Average malpractice insurance payout for diagnostic errors in physician offices: $661,000

Of the 1,442 office-based malpractice claims included, about 38% involved an allegation of a missed, wrong or delayed diagnosis, Coverys reported. Across all healthcare settings, surgery/procedures were the No. 1 case type, at about 31% of all events, followed by diagnosis-related errors at 27% and medical treatment (15%). 

Diagnostic errors occur most frequently in office-based settings, accounting for 34% of such occurrences, followed by emergency departments/urgent care clinics (29%), and patient care units (21%). About one-third of office-based diagnostic error occurrences resulted in a patient death, and 22% resulted in a patient suffering a high-severity injury. Together, these two instances accounted for about 72% of indemnities paid, the report found. 

Coverys shared several examples of instances that led to malpractice claims: 

• A patient presented with right breast inflammation, and the provider recommended an ultrasound, which was declined. There was no recommendation for a follow-up visit for reevaluation, with the delay resulting in the woman’s death from breast cancer.
• An incidental finding of a lung mass on a chest X-ray was not conveyed to the patient or the primary care provider No follow-up occurred, and the patient was later diagnosed with stage 3B lung cancer. 
• Failure to further investigate abnormal chest X-ray findings in a long-term smoker with hemoptysis resulted in an 18-month delay in diagnosing lung cancer. This, despite a radiologist recommending a CT scan, with imaging neither ordered nor discussed during multiple subsequent visits. 
• Failure to act on a radiologist’s recommendations for a possible mediastinal mass led to a 13-month delay in diagnosing lung cancer. Though the primary care physician acknowledged the original X-ray report, the doctor never ordered follow-up imaging until symptoms worsened and cancer was confirmed. 
• Failure to follow up on an incidental MRI finding led to delayed care and a patient’s eventual kidney removal. The ordering rheumatologist did not act on the recommended endocrinology consult despite continued care. 

In about 30% of diagnosis-related, office-based malpractice events, it’s alleged that the clinical team failed to order an appropriate test or specialty referral. 

Coverys also shared average payout amounts and stats for the top missed cancer diagnoses. About 40 prostate cancer events were closed between 2020 to 2024, with 73% resulting in a payment at an average of $749,000. That’s compared to 32 lung cancer events, with 59% closing with a payment at an average of $555,000. And for breast cancer, there were 27 events, 44% of which resulted in a payout at an average of $698,000. 

Coverys recommend five key steps physician offices can take to avoid these mistakes. They include (1) raising awareness about the prevalence of diagnostic errors and their causes; (2) “know your data” and set measurable goals for improvement; (3) develop champions to lead change; (4) evaluate and monitor to help sustain success; and (5) continuously adapt your practices to address “emerging exposures.” 

You can find the full report for free here.