Refunding Fees: An Admission of Liability?

Case history

Her post-operative course was uneventful but at a six month review, the patient expresses dissatisfaction with the cosmetic outcome, complaining that her breasts are asymmetrical. The patient requests a refund of the fees she paid for the procedure as she plans to have corrective surgery performed by another surgeon  and further costs will be incurred.

Medico-legal issues

Members should contact MDA National for advice as soon as possible if faced with a patient who is requesting a refund of fees. If the request is made by a patient during a consultation, it may be appropriate to either ask the patient to put their request in writing to you, or to advise them that you need to seek advice before providing any response to their request. If you receive a written request for a refund of fees, this should immediately be forwarded to MDA National.

Should I agree to the patient’s request to refund the costs of their treatment?

There is no “correct” way of managing this situation and each case needs to be considered on its own merits. The request for a refund from the patient may be made when:

• there has been an error associated with an adverse outcome e.g. wrong site surgery
• there has been a complication of treatment and an adverse outcome but not necessarily negligence  e.g. keloid scar following a skin cancer excision
• the patient is dissatisfied with the outcome of treatment but has not experienced any complication or adverse outcome e.g. dissatisfaction with the outcome of a cosmetic procedure when objective review reveals a satisfactory outcome.

In general terms, the advice given by MDA National in each of these three situations will differ:

There has been an error and negligence

You should send an incident report to MDA National as soon as possible. After you have discussed the case with the Claims Manager at MDA National, it is appropriate for either you or MDA National to refund the costs of treatment. Ideally, this should be done on the basis of a Deed of Release, although in some circumstances it may not be possible to complete a Deed; e.g. if the patient’s condition has not stabilised. These matters will generally be dealt with by MDA National on your behalf as a ‘Claim’ under your Professional Indemnity Insurance Policy.

There has been a complication of treatment and an adverse outcome but not necessarily negligence

 Again, an incident report should be sent to MDA National. In these cases, following your discussion with the Claims Manager, a decision will be made as to whether or not to agree to the patient’s request for a refund. If the patient’s medical condition is stable, it may be appropriate for the refund to be provided to the patient on the basis of a Deed of Release.

The patient is dissatisfied with the outcome of treatment but has not experienced any complication or adverse outcome

 MDA National strongly recommends that if a refund is considered in this situation it should only be made on the basis of a Deed of Release and advice should be sought from MDA National.

If a Deed of Release is required, MDA National will prepare the document for you. It is essential when forwarding a Deed of Release to a patient that the covering letter advises the patient that they should seek independent legal advice before signing the Deed. Most Australian states provide review of ‘unjust’ contracts and an essential consideration when reviewing the enforceability of a contract (Deed) is any inequality in bargaining power between the parties to the contract. Ensuring that the patient is advised to seek independent legal advice will mitigate the possibility of the patient successfully challenging the Deed of Release.

Is it an admission of liability to refund fees?

No, refunding fees per se is not an admission of liability, but care needs to be taken in this situation, and expressions to use may include:

“As a gesture of goodwill, I am refunding my fees for the procedure.”

“I regret that my treatment has not met your expectations and so I have agreed to refund my fees for your procedure, but please note that this offer should not be construed as an admission of any liability on my part.”