Faulty Referral Management Raises the Risk of Malpractice Claims and Tragic Effects

Posted by Jeremy Guttman on 1/27/17 5:05 AM


What you don’t know can hurt you.

When practices fail to manage a standard and consistent patient referral process across all locations, patients get sicker. And when PCPs and specialists aren’t on the same page about a patient referral, urgent health conditions worsen while important diagnoses get missed or delayed.

But a defective referral communication process isn’t just a big problem for patient care - it’s also a big problem for medical practices’ morale and bottom lines. Practices often get sued for medical negligence when a patient referral falls through the cracks.

Referrals play a role in an immense number of medical malpractice claims. Patient handoffs in medical settings contribute to 20% of diagnostic errors that lead to malpractice suits1.

And referral tracking issues came up in 55% of cases for high-severity missed-diagnoses malpractice claims, according to the director of loss prevention at the Harvard Risk Management Foundation2.

Referral-related failures

Delayed colorectal cancer diagnoses is one of the most common reasons for malpractice claims in general practice3.

According to a study of almost 6,000 malpractice claims published in the journal Quality & Safety in Health Care, 1 in 4 medical malpractice claims were due to the following referral-related system failures:

  • Treatment delays
  • Failure to recognize complications
  • Failure to supervise or monitor case
  • Failure/delay in referral

These inadequate processes and system failures lead to “tragic effects4."

[1-CLICK DOWNLOAD] Industry Stats on Care Coordination:   VIEW INFOGRAPHIC

After no one followed-up with her, she developed breast cancer

There are a number of cases that result in “classic fumbles5” between specialists and PCPs when communication between the two practitioners fails.

In one case, a 38-year-old woman was supposed to have a follow-up test a month after a appointment with a surgeon. To arrange for the patient to get the test, the PCP assumed that the specialist would follow-up with the patient and the specialist assumed that the PCP would follow-up. The patient never got the 1 month follow-up test because no one contacted her about it and nine months later she had a large mass and was diagnosed with breast cancer.

In another case, a newborn baby died despite having the same abnormal lab test result twice within three days of being born. One doctor went on vacation after ordering a lab test and another doctor didn’t have accurate contact information for the mother, and none of the physicians communicated with each other or had access to test results from the other physicians.

Both of these cases resulted in malpractice lawsuits against the treating physicians.

Malpractice Risk Leads to Wasteful Defensive Medicine

One unfortunate consequence of malpractice lawsuits is that physicians end up practicing “defensive medicine." Physicians will order unnecessary tests, procedures and medicines to avoid lawsuits. Defensive medicine is rampant: $650 billion can be attributed annually to defensive medicine, which is one in four dollars spent in all of healthcare. According to Health Affairs, perceived risk causes physicians to manage care this way.

Defensive medicine doesn’t just add unnecessary costs to the healthcare system. It also affects physician morale. Liability and defensive medicine pressures were rated as the least satisfying aspect of medical practice, according to a Physicians Foundation survey in 20126. The average malpractice claim takes four years to close, and “during that time the physician has to live under the cloud of litigation.” The average physician spends 11% of his/her career with an unresolved, open malpractice claim. Having to deal with lawsuits, no matter how frivolous, takes up endless hours of expensive physician time. And doctors are personally liable for for malpractice risks under the current system.

Many initiatives have been forged to address defensive medicine, including the Choosing Wisely campaign, which even released a light-hearted music video that emulated Pharrell Williams’ song Happy. But most initiatives to reduce defensive medicine have not made much of a difference, according to Medical Economics. Some argue that the best way to address defensive medicine is to be more communicative.

“If you want to fix defensive medicine, develop trusted therapeutic relationships using effective communication skills and be available to patients, period.”

Just Making Records Electronic Won’t Solve This Problem

Electronic records help greatly with communication problems in healthcare. The odds of adequate communication between PCPs and specialists is 11 times lower when there is no exchange of electronic records7.

However, it turns out that simply adopting electronic health charting systems does not help reduce malpractice claims related to tracking patient referral status. EHR systems don’t help with referral-related malpractice claims because they are not interoperable. “Not all doctors have access to the electronic charts, and many information systems do not talk to other systems...they don't solve the problem of who takes ownership and accountability for the patient."

[INFOGRAPHIC] 8 Referral Management Stats You Need to Know:   VIEW INFOGRAPHIC

Referral Management Reduces Malpractice Risk

According to the Doctors Company, the nation’s largest physician-owned medical malpractice insurer, “[w]hen referring a patient to a specialist, you should have a mechanism in place to alert you if a consultation report is not received back in a timely manner. If it was important enough for the patient to see a specialist, then receiving the consultation report is of equal importance. An adequate tracking system can help reduce risks and help you provide safe, high-quality care.”

One way that e-referral tracking systems reduce malpractice risks is by providing better care coordination. “The system can provide a method for: verifying that the patient keeps the appointment; confirming receipt of the consultant report; prompting a call to the consultant if a report is not received; making sure the physician sees the report; and arranging for a follow-up appointment if necessary. If the patient fails to keep the appointment with the specialist, the staff can then contact the patient with a reminder of the importance of following through with that recommendation.” Referral tracking reduces the chances of patients having missed or delayed diagnoses, which reduces the number of situations that would lead to a lawsuit.

In addition to reducing the chances of getting sued, electronic referral tracking systems also reduce practices’ liability exposure after getting sued by recording referral-related communications. It is common for patients to claim in a malpractice suit that physicians did not stress the importance of a referral, did not explain the reason for a referral, or were presented with the referral as an option rather than a recommendation. But if physicians keep records regarding conversations with patients and colleagues with electronic referral management systems, they can prove that there was no miscommunication concerning a patient’s care. One referral coordinator at a health system in Pittsburgh has noted that “if you can transmit information non-verbally, then you have a record of it as well. Then you have it and I have it and everyone is happy.”

With electronic referral management, doctors and physician practices are happier because they have reduced malpractice risk and fewer liability concerns. That gives them more time to focus on what matters most: making their patients happier and healthier.

View Infographic


1) Annals of Internal Medicine | http://www.ncbi.nlm.nih.gov/pubmed/17015866

2) http://www.ahrq.gov/sites/default/files/wysiwyg/professionals/quality-patient-safety/patient-safety-resources/resources/advances-in-patient-safety-2/vol3/Advances-Gandhi_22.pdf

3) Quality Management in Healthcare | http://www.ncbi.nlm.nih.gov/pmc/articles/PMC3702372/

4) NCBI | https://www.ncbi.nlm.nih.gov/pmc/articles/PMC1743812/

5) Medscape | http://www.medscape.com/viewarticle/771933_3

6) Physicians Foundation | http://www.physiciansfoundation.org/uploads/default/Physicians_Foundation_2012_Biennial_Survey.pdf

7) Milbank Quarterly | http://www.ncbi.nlm.nih.gov/pmc/articles/PMC3160594/pdf/milq0089-0039.pdf


Topics: Referral Management, Closed-Loop Referrals, Malpractice