.

The basis of the lawsuit is that the ongoing business relationship between the law firm and the clinics was never disclosed to the client and that she would have received more money had she received care elsewhere through her own health insurance.

The law firm has denied any wrongdoing and has vowed to defend itself.

One mistake that I believe that clients make in hiring a lawyer is when they hire a lawyer who insists that the client go to "our doctors" or when they take referral to a lawyer from a health care provider who says that the patient should be represnted by "our lawyers," especially where they refuse to bill your health insurance and instead say that they will "bill the accident" instead.

When you encounter that kind of situation where the lawyers and doctors are sending clients and patients back and forth to one another, it is one which is rife with potential conflicts of interest. This is because the ongoing business relationship between the lawyers and the doctors are potentially more important to them than zealously advocating the client’s position, including challenging excessive medical charges at the time of settlement.

Also, insurance companies track how often a lawyer represents patients of a particular doctor, and when they see a pattern emerge, they are quick to send the case to the special investigations unit, a.k.a. the fraud unit. Once it is there, it is very difficult to get a case settled in a reasonable way, if ever. The client’s case ends up suffering because of the lawyer’s relationship with the doctor.

In short, you are not doing yourself any favors by getting involved in a case where the lawyer and doctor have an "I’ll scratch your back, and you scratch mine" kind of relationship.

I have no idea whether the allegations in the lawsuit described in news article are in fact true, but it is a pattern I have seen elsewhere. In one case I recently handled , the client suffered a knee injury in a car accident and needed arthroscopic surgery. The surgery was done at an outpatient surgery center. The client was billed about $66,000 when the costs should have been less than $20,000. How did I get involved? I took the case over from another lawyer, who had sent the client to "his" doctor. We challenged the reasonableness of the bills and got the client substantial reductions in the bills which inured to her beenfit. I have my doubts as to whether her former lawyer would have done the same.

I don’t think that there is anything wrong with a lawyer recommeding a doctor to their clients. We do this on rare occasion, probably less than ten times a year, and do so based on the following criteria: 1) board-certified in the relevant area of medicine, 2) top notch reputation, 3) favorable review from former clients, and 4) will stick up for their patients. We have never sent a client to a health care provider based on an expectation that we will receive a referral back from the doctor.

By the same token, I also don’t think that there is anything wrong with taking a recommendation from a doctor as to which lawyer you should hire. Many doctors know who the good lawyers in a field are, and they can be a reliable resource.

However, when you get in the middle of a back-scratching relationship between a lawyer and a doctor, you are headed for nothing but trouble. If there is something that doesn’t seem quite right, if the lawyer and the doctor seem a little too cozy, then you need to ask pointed questions or run in the other direction as fast as your legs will carry you.

3 Comments

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  1. Mike Bryant says:
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    Interesting issue and seems to hedge a lot on how close the relationships are. The ownership of the to medical places is prohibited in a number of states. The damage question is also based some what on what the care was and did the person get helped? Was the cases really worth more? Thanks for the thoughtful piece.

  2. Barry Doyle says:
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    Mike:

    The major issue in the case is not the quality of the care that the client/patient received, but how it was paid for.

    The clinic that she was referred to did not accept health insurance, so she ended up paying full price for that. As you know, most of the time health care providers end up paying a discounted rate, so the client is best served by using health insurance where possible.

    The conflict come in, and the damages occur, due to the client ending up paying a higher total amount for her health care where the lawyer referred the client to the doctor because of the lawyer’s relationship with the the doctor and then failed to contest the reasonableness of the charges.

    My own recent experience with this kind of deal certainly colors my views on this, and I don’t think referrals are bad, but referrals as a part of an ongoing business relationship between the lawyer and the doctor are rife with conflicts of interest and potential for abuse.

    Barry

  3. Mike Bryant says:
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    Sure, but I would still want to know about the quality of care and the persons present medical situation. It usually isn’t as simple as anyone could have solved the medical problem. It is very important that the care that the client gets helps them. I’m not condoning abuse, but as you said in the post, I would want to know more about the allegations.