Group Supports Administrative Compensation System in Tennessee

Patients for Fair Compensation Continues Push for Administrative Solution to Medical Malpractice Claims in Tennessee
Patients for Fair Compensation is making another push to change the way medical professional liability claims are adjudicated against physicians in Tennessee. The state’s medical association, trial bar and largest insurer of physician liability are saying, no way.

Founded in 2011 as a Section 501(c)(4) organization by Richard Jackson, chief executive of the healthcare staffing firm Jackson Healthcare, Patients for Fair Compensation advocates moving the determination of medical liability claims from the judicial method to a no-blame, administrative compensation system overseen by a Patient Compensation Board. The board would operate similar to the way workers’ compensation claims are handled, reviewing claims of medical liability and awarding settlements. All claims would be settled in a matter of months, rather than years.

According to Patients for Fair Compensation, eliminating the litigation process against physicians in favor of a Patient Compensation Board for the determination of medical liability compensation would lower healthcare costs by eliminating the incentive for physicians to practice defensive medicine. In addition to eliminating unnecessary medical tests and procedures, it would put patients at the forefront of the process and realign incentives towards patient safety and a reduction in medical errors, while assuring all patient complaints are heard, quickly resolved and more patients are fairly compensated.

This is not the first time Patients for Fair Compensation has campaigned for its Patient Compensation System before the Tennessee Legislature, nor is it the first state where it has lobbied for such legislation. In the past, it has advocated for its administrative liability compensation system in Florida, Georgia, Maine and Montana to no avail. The legislation never escaped committee in Florida, Georgia and Montana; it was voted down in Maine.

“We stand with the Tennessee Medical Association in opposition to the Patients for Fair Compensation legislation,” said Sherie Edwards, vice president of corporate and legal at State Volunteer Mutual Insurance Co. (SVMIC), Tennessee’s largest provider of physician medical liability insurance. “If we thought the system was good for our physicians, we would be supportive of it. Our mission is to protect, support and advocate for our physicians, and this is not a good system for them.”

United in Opposition
When Patients for Fair Compensation eyed Georgia as the first state to try to enact its Patient Compensation System in 2013 under the banner Senate Bill 141, the Medical Association of Georgia, State Bar of Georgia and medical liability insurer MagMutual Insurance Co. banded together in opposition, favoring the existing medical liability tort reforms that were passed in 2005.

“Since the 2005 tort reforms, we have hard statistics that show claims frequency is down, malpractice payments are down, medical malpractice insurance premiums are down and competition is up,” said Joseph Cregan, MagMutual senior vice president and general counsel told Medical Liability Monitor in December 2013. “We’ve analyzed [Georgia] SB 141 in detail, and the No. 1 thing that should be noted is that the system it proposes has never been tried in any other state. There is no track record; no observable data to know what it would do. The other side claims — and has pointed out — statistics and measurements, but when you cut through all those, they’re just speculative.”

Last year, the American Medical Association officially commented on the “no-fault” system for compensating patients who experience adverse medical outcomes, calling the system “a new threat to medical liability reform” under which the number of medical liability claims paid would skyrocket.

SVMIC points to the fact that if the system is only enacted in Tennessee, the state’s physician population could expect increased claims and increased reports to the National Practitioner Data Bank, while healthcare professionals in neighboring states would continue to enjoy the national trend where claim frequency and claim costs continue to diminish.

“How many physicians are going to want to stay in a state where they face increased reporting to the Data Bank, when they could go right over the border to Kentucky or Alabama or Arkansas, Georgia, North Carolina or South Carolina and avoid that?” Edwards asked. “We believe that would cause a real access to healthcare problem for consumers in Tennessee. The way the proposed legislation was worded last year, a panel of physicians would look at the care rendered before deciding whether or not it met a national standard of care, which we don’t have in Tennessee. We have a local standard of care, so then our physicians would also lose the right to defend their care in a trial by jury. Nobody wins under this proposed system, which is why we are opposed to it.”

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