Tag Archives: Affordable Care Act

PIAA 2017: Current Trends & Future Concerns

Amidst Healthcare Uncertainty, PIAA 2017 Medical Liability Conference Focused on Current Challenges, Future Concerns

Hosted at the Broadmoor Hotel in Colorado Springs, Colo., with the backdrop of a Republican plan to repeal and replace the Affordable Care Act stalled between the U.S. House and Senate, the 2017 PIAA Medical Liability Conference convened from May 17 – 19 to examine the many challenges currently facing the medical professional liability insurance industry.

“This is a time of significant uncertainty for PIAA, the medical profession and the professional liability community,” acknowledged Richard Anderson, MD, PIAA chair as well as chairman and chief executive of The Doctors Company, during the opening remarks to the conference. “The evolution in healthcare delivery is transforming healthcare financing, organization and regulation, while challenging traditional definitions of good medicine. … The consolidation of healthcare delivery is well into its second decade and will be only marginally affected by national politics. Eighteen-percent of the American economy is in play. This is a non-partisan process that is unlikely to be interrupted. PIAA is working to move the process of ‘repeal and replace’ toward reasonable solutions, if this is possible in Washington today.”

Following are some of the highlights from the educational sessions at this year’s Medical Liability Conference.

Healthcare in the Digital Age
Keynote speaker Robert M. Wachter, MD, professor and chair of the Department of Medicine at the University of California, San Francisco, launched the two-day Medical Liability Conference with a session titled, 21st Century Medicine: IT, New Practice Methods and More.

Wachter started by acknowledging, “the angst of the modern physician is the challenge to “deliver high-quality, safer, satisfying and more affordable care.”

The answer to that challenge is clearly tech-enabled, but the medical industry remains in its infancy stage regarding information technology. Wachter illustrated this point by citing statistics from the Office of the National Coordinator for Health IT that show only 9.4 percent of hospitals employed electronic health record technology in 2008, but that number jumped to 83.8 percent by 2015.

Drawing upon his professional experience and real-life case examples to explore some of the unforeseen consequences in healthcare’s adoption of data information technology, Wachter noted how the clerical burden of electronic health records has pushed physician burnout rates above 50 percent (up 9 percent in the last three years); how the intensive care unit at his hospital has an average of 2,558,760 audible alerts per month, which has created staff alert fatigue; and how digitization has threatened the doctor-nurse collaboration as well as the doctor-patient relationship.

Later that day — and in the wake of the previous week’s massive “Wanna Cry” ransomware attack that paralyzed many hospitals and physician offices in the United Kingdom — a chilling session titled The Data Privacy & Security Landscape: Today’s Threats & Risk Mitigation explored the many ways digital criminals are targeting the healthcare sector.

Panelist Gamelah Palagonia, Willis Towers Watson senior vice president, walked attendees through the increasing complexity and endless array of developing threats such as Ransomware, Distributed Denial of Service (DDoS) attacks and vulnerabilities associated with the “Internet of Things” (IoT) that has propelled the cyber risk landscape into uncharted territory.

“Healthcare is the most vulnerable industry in America,” Palagonia said, noting that the healthcare sector accounted for 22 percent of all hacking incidents by industry. The good news, she said, is that proper employee training can mitigate two-thirds of all cyber risks facing healthcare.

Emerging Trends
In a session titled Storm on the Horizon: Determining the Next Claims Hurricane, moderator Sarah Pacini, JD, chief executive of the Cooperative of American Physicians, led panelists through emerging trends in handling medical professional liability claims.

Panelist Matthew Nielsen, Esq., vice president of claims for OMS National Security Co. RRG, brought attendees’ attention to the relatively growing trend where medical liability plaintiff attorneys invest in litigation cost insurance, which covers expert fees, deposition transcripts, travel, trial exhibits, mediator expenses, copies, etc., in the event that the plaintiff loses at trial. Such coverage is currently available in 16 states. Nielsen opined that this insurance product carries the potential to spike the volume of medical liability claims filed, swell the number of cases that go to trial, increase indemnity and embolden plaintiff attorneys to spend more money on expert witnesses and the overall amount they are willing to spend on a medical malpractice trial.

Joel Hopkins, Esq., partner at Saul Ewing LLP, spent significant time exploring the inherent challenges presented by electronic health records and the discoverable metadata found in the technology’s audit trails. Not only does the available metadata raise issues of privilege and confidentiality, it can push an insurer’s loss adjustment expense into the five figures.

During the session Employment or Private Practice: Factors Influencing this Key Decision, moderator Mary Ursul, Coverys executive vice president, and panelists looked at the data indicating physician employment continues to increase as well as the factors leading to a doctor’s decision to remain in private or employed practice.

