files a malprac
Problem 2 - Consistent with GAAP, indicate the amount, if any, a hospital should establish as a
liability for each of the flowing independent malpractice claims;
- Mr. Joe Smith, a heart patient, files a malpractice lawsuit for $600,000. Based on Mr. Smith’s medical
records, the hospital’s attorneys are not confident of winning the case and estimate the judgement
will range from $350,000 to $400,000. The hospital does not carry medical malpractice insurance.
- Mrs. Jane Jones has filed a medical malpractice claim of $750,000. The hospital’s attorneys are 95%
confident the hospital will win the case if it goes to trial. The hospital does not carry medical
malpractice insurance.
- A hospital is being sued for medical malpractice and the hospital’s attorneys believe it is probable
the hospital will lose the case and estimate the potential loss to be $700,000 and legal and court
costs to be $40,000. The hospital carries a $750,000 medical malpractice insurance policy with a
$80,000 deductible.
- A hospital is being sued for medical malpractice and the hospital’s attorneys believe it is probable
the hospital will lose the case and estimate the potential loss to be $500,000 and legal and court
costs to be $30,000. The hospital carries a $600,000 medical malpractice insurance policy with no
deductible.
- A hospital is being sued for medical malpractice and the hospital’s attorneys believe it is probable
the hospital will lose the case and estimate the potential loss to be $90,000 and legal and court costs
to be $20,000. The hospital carries a $100,000 medical malpractice insurance policy with no
deductible.
- A hospital is being sued for medical malpractice and the hospital’s attorneys believe it is probable
the hospital will lose the case and estimate the potential to be $900,000 and legal and court costs
to be $50,000. The hospital carries an $800,000 medical malpractice insurance policy with a $30,000
deductible
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