OBJECTIVES: This study empirically investigates “medical litigations” against physicians to assess its impact on hospital inpatient costs registered to physicians facing medical litigations and the spillover effects on other physician colleagues. METHODS: We employ generalized linear models to estimate the impact of the medical litigation against an individual physician on hospital inpatient costs. We also estimate the spillover effects of the medical litigation against an individual physician on the costs of hospital inpatient stays registered to other physicians with no medical litigation history practicing within the same hospitals for each of the following board certified physician specialty groups: Cardiologists, general practitioners, neurologists, obstetricians and/or gynecologists, pediatricians, psychologists, surgeons, and urologists. We use the Healthcare Cost and Utilization Project (HCUP) State Inpatient Databases (SID), the American Hospital Association Annual Survey Database, and the Area Resource File in this analysis. Our hospital data for 2008 are drawn from Florida, and physician information was obtained from the state’s medical board where we use physicians’ license numbers to register each hospital inpatient visit to a physician. Over 1.7 million inpatient records are used in the analysis. RESULTS: Our risk-adjusted results show that medical litigation against physicians increase the average cost of inpatient hospital visits about 11%. We find that hospital inpatient costs registered to surgeons with no medical litigation history is higher (about 28%) at hospitals where there is at least one surgeon facing medical litigations when compared to the hospitals where there is no surgeon associated with medical litigation history. The magnitude of spillover effects are in between 2 percent and 28% for other physician specialties except for obstetricians and/or gynecologists for whom we found no spillover effects. CONCLUSIONS: Medical litigation against physicians increases the hospital inpatient costs. There is significant variation in spillover effects of medical litigations across major board certified physician groups.