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No Medical Malpractice Cap Makes Physician Asset Protection Essential

by admin on June 9, 2017 No comments

Florida Supreme Court Strikes Down Medical Malpractice Cap

By: Susan St. John

Thursday the Florida Supreme Court ruled that a law capping noneconomic damages (pain-and-suffering damages) at $1 million in medical malpractice personal injury suits is unconstitutional. Medical malpractice insurance premiums will climb fast now that damage award limits are off. If you’re a physician and you haven’t built limits for yourself through asset protection it’s time to get moving.

Florida Supreme Court Ruling on Medical Malpractice Cap

The Florida Supreme Court’s ruling should come as no real surprise since the underlying case has been working through the court system for some time. Initially, the plaintiff was awarded approximately $4 million in non-economic damages by a jury in circuit court. However, the judge applied the Florida law capping non-economic damages and a government-run hospital’s liability cap statutorily set at $100,000. This reduced plaintiff’s award by over $3 million. Although the lower court concluded the plaintiff’s injuries were indeed catastrophic, the law on caps and government limits was in play. The case traveled through the appellate process and on to the Florida Supreme Court.

The Florida Supreme Court’s ruling that non-economic damages caps are unlawful, i.e, unconstitutional under the equal protection clause, is critical for all professionals in healthcare business to take note of. It is fundamental for professionals and entities alike to look at how their businesses are structured so that they can protect assets that likely having nothing to do with a professional’s or an entity’s performance as it relates to patient care.

Evaluating Medical Malpractice Coverage & Asset Protection

It will also be critical to re-evaluate medical malpractice coverage to ensure coverage is adequate. Keep in mind that medical malpractice insurance may pay out the upper end of liability insurance. However, this may not fully satisfy a judgment entered by a court against a healthcare provider, business or entity. Unsatisfied judgments against an individual or entity will remain recorded in the public records until satisfied. Unsatisfied judgments can make it difficult to grow a business or obtain a loan at favorable rates. They can also lead to collection efforts against the individual or entity, such as having liens placed against unprotected assets, garnishment of wages, obtaining charging orders against limited liability companies, and so on.

Assets need to be protected prior to a case being commenced against an individual or entity or prior to the possibility of a complaint being brought. Ideally, physician asset protection planning should be considered at the start of a new career, or early on in a career. Likewise, asset protection planning for entities should be considered when forming the entity or during the planning phases of starting a new venture. Once a medical malpractice suit has been commenced, or there’s reason to know a suit might be brought, asset protection planning options become severely limited. Be prudent – start thinking about asset protection planning before you have problems.

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