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​Case Study: Failure to maintain appropriate boundaries leads to malpractice lawsuit and licensing board complaint

Counselors and Medical Malpractice

Case Study with Risk Management Strategies

Presented by HPSO and CNA








Total incurred for professional liability claim: $178,000

Total cost to defend license: greater than $13,000

(Monetary amounts represent only the payments made on behalf of the counselor.)

Summary

This case stu​dy involves an insured counselor who was a marriage and family counselor with over 25 years of experience, and who was working in a mental health treatment setting. 
The insured began counseling two minor children who began “acting out” following the death of their father. The initial client intake forms were completed by their mother and only listed the children as the clients. The children were seen together and separately for three years, but the mother was always present. On a few occasions, if the children were having problems at school the counselor would schedule an appointment with only the mother. 
At some point the mother and counselor entered into a business relationship. The counselor never considered the mother a client and therefore didn’t believe there would be a conflict with entering into a business relationship with her.

Over several months, the business relationship soured between the mother and the counselor. The mother believed the counselor owed her money and made several attempts to collect. The counselor refused to pay the mother for a variety of reasons.

Once the business relationship between the counselor and the mother became strained, the counselor refused to allow the mother to attend or participate in the children’s therapy sessions. The mother filed a professional malpractice lawsuit and state professional licensing board complaint against the insured counselor for abandonment and extending counseling boundaries.

Allegations against the insured included:
  • Abandonment and client neglect;
  • Failure to obtain client’s consent for the change from family to individual counseling;
  • Failure to maintain professional standards;
  • Entering into a nonprofessional relationship with a client; 

Risk Management Concerns

The licensing board requested the insured’s client healthcare records on the children, billing records, and her personal mobile phone records. As part of the investigation, the licensing board also conducted interviews with the mother and the counselor’s staff.
The board felt that the healthcare records on the children were incomplete, insufficient, and failed to meet professional documentation standards. After reviewing the healthcare and billing records, and interviewing the mother and the counselor’s staff, the board concluded that the mother was a client. The board asserted that the role of the mother-counselor changed from an evaluative role to a therapeutic role shortly after the counselor began working with the minor children. The board decided that the counselor provided treatment to the children and mother and failed to safeguard the integrity of the counselor–client relationship. 

The counselor entered into a consent agreement to complete 80 hours of ethics continuing education and be supervised by a board approved marriage and family counselor for two years. 

With the board’s findings against the insured, it was determined that the likelihood of a defense verdict in favor of our insured in the professional malpractice lawsuit would be less than 10 percent. Therefore, the decision was made to pursue mediation in the professional malpractice lawsuit on behalf of the insured counselor in the hopes of settling the case before trial. 

Resolution

Mediation resulted in a settlement of the claim. Total incurred for the professional liability claim, including the settlement and defense expenses, was approximately $178,000.
Cost to defend the counselor related to the board complaint was greater than $13,000. This amount does not include the out of pocket costs the counselor incurred related to the required CE and supervision.

Risk Management Recommendations

  • In situations of couples and family counseling, counselors, clearly define who is considered “the client” and discuss expectations and limitations of confidentiality.
  • In the absence of a treatment agreement during couple or family therapy, consider all individuals involved to be the client.
  • Periodically review treatment agreements with care plans to determine if the counselor-client has changed and if so, update all documents as needed. 
  • Remember that the counselor is solely responsible for maintaining appropriate boundaries in the counseling relationship, and that client consent for sexual, business, personal and/or social relationships does not exempt the counselor from this professional duty.
  • As noted in the ACA Code of Ethics​, Section A.6.d., when there has been a role change in the professional relationship, obtain informed consent from the client and explain their rights to refuse services related to the change. Clients must be fully informed of any anticipated consequences (e.g., financial, legal, personal therapeutic of counselor role changes). 
  • Provide accurate, complete and current documentation, in order to enhance continuity of client treatment by another authorized counselor or healthcare provider. Documentation should support the treatment plan and satisfy third-party billing requirements.  A complete and accurate clinical record presents the strongest defense against legal and licensing actions.
  • Maintain appropriate boundaries with clients and know and comply with the ACA Code of Ethics. In addition, follow state-specific laws and regulations related to professional conduct, applicable ethics codes of state and/or local professional organizations, as well as requirements of relevant licensure/certification/disciplinary boards.
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