Medical Malpractice Structured Settlements

Most doctors are well-educated and experienced; however, it is possible for doctors to unintentionally cause harm to their patients. When a patient becomes injured or dies after a doctor treats them, they or their surviving family members can sue and receive a structured settlement for medical malpractice depending on the circumstances.

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  • Written By
    Christian Simmons, CEPF

    Christian Simmons, CEPF

    Financial Writer, Certified Educator in Personal Finance

    Christian Simmons is a financial writer who has worked professionally as a journalist since 2016. As an active member of the Association for Financial Counseling & Planning (AFCPE), Christian prides himself on his ability to break down complex financial topics in ways that readers can easily understand.

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    Lamia Chowdhury

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    Thomas J. Brock, CFA®, CPA

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  • Updated: November 17, 2023
  • 7 min read time
  • This page features 6 Cited Research Articles

Key Takeaways

  • A medical malpractice structured settlement is a payout that is received by a plaintiff if they file a successful medical malpractice claim.
  • Medical malpractice includes things such as surgical errors, unnecessary surgical procedures or prescribing the wrong medication that results in injury and damage to the patient.
  • Depending on the situation, a settlement can be paid out as either a lump sum or as a structured settlement.

What Is a Medical Malpractice Structured Settlement?

Structured settlements are often distributed to plaintiffs as compensation for personal injury lawsuits, including medical malpractice claims.

A structured settlement is a financial tool that distributes payments from a large sum of money to an individual over time. This steady, reliable income stream can help to secure your financial future, especially if the medical malpractice resulted in ongoing medical care or loss of wages due to an inability to work.

A medical negligence claim involves professional health care negligence that ultimately causes a patient harm or an untimely death. Negligence or professional omission can occur from flawed treatment, inaccurate diagnosis or error in aftercare.

Medical malpractice — or medical negligence — can also include:

  • Unnecessary surgical procedures.
  • Surgical errors.
  • Early discharge from a medical facility.
  • Little to no consideration of patient medical history.
  • Failure to identify symptoms.
  • Prescribing incorrect medication or improper dosage.
  • Misreading laboratory results.

Before filing a medical malpractice claim, you must be able to prove negligence occurred in your case and receive confirmation from a hired medical expert. 

Some cases are settled before a lawsuit is filed. For example, if you — also referred to as the plaintiff — and the accused doctor and their affiliated insurance company — legally referred to as the defendants — agree to the negotiation terms. If both parties do not reach a settlement agreement, you have the option to file a lawsuit that requires a judge to rule in favor of the case.

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Minors and Medical Malpractice

Most medical malpractice structured settlements span decades, possibly until or even after the plaintiff’s death. In the case of a minor, however, many medical malpractice structured settlements are set up to end when the child reaches the age of maturity (anywhere from 15 to 21 years old, depending on the state). 

In these cases, the structured settlement will distribute regular payments to the child’s guardian while they are a minor to pay for ongoing medical expenses, resulting in the final lump-sum payout when they reach the age of maturity.

A medical malpractice structured settlement is a way to capture a consistent reliable stream of payments associated with a successfully litigated lawsuit. The alternative is a lump sum payment, which isn’t ideal for everyone.

Filing a Medical Malpractice Claim

If you feel you have a qualifying medical negligence case, make sure you take the appropriate steps prior to filing a claim. Skipping steps can ultimately affect your right to repayment.

Did You Know

Eight of 10 medical malpractice cases go to trial. 

Source: National Library of Medicine

There are three key steps to take before filing your claim. 

Talk to Your Doctor
Prior to filing a medical negligence claim, take the time to discuss with the physician who treated you what may or may not have gone wrong. If the doctor made a mistake, see if they can right the wrong before deciding to pursue legal action.
Find a Lawyer
Though there are some legal cases you may be able to handle alone, a medical malpractice suit is not one of them. Lawyers have experience and can provide the best guidance in your next steps to filing a claim. They can handle your negotiations and help to ensure you are compensated for your discomfort and losses. Take your time in finding the best legal counsel to represent you.
Know the Statute of Limitations
Medical malpractice claims have a time limit as to when they can be filed from the time of injury. If filed too late, you risk forfeiting your right to any compensation for your injuries. Be sure to check your state’s statute of limitations, so your case remains timely.

Ensuring that you have all the information that you need and are fully prepared before filing your medical malpractice claim can help increase the chances of you receiving the outcome that you are looking for.