Panelists cited data from a 2015 Merritt Hawkins “Survey of Final-Year Medical Residents” that indicates 36 percent of today’s physicians finishing their residency or fellowship are open to a hospital-employed practice — up from just 3 percent in 2003. These young doctors most value free time, educational debt relief and a good income when determining how to practice. Panelists also noted medical liability as a “significant concern” to young physicians has dropped significantly since 2011.

During Leveraging Data to Change the Risk Mitigation Game, Rick Hammer, MD, senior vice president at SE Healthcare Quality Consulting, and James Saxton, Esq., chief executive at Saxton & Stump LLC, discussed how empowering doctors with their own data could serve as one of the foundational elements necessary for success. They noted that — when utilized in a very specific way — data could be a gateway to professional liability risk mitigation. To illustrate this point, the panelists looked at how the implementation of a data-driven obstetric patient safety program at the New York Weill Cornell Medical Center decreased its number of sentinel events from five in 2000 to none in 2008 and 2009; during the same period, the hospital’s obstetric department reduced its average annual compensation payments from $27,591,610 between 2003 and 2006 to $2,550,136 between 2008 and 2009.

The Financial State of MPLI
Diving deep into the financial health of the medical professional liability insurance industry, during the session MPL Insurance Industry Performance: What’s the Latest?, Chad Karls, principal and consulting actuary at Milliman Inc., examined the underlying drivers of the medical professional liability industry’s financial condition.

Karls began his presentation with the unsettling fact that the industry’s overall direct written premium decreased by 24 percent between 2006 and 2016. That number is an even bigger 32 percent when looking solely at the direct written premium from traditional physician liability insurance — as opposed to including hospitals, other facilities and other providers.

The most impressive news Karls shared was the extreme slide in claims frequency, which has fallen around 40 percent since 2001. “This is really big stuff,” he marveled. “It’s huge.” Karls later explained how the industry’s almost 40-percent drop (relative to 2000 – 2002 levels) in physician paid indemnity is “driven totally by the fall in claims frequency.”

While the decline in claims frequency and paid indemnity is a positive, Karls brought attention to “the fly in the ointment” — allocated loss adjustment expenses (ALAE) have ballooned by 6.3 percent between 2005 and 2015. Even more concerning, 38 percent of ALAE costs are spent on claims that are dropped, withdrawn or dismissed, and ALAE severity is outpacing indemnity severity. Obviously, defense costs are getting out of control.

Combined ratios inched above 100 percent for the first time since 2005, denoting an underwriting loss, but Karls noted medical professional liability insurers are buoyed by “incredibly strong balance sheets … the strongest balance sheets we’ve ever had.”


Are Federal Caps on Noneconomic Damages Possible Under a Republican Government?

Federally capping noneconomic damages in medical malpractice verdicts has been the Holy Grail of medical professional liability tort reforms since the first medical malpractice insurance crisis in the 1970s. During that period, states like California passed noneconomic (pain-and-suffering) damage caps as part of more comprehensive medical liability tort reform packages. These caps offered the medical malpractice insurance industry greater predictability in regard to jury verdicts, which brought greater stability to medical liability insurance premiums.

Since its enactment, the California Medical Injury Compensation Reform Act (MICRA) of 1975 has been the gold standard of medical liability tort reform legislation. At the heart of MICRA is a $250,000 noneconomic damage cap. More than two-thirds of states have followed California’s lead, enacting similar noneconomic damage caps, but many of those states have had their caps struck down due to the caps violating language in their state constitutions.

Attempts to enact federal noneconomic damage caps have proven fruitless because they face resistance from Democrats as well as the more-conservative members of the Republican Party. Democrats argue that noneconomic damage caps violate the right to have a jury decide actual damages in a civil court case; more-conservative Republicans argue that civil liability lawsuits are the purview of the states and to impose federal caps would violate the Tenth Amendment, which prohibits the federal government from interfering in how states run their civil justice system.

Some Republicans believe they have found a way to mollify the objections of the more-conservative members of their caucus to federal caps on noneconomic damages in medical liability lawsuits. On Feb. 24, Rep. Steve King introduced HR 1215: Protecting Access to Care Act of 2017, which would remove medical liability claims from state court when the injured party receives healthcare through a “federal program, subsidy, or tax benefit.” In other words, if a patient receives healthcare via Medicare, Medicaid, a veterans health plan or receives a premium subsidy from the Affordable Care Act (or whatever the Republicans replace the Affordable Care Act with) or has a tax deduction for healthcare of any kind, there is a federal interest in keeping the cost of care low. Because the federal government would have an interest under the Protecting Access to Care Act, it would be immune from Tenth Amendment concerns and able to impose a cap on noneconomic damages. The Protecting Access to Care Act of 2017 recently passed the Congressional Judiciary Committee, the first significant medical liability tort reform legislation to be approved by the Committee since 2011.

