Does insurer refuse to pay for referral? It won’t protect MD from liability

Physicians have the responsibility to refer a patient or consult with a specialist when they know that highly skilled treatment might thereby be obtained, says Katherine A. Miller, RN, CPHRM, a risk/claims consultant at SISCO, a subsidiary of RCM&D, a Baltimore-based provider of insurance consulting and risk management services.

This step can be problematic for doctors working in HMOs, when the HMO tries to restrict their ability to make referrals and gives them monetary disincentives to make referrals, says Miller. “An HMO’s refusal to allow a referral does not protect a doctor in a medical malpractice case,” she warns. “The doctor must at least try to make the referral.”1

A physician who does not seek or recommend a specialist’s advice, when a reasonably prudent practitioner would do so and a specialist is available, could be held to the standard of care applicable to specialists in the particular area of medicine, says Miller. (See related story on when referrals are required to meet the standard of care, below.)

Thomas G. Gutheil, MD, co-founder of the Program in Psychiatry and Law at Beth Israel Deaconess Medical Center in Boston, says, “The physician gets no protection from an insurer’s refusal to pay for anything. He or she is left to ‘twist in the wind.’

Members of juries generally do not want to hear about rationing of medicine and are not sympathetic to a physician who did not refer a patient to a consultant because a contract required pre-approval, according to Gutheil.

The fact that an insurer or a hospital policy might prohibit the referral does not provide a defense at trial, says Russell X. Pollock, Esq., an attorney with Bergstresser & Pollock in Boston. “Quite often, the defense of these cases is that the failure to make the referral comported with the standard of care, rather than that the physician wanted to make the referral and the insurer or hospital policy forbade it,” adds Pollock.

Put patient first

When determining whether to refer a patient to a consultant, Gutheil says, “The best risk-reduction strategy is to put the care of the patient foremost. This creates an atmosphere antithetical to litigation.”

He advises physicians to obtain “economic informed consent” by discussing with the patient possible sources of payment or alternatives if the referral is not covered by insurance, such as the specialist supervising the treating physician at the patient’s expense.

Given the limited rates of reimbursement many insurers and hospitals are permitting, additional time spent with a patient can be costly. “However, research appears to indicate that physicians who spend more time communicating with a patient and taking extra time to meaningfully understand the patient’s condition, including from the patient’s own vantage point, are less likely to have a claim filed against them,” says Pollock.

Thorough documentation identifying the examination that was conducted, testing requested, plan for follow up, and a note that the doctors spent ample time talking with the patient is usually helpful in defending these cases, “but only if the doctor is indeed practicing good medicine,” says Pollock. “Documenting substandard care is not going to be helpful to the physician.”

Refute plaintiff’s claims

Documenting attempts to have the insurer or hospital cover that referral, and the patient’s refusal to accept the referral because of cost, might provide a defense, but it will require the physician to admit that a referral was appropriate and perhaps necessary for patient care, says Pollock. If that situation it is truly the case, the doctor must find a way to convince the insurer or the patient to allow for the referral.

“This, of course, creates a timely procedural morass for the doctor,” he acknowledges. “However, the physician will likely not regret the effort he or she expended on the patient’s behalf, but might regret the failure to do so.”

Brief consultations by phone, email, or in person provide risk management support for the approach being considered by the physician, and these do not require referral or approval, advises Gutheil.

“Every such consult is a ‘biopsy of the standard of care,’” he says. “The plaintiff’s claim that you did not get a consult is refuted by your crisp progress note about the consult.”


1. American Society for Healthcare Risk Management. Monograph Perspectives on the State of Insurance; May 2002.


Thomas G. Gutheil, MD, Program in Psychiatry and Law, Beth Israel Deaconess Medical Center, Boston. Phone: (617) 626-9658. Email:

Katherine A. Miller, RN, BS, CPHRM, Risk/Claims Consultant, RCM&D/SISCO, Baltimore. Phone: (443) 421-5094. Fax: (443) 921-2519. Email:

Russell X. Pollock, Esq., Bergstresser & Pollock, Boston. Phone: (617) 682-9061. Fax: (617) 451-1070. Email:

Referral to specialist: Legal standard of care? If so, failure to obtain it is negligent

A primary care physician failed to send a patient for a timely consultation with an otolaryngologist, and the patient had an undiagnosed nasal cancer for some time. An emergency department physician failed to call for a timely surgical consult, which allowed a patient’s sepsis to progress.

These are two malpractice cases involving a physician who failed to refer a patient to a specialist for appropriate care handled by Russell X. Pollock, Esq., an attorney with Bergstresser & Pollock in Boston. “In both cases, we were able to establish that the physician departed from the standard of care,” Pollock says. “Had the referral been made as it should pursuant to the standard of care, the patient would not have died or suffered as serious of an injury.”

The physicians’ defense in both cases was that they were reasonable and thereby not negligent in failing to make the referral, and even if the referral had been made, the patient’s outcome would have been similar. “Nonetheless, we were able to obtain a significant recovery for the clients in settlement,” Pollock says. “When viewed objectively, a referral was prudent and would have helped the patient.”

Referral sometimes required

Failure to refer, consult, or obtain supervision are three things that always can be claimed in malpractice litigation, whether the allegations are true or not, according to Thomas G. Gutheil, MD, co-founder of the Program in Psychiatry and Law at Beth Israel Deaconess Medical Center in Boston.

“While referral to a specialist is theoretically always an option, the situation that may well require it is when the treaters are ‘in over their heads’ or are called on to deal with a condition or type of patient they have never seen before and are unsure how to approach,” he adds.

In deciding if the doctor was negligent, the jury will consider whether the failure of the physician to make the referral was a departure from the standard of care of the average qualified physician in the same specialty treating such a patient at that point in time. “If the jury finds that the average qualified physician would have made the referral and the defendant physician did not, the physician was negligent,” says Pollock.

Some factors that come into play when determining whether the referral is required pursuant to the standard of care is the patient’s overall objective clinical picture and whether there is a condition on the differential that is potentially debilitating or life-threatening. “Reliance on the ‘head in the sand’ approach, or a single anomalous factor finding, is usually not well-received,” says Pollock.

Pollock says plaintiff attorneys will look for the primary care physician’s failure to refer when a patient complaint multiple times of the same or a similar issue, without any significant improvement by the physician’s treatment.

“Experts defending the conduct will usually take the approach of claiming the conduct is reasonable by relying on isolated facts or arguing the condition could have been a benign process,” he says. “However, such arguments are easy targets for what the patient’s overall objective picture was.”