How medical liability reforms will be advanced, challenged in 2016

Troy Parks
Staff Writer
AMA Wire
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The existing medical liability system continues to drain health care resources that could be devoted instead to improved quality of care and access for patients—all while putting many physicians at unnecessary emotional, reputational and financial risk. Thankfully, positive medical liability reform efforts will continue this year to address both existing and developing issues.

The AMA is pursuing legislative solutions at both the federal and state levels to address these issues and is continuing collaboration with state medical associations and national medical specialty societies to advocate for its new medical liability reform legislation and defend existing reforms.

Implementing new ideas and protecting existing strengths

Three states recently passed new bills to create early disclosure systems that expedite the resolution of meritorious claims, provide more consistent damage awards and reduce the practice of defensive medicine.

In 2015, Iowa put their “Candor” law into action. The act facilitates communication between a physician or health facility and a patient following an adverse health care incident, with the understanding that disclosing adverse medical outcomes to patients can prevent the unnecessary expenditure of resources and be an effective form of risk management. Massachusetts and Oregon passed similar legislation in 2012 and 2013, respectively.

Several other states will look to Iowa, Massachusetts and Oregon as they design their own systems to engage in early discussion with patients following adverse health care incidents to prevent the unnecessary escalation of such claims.

States will also work to establish and protect existing traditional medical liability reforms in 2016. As of January, about one-half of states have enacted some variation of a cap on noneconomic damages, while six states place a cap on total damages. However, the caps in these states vary greatly by amount, exceptions and causes of action covered.

Last year, Missouri’s governor signed a bill that created two caps on noneconomic damages, a primary limit of $400,000 and a higher cap of $700,000 for catastrophic personal injury or death. Both are subject to an annual 1.7 percent index for inflation. The state’s previous $350,000 cap was struck down in 2012.

Despite many legal challenges, one of the nation’s leading medical liability reform laws was upheld again in November 2014. California’s historic tort reform law, the Medical Injury Compensation Reform Act, will remain in place with a $250,000 cap on noneconomic damages in medical liability lawsuits.

A new threat to medical liability reform

Movements are underway in several states to adopt a patient compensation system for medical liability—a “no-fault” system similar in concept to the worker’s compensation system, in which patients would be compensated automatically for an adverse medical event, even if it was not the fault of the physician. Advocates of this model have made numerous claims about its advantages, according to the Physician Insurers Association of America (PIAA). “While the current system has flaws and is in need of reform, no-fault is not the answer,” the PIAA said in a statement.

“Patient compensation systems would result in more doctors being reported more often to the National Practitioner Data Bank,” said Michael C. Stinson, vice president of government relations and public policy at the PIAA. Approximately 70 percent of all medical liability claims filed are found to be meritless and result in no payment, he added.

“With the [patient compensation] system being based on adverse medical outcomes, and not on the fault of a health care professional, the number of claims being paid would skyrocket,” Stinson said. “And every one of those would get reported, wildly misrepresenting the health care professional’s record of practice.”

Tennessee, Florida, Georgia and Maine are both expecting patient compensation systems legislation this year. The AMA is currently studying these proposals and will issue a report to the House of Delagates at the 2016 Interim Meeting.

Federal efforts to achieve national medical liability reform

Significant medical liability reform was achieved with enactment of the Medicare Access and CHIP Reauthorization Act of 2015 in April. The law includes the Standard of Care Protection Act, which prohibits federal quality program standards and performance metrics from establishing a “standard of care” in medical liability actions.

The AMA will advocate this year for the Sports Medicine Licensure Clarity Act. This legislation would protect sport medicine professionals, including physicians, when they travel with their teams or athletes and provide care in another state by ensuring they are covered by their liability insurance across state lines.

Another bill coming down the line is the Good Samaritan Health Professionals Act. Under this bill’s protections, health care professionals who volunteer during a federally declared disaster would be protected from liability exposure. Another bill, the Family Health Care Accessibility Act legislation, would provide Federal Tort Claims Act medical liability coverage to all qualified health care professionals who volunteer at community health centers, or through offsite programs or events carried out by such centers. Under the bill, these volunteers would be deemed covered employees of the Public Health Service for liability purposes.

The Help Efficient, Accessible, Low-Cost, Timely Healthcare (HEALTH) Act, is a comprehensive liability reform package that includes a federal cap on non-economic damage awards if a state does not have its own cap. Assisting members of the U.S. Senate and House of Representatives who are considering revisions to the HEALTH Act will continue to be a focus for the AMA this year.

Standing up for reform in that nation’s courts

Physicians also are firmly supporting medical liability reforms in the midst of various legal challenges.

For instance, a case before the Supreme Court of the State of New Mexico calls into question whether Texas’ medical liability reforms should apply when New Mexicans seek care from physicians practicing in their neighbor state. A New Mexico Court of Appeals previously ruled in favor of holding Texas physicians to New Mexico law, which offers fewer protections for both physicians and patients. Many New Mexicans could lose the vital access to medical care provided by Texas physicians on which they rely.

The Litigation Center of the AMA and State Medical Societies filed an amicus brief in support of reversing the appeals court’s decision. The case puts “Texas doctors, nurses and hospitals seeing New Mexico patients at an even greater litigation risk,” the brief said. Increased litigation risk brings with it an increase in the frequency of lawsuit filings and an increase in the size of awards and settlements.

Other ongoing medical liability legal challenges in which the AMA Litigation Center has been involved include:

  • Volk v. DeMeerleer, a medical liability case before the Washington Supreme Court that also threatens physician-patient confidentiality
  • Bayer v. Dobbins, a case before a Wisconsin court of appeals that calls into question the admissibility of expert evidence
  • Seifert v. Balink, a case on appeal to the Wisconsin Supreme Court weighs the standards of admissibility for expert testimony

The 2016 edition of “Medical Liability Reform–Now!” (log in) provides liability reform advocates with the information they need to advance and defend medical liability reform legislation. It includes background information, proven solutions and innovative reforms that could complement traditional medical liability provisions.

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