More on high-low agreements
Fam Pract Manag. 2007 Jul-Aug;14(7):15-16.
I liked Dr. Peter G. Teichman's article “How High-Low Agreements Work in a Malpractice Case” [May 2007]. However, the article incorrectly states that the “winning” defendant will suffer career-long consequences of disclosure to the National Practitioner Data Bank (NPDB). According to the most recent NPDB Guidebook, reporting a win for a defendant in a liability case, whether by jury verdict or arbitration, is not required.
Mr. Feci identified an error in my statement regarding reporting to the NPDB payments made to plaintiffs in high-low agreements. I regret the error and am grateful for his insight and for the opportunity to provide clarification.
Per the NPDB Guidebook, payments made by an entity to satisfy a written claim or judgment against a practitioner, in whole or in part, must be reported to the NPDB. Individuals are not required to report payments made for their benefit out of personal funds.1
Payments made because of a high-low agreement should be reported to the NPDB if the defendant practitioner has been found to be liable by a fact-finding authority and payment is made at the high end of a high-low agreement; if the plaintiff and defendant settle the case (with payment) prior to the conclusion of a trial; or if binding arbitration determines a payment amount without a determination of liability.1
Payments made after the execution of a high-low agreement do not need to be reported to the NPDB “… if the fact-finder rules in favor of the defendant and assigns no liability to the defendant practitioner. In this case, the payment is not being made for the benefit of the practitioner in settlement of a medical malpractice claim. Rather, it is being made pursuant to an independent contract between the defendant's insurer and the plaintiff.”1
1. The National Practitioner Data Bank Guidebook, Chapter E Reports. U.S. Department of Health and Human Services: September 2001. Available at: http://www.npdb-hipdb.hrsa.gov/pubs/gb/npdb_guidebook_chapter_e.pdf. Accessed June 4, 2007.
Dr. Teichman's article on high-low agreements is an excellent presentation about the “sausage making” that occurs behind the scenes in our legal system. I have noticed an additional problem when high-low agreements are agreed upon in the pretrial period: Since the potential loss or gain for either side is already set, I have seen malpractice insurance companies apply a cost-saving approach to their trial preparation by using less qualified (and less expensive) litigators and hiring less expensive and fewer expert witnesses. Obviously this can have a negative effect on the trial outcome for the physician defendant.
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