Settling a Liability Case Early Impacts the Expense of a Claim

Al Hamlin Case Study

Al Hamlin, Hamlin & Burton
Al Hamlin, Hamlin & Burton

CASE STUDY

Settling a case of liability early can greatly impact the indemnity and expense dollars of a claim. Settling a case of liability early, while leveraging causation arguments, all without incurring the expense of defense counsel and formal experts, is a true success story.

Mary was a 91 year old widow when admitted for rehabilitation to a Five Star rated, non-profit facility. Having been hospitalized for diverticulitis, she also suffered with longstanding congestive heart failure (CHF) for which she took Lasix.  The rehabilitation plan was to continue antibiotics, help her regain her strength and return her home.  

On Day 28, Mary reported she did not feel well and upon standing, she developed syncope with a rapid pulse.  A physician was called who examined the resident. Weight gain of 4.6 lbs. over one day was noted. The physician ordered an increase in Mary’s Tenormin, a blood pressure medication, from 25mg. to 50 mg. The order also included monitoring of vitals and to report any signs of an acute problem.

Noteworthy is that the medication increase was never entered into the facility’s health records system and, in turn, Mary never received her increased dosage.  Monitoring of vital signs did take place at each shift over Day 28. However, on Day 29, monitoring of vitals occurred only once (during the 2nd shift). None of the documented vitals, however, were concerning or indicative of change in condition.

On Day 30, at 12:45 AM, acute changes in condition were noted including a blood pressure reading of 64/50, rapid pulse of 160 and the resident reporting she felt “terrible.”  Mary’s doctor was notified and he ordered Mary be sent to the local Emergency Department. A cardiology consult was obtained at the hospital which revealed a diagnosis of inferior myocardial infarction. Mary was not a candidate for catheterization. The family agreed to a Do Not Resuscitate (DNR) status. After a two day admission, Mary returned home on hospice and died three weeks later.  The death certificate listed congestive heart failure and coronary artery disease as the causes of death. 

Eight months later, a lawyer sent a letter of representation to the facility. Claimant counsel alleged the failure to carry out the increased Tenormin order increased Mary’s risk of suffering a myocardial infarction. Further, claimant counsel alleged the failure to monitor vitals more frequently on Day 29 led to a delayed recognition of Mary’s deterioration and untimely transfer to the hospital. Claimant attorney alleged that earlier admission to the hospital would have prevented Mary’s death.

As there was no arbitration agreement in effect, the case was expected to proceed in circuit court if the matter was not resolved pre-suit.  Brad Butterfield, a HealthCap Litigation Manager, was assigned the case. Brad conducted a complete investigation including a clinical review of the issues with the facility’s Medical Director. The Medical Director opined that the staff had failed to adequately monitor the resident during Day 29.  The Medical Director also pointed out that Mary had significant pre-existing conditions that put her at risk for a myocardial infarction. This provided leverage during negotiations as it cast doubt on the causal relationship between the Tenormin/monitoring issues and Mary’s infarction and death.  Armed with causation arguments but difficulties on standard of care, the facility agreed it was a case that should be resolved pre-suit. This fit well with HealthCap’s philosophy of proactive resolution of targeted claims without incurring substantial legal expense.  

The potential jurors in this county are considered moderate to conservative. Virginia’s cap on damages was $2,300,000, including economic, non-economic and punitive damages, thus reducing the risk of a runaway jury verdict.

Negotiations between Brad and claimant’s counsel began with an initial demand of $325,000 and an initial offer of $50,000.  As negotiations continued with Brad pitting causation defenses against claimant counsel’s liability arguments, the demand gradually decreased. When a final offer of $125,000 was made, it was accepted. 

Settling a case of liability early can greatly impact the indemnity and expense dollars of a claim. Click To Tweet

Because there were zero defense attorney fees nor any other legal expenses, zero, the total cost of resolving this claim was only $125,000 and we consider that a fantastic resolution for the HealthCap and its member-owners.

HealthCap’s expertise, experience and philosophy allowed for a proactive resolution of this claim.  HealthCap members have far fewer claims than the rest of the industry.  The proactive, opportunistic resolution of this claim is an example of why HealthCap’s average claim severity is half the industry average.