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Risk managers must work well with legal counsel, but doing so is not automatic. Take the right steps to improve communication.
• Understand each other’s roles and responsibilities.
• Establish good communications early, even before a case arises.
• Risk managers with legal backgrounds should avoid overstepping their roles.
Risk managers and legal counsel work closely in any healthcare organization — or, at least, they should. Neither can perform optimally without relying on the other, and a poor working relationship can endanger the organization.
However, that good working relationship does not happen without some effort. Risk managers should take the initiative to cultivate good interactions with both in-house and external legal counsel.
One of the biggest mistakes in this relationship involves a breakdown in communication between the risk manager and defense counsel, says Diane Doherty, senior vice president of Chubb Healthcare in New York City. Many of the efforts focus on communication and teamwork.
Medical professional liability cases are among the most complex medical cases to litigate and require a defense firm with specialized knowledge, experience, and a successful track record, she says. The risk manager will remain directly involved during litigation, and good lines of communication are essential.
“The more direct the communication, the greater likelihood of an optimal resolution of the claim,” Doherty says. “To avoid a breakdown in communication, risk managers should proactively develop clear and concise guidelines for the defense counsel to ensure only the highest-quality legal services are provided.”
Establishing good communications with legal counsel is essential long before a malpractice case arises, she notes. It is important to recognize that no hospital or provider is immune from professional liability exposures, she says. She adds that the best approach for defending medical malpractice claims is to pre-emptively establish a comprehensive and effective claim and litigation management program, spearheaded by the risk manager.
This program should define responsibilities and ensure transparency around costs and expectations related to medical malpractice lawsuits. A risk manager who takes a proactive approach when it comes to professional liability claims and litigation management can affect the healthcare organization’s resources and bottom line positively, she says.
The risk manager’s responsibilities should include selecting an experienced, knowledgeable defense firm, consistently and effectively communicating with outside counsel, helping control legal expenses, auditing performance of the defense firm, and managing hospital C-suite expectations, Doherty says.
Sometimes, billing processes can derail a relationship and cause trouble internally for the risk manager, Doherty says.
“A risk manager’s goal is to provide effective litigation management while also controlling expenses. This can be challenging for both the risk manager and legal counsel depending on the type of case,” she says. “Litigation can be quite costly and if not properly managed, legal costs can become enormous, especially when the life of the claim goes on for an extended period of time. Also, specialty experts and trial costs can be expensive.”
A successful claims and litigation program must balance how best to spend defense costs while trying to minimize settlements, Doherty says. Establishing comprehensive and standardized billing protocols that include legal counsel’s estimated budget for each claim, updated regularly, helps to reduce the likelihood of any surprises.
In addition, Doherty says the protocols also should address billing rates, frequency of billing, expenses, travel expenses, use of multiple attorneys, and research activities.
“Timely and effective communication between the risk manager, legal counsel, and insurers, when applicable, are essential, as ineffective communication can create unnecessary barriers to the successful resolution of a case,” Doherty says. “At the end of the day, active communication ensures coordinated activities, collaborative decision-making, and the implementation of realistic strategies and good business judgment.”
The challenge is establishing a relationship of trust between the risk manager and counsel, says David Richman, JD, partner with the law firm of Rivkin Radler in Uniondale, NY. Particularly in the case of outside counsel, the burden is on the attorney to establish trust with the risk manager — as the risk manager is the client, he says.
At the same time, the risk manager must have an open mind and be willing to trust counsel, to know that the advice is well considered, Richman says. That will depend in large part on how the attorney communicates with the risk manager, he says.
“The worst thing that the attorney can do is let the risk manager be surprised by the information or a change in strategy. That burden of reducing or eliminating surprise addresses so much of what mistakes can sour the relationship,” Richman says. “The relationship can be damaged greatly if counsel fails to be accountable and readily available, or if counsel fails to advise the risk manager of problems with the litigation. The risk manager often is involved with setting reserves in a case and the last thing you want is to make those adjustments in strategy or thinking without current knowledge.”
Richman says a good defense attorney considers it a top priority to report regularly to the risk manager and to make the risk manager’s job easier, even to make the risk manager look good within the organization, he says.
Risk managers should hold counsel to high expectations for the value of their work, Richman says. He notes that too often, counsel’s reports to risk managers will be essentially just a synopsis of the records that were provided.
“That is worthless and you haven’t earned the money you’re being paid,” he says. “Counsel should be analyzing what is in the record and how it affects the strategy that was being formulated up to that point.”
Richman is a strong believer in holding face-to-face meetings with the risk managers at the hospital, saying they yield far better communication than just relying on emails and documents. A risk manager also should require telephone conference calls or videoconferencing at key moments in the litigation, to discuss strategy and essential tasks.
If the risk manager believes that legal counsel is not providing enough communication or the right kind of communication, Richman says you should pick up the phone and say so. Don’t wait and let the relationship deteriorate further, he says.
Risk managers can sour the relationship as well. Richman has seen instances in which risk managers thought they had not received reports from legal counsel and rather than inquiring directly with the law firm, which closely tracks the delivery of reports, the risk manager complained to his or her superior at the hospital, who then complained to the managing partner at the law firm.
“That puts counsel in a very bad position because they know they didn’t do anything wrong, but if they push back they can make the risk manager look bad in his or her own organization and undermine that relationship,” Richman says. “It’s those kinds of things that damage a relationship, so try not to go over the head of someone and get everyone’s bosses involved if you don’t have to.”
