How to Properly Handle Patient Refunds and Avoid Disputes
Marc Leffler, DDS, Esq.
March 25, 2023
Reading time: 7 minutes
L was a 61-year-old woman, a retired elementary school music teacher, who had been a general dentistry patient of Dr. T for more than 20 years. Other than her taking a widely used bisphosphonate medication, prescribed by her gynecologist for generalized osteopenia, L was a patient with an essentially benign medical history.
Several years prior, L lost tooth #31 after she vertically fractured it when biting into a hard candy. In consultation with Dr. T, she decided at the time not to replace the tooth, and instead try to function without it. But, when tooth #30 developed an endo-perio lesion with furcation involvement, thereby necessitating its extraction, dentist and patient both agreed that this was an appropriate time to place and restore implants in the right posterior mandible. After a complete clinical and radiographic work-up, and a documented, interactive informed consent process, Dr. T extracted tooth #30, removed the associated granulation tissue, and immediately placed implants at the sites that teeth #30 and 31 had previously occupied.
Despite Dr. T having meticulously performed the procedures and having prescribed a course of suitable antibiotics at the time of surgery, the implant placed at the extraction site never integrated, so it was removed. Dr. T suggested that he could place a 3-unit bridge, incorporating tooth #29 and the implant at site #31 as abutments, and L agreed. During their discussions, L said that she was upset that she had to pay for the failed implant, so she asked for that portion of the fee to be refunded. Dr. T was willing to do that, but told L that he needed to prepare paperwork for her signature before doing so.
Dr. T contacted his malpractice carrier to explain the situation, and the carrier assigned local counsel to prepare a release that would be signed by L prior to a refund check being given. Most significant to the issues here, the release contained language stating that, in exchange for the refund, L released Dr. T from all liability and damages, presently known or unknown, relating to the treatment of tooth #30 and the implant placed at that location. L signed the document and Dr. T handed her a refund check, at the same office visit that preparation for the bridge began; that bridge was completed and inserted less than a month later.
Within a short time, L began to experience pain, swelling, and a whitish exudate from below the pontic. When Dr. T noticed this, he immediately referred L to an oral surgeon, who, based upon clinical and radiographic indicators, and a biopsy of the underlying soft tissue and bone, made a diagnosis of bisphosphonate-related osteonecrosis of the mandible. With non-invasive treatment methods failing to resolve the condition, the oral surgeon performed a small segmental resection of the affected area, which, in conjunction with local measures, led to resolution, but unfortunately caused an injury to the right inferior alveolar nerve – due to the need to excise tissue until healthy bone was reached – which created a permanent paresthesia of the right half of the lower lip and chin. L blamed Dr. T for the uncomfortable result.
A close friend of L, who knew about everything that had taken place, encouraged seeking an attorney for consultation. After deeply considering, for some time, whether to look into suing the dentist with whom she had a relationship for decades, she decided to contact an attorney who advertised expertise with dental malpractice matters. L provided the attorney with copies of her clinical records from the gynecologist, Dr. T, and the oral surgeon, and those were sent on to a potential expert with whom the attorney had worked before. That expert dentist was of the opinion that Dr. T was negligent in failing to take prophylactic steps to prevent the development of the osteonecrosis, which directly led to the nerve injury.
The attorney was aware that the statute of limitations period for filing a case was quickly approaching its expiration, so with the expert opinion in hand that he needed to start the lawsuit, he opted to defer obtaining Dr. T’s complete chart until the discovery phase of litigation, and instead proceeded forward based upon the clinical records that L had given to him. As soon as Dr. T was served with papers, he reached out again to his malpractice carrier and to the attorney who had drafted the release document that L had signed in conjunction with receiving a refund.
Dr. T’s attorney employed an approach that is not often taken, but which is entirely proper: in lieu of the usual legal “answer”, Dr. T’s attorney filed a motion to dismiss the case on the ground that L had signed a release which held Dr. T harmless as against “all liability and damages”, then “known or unknown”, in exchange for the refund L sought and received. L’s attorney was taken aback when he saw the motion, as he had not been aware of that document due to his client having not told him about it and his not having obtained Dr. T’s full set of records before filing suit. In response to the motion, he argued that L could not have been aware, at the time she signed the release, that she would develop osteonecrosis and the nerve injury that arose from it and its eradication. The judge was unmoved by the argument put forth on behalf of L, ruling that L was an educated and savvy consumer, who had received the very benefit of the bargain she sought, namely a refund, in exchange for voluntarily releasing Dr. T against “all liability and damages, known or unknown”. The case was dismissed.
Refunds given to patients by their dentists are commonplace, and a realistic argument can be made that the good will exhibited by dentists in doing so greatly helps to ward off potential dental malpractice actions and Board complaints. But as common as refunding money is, obtaining a release in exchange is far less frequent. This case study demonstrates the value that a well-drafted release can provide, if not in every circumstance – because different judges often view such situations differently – then often enough to make the practice very worthwhile.
Dr. T understood the value that advice offered and protections provided by his malpractice carrier would confer, and he properly sought its involvement. While policy provisions might differ, dental malpractice carriers can often provide helpful advice and/or legal representation, even before a suit is filed, that is, at times, able to prevent such a suit or effectively address it at its very early stages, thereby mitigating costs, stress, and time lost from treating patients while litigation plays out. If Dr. T had, instead of working through his carrier and its assigned attorney, drafted the release document on his own, and it did not include the necessary language to serve as the legal basis for dismissal of the case, it might very well have been allowed to proceed and to potentially garner monetary compensation for serious physical damages.
Because of the dismissal of this case on procedural grounds, before litigation into the substantive issues began, Dr. T’s consideration and management of his patient’s bisphosphonate use was never explored, as it most certainly would have if the case were permitted to proceed and be decided on its merits. In our ever-aging society, the number of patients taking bisphosphonates continues to increase, so familiarity with its potential effects in a dental setting is critical. The same concept applies to a host of medical conditions and the medications employed to manage them. Dentists cannot reasonably be expected to be fully knowledgeable about every medical disorder, every medication, and every possible medical relationship to dental care; but what is expected, and what the standard of care generally dictates, is that dentists make appropriate and timely referrals to medical providers for obtaining clearance, or at least contact a patient’s physicians, to assure that their patients are best protected and that they best manage risk in their practices.
Finally, we touch upon a foundation for an informed consent process, during which a patient is to be made aware of the benefits of, foreseeable risks associated with, and viable alternatives to a planned invasive procedure, prior to allowing it to go forward. An implied predicate is the dentist’s awareness of all of those elements of the process which, significant here, is an understanding of how a bisphosphonate drug might affect the surgery to be undertaken. Had this case proceeded, it would have been a defense challenge to demonstrate that Dr. T was aware of the bisphosphonate-related risks, solely based upon his inactions in that regard, i.e., no medical clearance or communication with L’s physicians, and therefore educated L about those risks, so as to have been able to factor them into her decision-making process. Recall that, even when a procedure is performed according the standard of care, when damages result without the patient having been fully informed before consent is given, the dentist is liable for those damages. So, a dentist’s own education is critical to the patient’s education.
Note that this case presentation includes circumstances from several different closed cases, in order to demonstrate certain legal and risk management principles, and that identifying facts and personal characteristics were modified to protect identities. The content within is not the original work of MedPro Group but has been published with consent of the author. Nothing contained in this article should be construed as legal, medical, or dental advice. Because the facts applicable to your situation may vary, or the laws applicable in your jurisdiction may differ, please contact your personal or business attorney or other professional advisors if you have any questions related to your legal or medical obligations or rights, state or federal laws, contract interpretation, or other legal questions.
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