As expected for some time, Florida’s limits on non-economic damages has been ruled unconstitutional by the Florida Supreme Court. This event will likely drive medical malpractice premiums up and have healthcare providers reexamining (a) whether it makes more sense to “go bare” (without liability coverage), and also (b) their corporate structure to minimize exposure to professional liability claims.
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.
Physician asset protection and licensing a medical device are two areas of the legal field we know very well. Every year, doctor’s around the state are creating new devices, procedures and medications that improve the care of their patients. While ensuring the quality of your creation, the want to make sure that you are protecting your creative properly and ensuring that the quality is not jeopardized either. So how do you protect yourself and your assets? That’s something you need to ask an attorney as they will be able to properly advise you on what to do, what not to do and how to put yourself in the most legally secure position moving forward.
The Florida Healthcare Law Firm has assisted clients with physician asset protection for years and is happy to help you with any questions you have. As you begin to look at your options online, be sure to contact us for facts, not speculation. Online resources are helpful but you should never rely on them as your main source of information. Our experienced team will guide you to the proper decisions to ensure you get the best service possible and are able to properly protect your assets.
Should you consider asset protection planning as part of your estate planning? The short answer to this question is yes if you have significant assets, will inherit sizable assets, or work in a profession that is routinely sued pursuant to medical malpractice complaints. In particular, healthcare professionals should go the extra mile when it comes to asset protection in light of the McCall and Kalitan cases out of the Florida Supreme Court and Fourth District Court of Appeals, respectively, invalidating the limit on non-economic damages in medical malpractice cases. So how can asset protection be accomplished?
Protecting your assets and preserving wealth can be accomplished through a variety of planning techniques. These techniques are used to protect assets from being wasted or levied against in a medical malpractice suit. Asset protection planning is part of estate planning, which should be reviewed whenever an individual has a significant change in life circumstances, becomes aware he or she will inherit a sizable investment or asset, or enters a profession that is considered to carry considerable risk.
The intent of asset protection is to protect assets from waste or exposure to potential creditors, without concealment or tax evasion. Asset protection can preserve wealth for use later in life or to be passed on to descendants, that is, children or grandchildren, or perhaps other family members.
Asset protection can be maximized through various vehicles such as:
Health law is the federal, state, and local law, rules, regulations and other jurisprudence among providers, payers and vendors to the healthcare industry and its patient and delivery of health care services; all with an emphasis on operations, regulatory and transactional legal issues.