It also may help you to better understand whether you do have a legitimate case to make.

Read More: Medical Malpractice Lawsuit Funding

Burden of Proof

The law defines medical malpractice and certain prerequisites needed for a judge to hear a case. One factor to be aware of in your claim is the burden of proof.

In order to prove that negligence occurred, you must be able to prove several different key things.

Existence of a Doctor-Patient Relationship
You must be able to prove there was a sufficient doctor-patient relationship, meaning a doctor treated you directly. If you hired a doctor and they agreed to act as your designated physician, the relationship is valid. Simply seeking a doctor’s opinion via consultation does not qualify as a doctor-patient relationship because a doctor cannot leave you with adequate treatment options during a consultation.
The Doctor Was Negligent
Doctors must also be found negligent in prescribing treatment or providing a diagnosis. To qualify as medical malpractice, you must prove your doctor caused you harm in a situation where a competent doctor would not. It is not enough to prove a health care provider breached the standard of care or their duty to inform patients of a conflict of interest or material risks. The standard of care varies by condition, but generally means care any doctor with similar training at a health care facility in a similar community would have provided.
The Doctor’s Negligence Caused Injury
You must connect the doctor’s action or inaction to your injury. It is not uncommon for legal officials to seek confirmation from a medical expert. If a patient was injured or sick prior to interaction with a doctor, it can be more difficult to prove the doctor did more harm.
The Injury Resulted in Damages
Lastly, you must be able to show the damage costs are significant. Malpractice suits can be expensive. If a patient can show no mental, emotional or financial harm, the malpractice claim may not be winnable.

Receiving a Medical Malpractice Settlement

Though some medical malpractice claims can be settled before filing a lawsuit, many bigger cases require a formal trial after filing a claim. Settling a medical malpractice claim can take months or years after filing the lawsuit due to an extensive approval process. 

Filing a suit does not guarantee a malpractice settlement, and the process can cause significant financial strain. Be sure to consult with a legal advisor prior to continuing with your claim in order to ensure the benefits outweigh the risks.


Negotiating your settlement is a crucial part of a medical negligence case. As with any settlement, the dollar amount that the defendant and plaintiff negotiate is meant to represent the amount of damages the plaintiff endured.

While calculating financial damages and expenditures can be simple, negotiating a fair amount to cover intangible damages — including pain and suffering, emotional strain, etc. — can be more difficult. 

In addition, there are state laws limiting the amount of money you may be able to receive. Once a fair settlement has been reached, you will be one step closer to receiving structured settlement payments.

Receiving Doctor’s Approval

In order to receive a settlement outside of court, the doctor or defendant must agree to the negotiation terms.

Pro Tip

Unlike most personal injury cases, a medical malpractice settlement requires the final approval of the doctor being sued. 

If a doctor chooses not to settle, they may take their chances in court to not risk paying inflated insurance costs or jeopardizing their career. Battling a medical negligence case in court can take months and may sometimes discourage a plaintiff from pursuing the case. Be sure to keep this in mind prior to filing a claim.

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Payout Options

The medical malpractice settlement negotiations can result in the plaintiff receiving a settlement in a lump sum, a structured settlement or a combination of the two. With a lump sum, the plaintiff receives a full payout, which can be helpful when paying legal and medical bills up front. It is a common and simple option in many medical negligence cases.

However, receiving a structured settlement may be more beneficial in handling long-term medical and financial debt. Structured settlements ensure payment is distributed consistently over the course of years.

In some cases, plaintiffs have no choice but to receive a structured settlement because insurance companies that finance the settlement prefer structured settlements for malpractice suits.

Frequently Asked Questions

What is a medical malpractice settlement?

A medical malpractice settlement is the resulting settlement from when a doctor causes harm to a patient in some way. The settlement is meant to account for the damages caused to the patient by the malpractice.

How do I win a medical malpractice case?

There are many steps that go into filing a successful medical malpractice claim, and one of the biggest involves the burden of proof. You must be able to prove that the doctor was negligent, their negligence caused injuries and that those injuries resulted in damages.

How is a medical malpractice settlement paid out?

Medical malpractice settlements can be paid out in a couple different ways. You may receive a lump sum payment, or you may receive a structured settlement, which pays out gradually over a period of time.

Please seek the advice of a qualified professional before making financial decisions.
Last Modified: November 17, 2023