If a hospital or health system employs in-house counsel, risk managers should develop a close relationship, says John C. Ivins, Jr., JD, partner with the Hirschler Fleischer law firm in Richmond, VA. Keep in mind that a health system’s in-house counsel may be responsible for multiple facilities and all the related issues, he says, and unlike outside counsel may be unable to give you as much hand-holding.
Outside counsel should see the risk manager as a client and work to make him or her happy, whereas in-house counsel has other risk managers and systemwide concerns that will necessitate a more streamlined interaction.
That means communication with in-house counsel should be complete and clear, Ivins says. The problem you’re bringing to the attention of in-house counsel may be the biggest problem your hospital faces at the moment, but the health system counsel may have an inbox full of similar problems. Ivins suggests that your introductory email about the issue should include a succinct description in the subject line and then information broken into sections like background, key facts, questions, and recommended solutions.
Ivins also reminds risk managers that they cannot assume information is privileged just because they are talking to in-house counsel. There is case law that draws a distinction between when in-house counsel is giving legal advice and when they are giving business advice, Ivins notes.
“Before you put everything in an email, try to make a determination whether it might be some sort of business advice that might not be protected,” he says. “I had a case recently in which the plaintiff wanted to depose the in-house counsel because they had discussed an issue that later was determined to be a business matter and not a legal concern.”
The best approach to the relationship between the compliance officer or risk manager and legal counsel is to view it as a partnership, says Richard W. Westling, JD, an attorney with the law firm of Epstein Becker Green in Washington, DC.
“Each partner has to understand his or her respective role and its limits. Communication, respect, and trust are the keys to any effective partnership,” Westling says. “Taking the time to communicate and to build a respect and trust will go a long way toward making the compliance officer/risk manager relationship with counsel successful.”
Often, an individual serving as a risk manager or compliance officer is trained as a lawyer. That might seem like it would foster a good relationship, but often it has the opposite effect, Westling says.
“Despite that training, that individual is not acting as a lawyer when serving in their risk management or compliance role. It is important to take off the lawyer hat and to leave the legal analysis and opinions to legal counsel,” he says. “Failure to avoid this mistake can adversely affect the existence of attorney-client privilege, which generally does not cover communications by an attorney who is not employed in a legal function.”
Distrust between the two parties, for whatever reason, is a time bomb, Westling says. If either counsel or the compliance officer/risk manager believes they are not in this effort together, the relationship is doomed.
Another problem is failing to understand the differences in their respective roles.
“A compliance officer is focused on developing a compliant culture, monitoring for compliance, and reporting noncompliance up and out. In-house legal counsel is, in some cases, thinking more about liability, which can result in a desire to overcontrol an issue and to think too defensively,” Westling says. “The result is that these individuals find themselves at cross purposes and unable to resolve the issue. It is essential that these key corporate leaders learn to walk in one another’s shoes so they can see that a coordinated approach will be best for the company.”
Risk managers should take an active role in communicating with and assisting legal counsel as early as possible in any case, says Sara Obermark, JD, a shareholder and head of the healthcare group with the law firm of Sandberg Phoenix in St. Louis.
“For example, when a case is assigned to outside counsel, it is extremely beneficial when the risk manager immediately prepares the medical chart for production to the attorney, provides any internal investigation completed, and identifies those providers involved and whether they remain employed by the hospital,” she says. “The most common mistake is waiting too long to obtain information for legal counsel.”
Typically, legal counsel sends discovery to the risk manager to assist in answering and document requests, Obermark says. If the risk manager waits too long to work on obtaining the information, it can become stressful for everyone as legal counsel is trying to meet the deadline, she says.
Risk managers also can derail the work of a defense attorney, intentionally or inadvertently, Obermark says.
“In one instance, I had a risk manager sit in on the preparation of a nurse for her deposition,” she recalls. “The risk manager did not like some of the information the nurse was providing and made it known, which only resulted in the nurse no longer wanting to cooperate with the defense of the case.”
The risk manager and legal counsel need to work as a team, Obermark says, and that requires an understanding of each other’s roles and work methods.
“The risk manager needs to understand legal counsel is going to request a significant amount of information that may be difficult to obtain. Legal counsel is not trying to make the risk manager’s job more difficult,” she says. “At times, I think risk managers get frustrated with the number of requests they receive from counsel, which can cause tension in the relationship.”
• Diane Doherty, Senior Vice President, Chubb Healthcare, New York City. Phone: (212) 703-7120. Email: email@example.com.
• John C. Ivins Jr., JD, Partner, Hirschler Fleischer, Richmond, VA. Phone: (804) 771-9587. Email: firstname.lastname@example.org.
• Sara Obermark, JD, Shareholder, Sandberg Phoenix, St. Louis. Phone: (314) 446-4236. Email: email@example.com.
• David Richman, JD, Partner, Rivkin Radler, Uniondale, NY. Phone: (516) 357-3120.
• Richard W. Westling, JD, Epstein Becker Green, Washington, DC. Phone: (629) 802-9251. Email: firstname.lastname@example.org.
Financial Disclosure: Author Greg Freeman, Editor Jill Drachenberg, Editor Jonathan Springston, Editorial Group Manager Terrey L. Hatcher, Nurse Planner Maureen Archambault, and Guest Columnist Jeanne Braun report no consultant, stockholder, speaker’s bureau, research, or other financial relationships with companies having ties to this field of study. Consulting Editor Arnold Mackles, MD, MBA, LHRM, discloses that he is an author and advisory board member for The Sullivan Group and that he is owner, stockholder, presenter, author, and consultant for Innovative Healthcare Compliance Group.