Hospital Held Liable for Financial Responsibility of Doctor even though hospital had no medical liability In December 2003, the Third District Court of Appeals found Mercy Hospital in Miami liable for the failure of one of its doctors to meet financial responsibility. In this case, a physician with privileges at Mercy had three separate malpractice suits. Each claim had a judgment in excess of $250,000.      The doctor, due to the magnitude of these concurrent claims, ended up seeking protection through voluntary bankruptcy. Even though the hospital was not found liable in any of the three suits, the courts required Mercy Hospital to pay $250,000 in each of the cases, totaling $750,000. Under Florida law, physicians are required to carry a minimum of $250,000 / $750,000 coverage.   However, they are exempt from carrying liability insurance if they agree to be financially responsible for this amount within 30 days of a final judgment.The statute specifies that the Department of Health may revoke a doctor's license for not paying the judgment. State law makes no reference to any requirements for hospitals to be responsible for doctors' financial responsibility issues.   How is this possible? The court found that by Mercy Hospital granting the physician privileges, it was their onus to ensure that he met all requirements of the financial responsibility laws. Exactly how a hospital could realistically do this is not made clear by the court. In discussing this case with hospital representatives, they said, "What are we supposed to do, check doctors' bank balances on a monthly basis?" Plaintiff lawyers now assume that they can get up to $250,000 from hospitals. Many pro-physician lawyers who reviewed this case have commented that it is simply bad law. The problem is that there are now three cases in Florida, (Paschall, Baker, and Mercy Hospital) that support this position. It is not yet known whether the Florida Supreme Court will hear this case. Holy Grail for the Trial Bar? It appears that these cases have become the new Holy Grail for plaintiff attorneys. They now seem to feel that even if they sue a bare doctor with no assets, they can "always go after the hospital".  They view that the hospital will always have to pay up to $250,000. How does this affect Doctors? Doctors may still be safe. It should be noted that the doctor in this case didn't lose any personal assets because apparently they were well protected. The real difficulty is that this case may drive a rift between hospitals and self-insured physicians as the hospitals start to consider them as liabilities. We have already seen moves by hospitals to force doctors to start carrying insurance or establish escrow accounts or letters of credit for $750,000. These options are not practical for most doctors who have already gone bare.  Conclusion PAA will cover this issue further as it develops. This latest case is another twist to Florida's worsening malpractice crisis. Doctors need to adapt their personal asset protection planning as these changes occur.  Singer Xenos does not provide legal advice. Please consult with your own legal counsel.