Public Health Law Map - Beta 5 - Medical and Public Health Law Site

defense lawyers to fight claims that are better settled, so defendants must be attentive
to their own best interests.
a) Criminal Settlements
Since most of a criminal investigation is over before the defendant is charged, the
defendant does not know what is being investigated, who the investigators are
talking to, or what information they have developed. It is not unusual for criminal
investigations to be carried out for a year or more. In some of the
Medicare/Medicaid false claims cases that have been settled, the government
investigated the case for 3 years before confronting the defendants. This allows the
prosecutor or U.S. Attorney to put the defendant under tremendous pressure: the
defendant, say a major hospital and its administrators, is threatened with civil and
criminal prosecution, potential fines in the hundred- million-dollar range, and an
offer to settle for $10,000,000 and a misdemeanor plea from the administrator. They
have a day to decide. They know there are some problems, but have no idea what
the government knows. The downside, even if they win, is huge attorney’s fees (not
paid by insurance) and months or years of adverse publicity. If they lose, it can be
prison for a felony conviction and a mandatory fine that will cripple the institution.
In this situation, almost all corporate defendants settle the case and pay the fine. As
long as the government sets the fine at a level that will not cripple the institution,
few institutions are willing to take the risk of a jury trial. Although the institutions
often accuse the government of extortion in such cases, the reality is that the
government usually only goes after serious cases and only threatens to charge the
defendants when it has substantial evidence. The government does not want to try
most of the cases because it costs so much money and takes so much personnel
time that it may draw critical resources from many other investigations.
The settlement decision is harder for individual defendants, especially physicians
and other licensed medical care practitioners. If they plead to a crime, they will
usually lose their license to practice. If the crime involves fraud against a federal
program, they will be barred from treating federal pay patients and from working
for any entity that treats federal pay patients. This would include almost all
hospitals and clinics. Even if they avoid prison, their career will be ruined. They
have a strong incentive to fight the charges, at least long enough to see more of the
government’s case to make a more informed settlement decision.
b) Civil Settlements
In most civil cases, the plaintiff’s attorney will contact the potential defendants and
try to negotiate a settlement before filing a lawsuit. To encourage this informal
resolution of claims, some states require that defendants in medical malpractice
lawsuits be notified some period—perhaps 60 days—before a lawsuit is filed.
Medical care practitioners contacted by an attorney with a claim that is covered by
the practitioner’s insurance should notify their insurer at once and not talk to the
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