There are still many in Congress who are skeptical that federal-level noneconomic caps are achievable. Three weeks ago, I spoke on the record with Reps. Phil Roe and Andy Barr, who themselves have introduced a bill regarding medical liability tort reforms to this Congress (watch my interview with the Congressmen). Their legislation focuses on creating safe harbors from malpractice claims for those physicians who practice according to predetermined clinical practice guidelines.

“[Noneconomic damage caps] are a bridge too far,” Rep. Roe said. “You will never get caps passed. It’s just not possible. If we had put caps in this legislation, it would be dead. We’ve tried it in the past, and it goes nowhere.”

Part of the impossibility, according to the Congressmen, is that any medical liability legislation will have to proceed via “regular order,” which requires a 60-vote super majority to defeat a filibuster and pass the Senate.

“There are certain things we can and cannot do in the repeal-and-replace agenda via reconciliation; [medical malpractice] reforms need to move through regular order,” Barr said. “In order for us to have a chance to bring eight Democrats along, we have to be sensitive to some of the objections or concerns that have been raised in the past, and there is pretty uniform opposition to caps on noneconomic damages among Democrats.”

Are federal caps on noneconomic damages achievable in this Congress? Time will tell. Please revisit this blog as we will continue to cover everything medical liability as the Republican Party tries to enact their form of healthcare legislation.

The GOP Plan to Reduce Frivolous Medical Malpractice Lawsuits

Join us on the latest episode of Healthcare Matters as we speak with Representative Phil Roe (R-Tenn) and Representative Andy Barr (R-Ky) about the American Healthcare Reform Act of 2017 (HR 277), a bill they introduced to Congress in January. Their bill would repeal and replace the Affordable Care Act (ACA), President Obama’s signature healthcare law. Unlike the ACA, HR 277 includes provisions to help reform the medical liability system, including a “safe harbor” for physicians who follow clinical practice guidelines. The bill would also move certain types of medical liability cases from state courts to federal court.

Rep. Roe was a practicing OB-Gyn prior to being elected to Congress in 2009 from Tennessee’s 1st District. Rep. Andy Barr, elected in 2013 from Kentucky’s 6th District, is a former trial attorney. Both are members of the Republican Study Committee (RSC), where they worked with current Secretary of Health and Human Services Tom Price, who has also been a proponent of including medical liability reform in Republican efforts to replace the ACA.

Click below to view our full interview with Rep. Roe and Rep. Barr.


The ACA and Economic Damages in Medmal Verdicts

The Affordable Care Act’s Potential to Subrogate Future Care Portion of Economic Damages in Medical Liability Verdicts

By Michael Matray
Editor of the Medical Liability Monitor

While political partisans and healthcare pundits have been arguing over the constitutionality and/or practical effectiveness of the Patient Protection & Affordable Care Act since it was enacted six years ago, the medical professional liability insurance industry has been closely watching the U.S. court system as medical malpractice defendants have both successfully and unsuccessfully argued that provisions of the Affordable Care Act should impact a plaintiff’s ability to recover the cost of future medical expenses.

When a negative medical outcome occurs, the lion’s share of economic damage to a plaintiff is most often the costs pertaining to his or her future medical care. Depending on the age of the patient and the severity of the medical injury, the cost of future healthcare needs can easily stretch into the millions of dollars. Traditionally, it has been generally assumed that 100 percent of these medical expenses would be paid for out-of-pocket by the plaintiff. Life care plans – usually developed by a medical doctor and an economist for the plaintiff – have rarely, if ever, taken into consideration the benefits of the plaintiff’s health insurance that would abrogate many of the projected expenses. This is because – prior to the Affordable Care Act – healthcare insurance almost always carried preexisting condition exclusions as well as annual and lifetime expenditure limits.

Savvy medical liability defense attorneys have recognized that the Affordable Care Act has removed preexisting condition barrier and expenditure limits as well as requiring all Americans to obtain some basic level of healthcare insurance. If this is the case, they contend, why can’t the defense argue that future medical expenses will never be fully paid by the plaintiff out-of-pocket, and as such, the healthcare insurance they are required to carry should be considered as a collateral source of recovery and subrogate portions of the total cost of economic damages?

Rather than paying the total cost of the plaintiff’s life care plan, these defense attorneys argue, the defendant should only be required to pay for the premium costs of obtaining the plaintiff healthcare insurance as well as any associated co-pays and deductibles. This argument has had mixed results so far in the American court system.

In court decisions that have barred consideration of the Affordable Care Act’s potential to offset the itemized cost of a life care plan, the most common reasoning has been that the Affordable Care Act’s future is too unsettled. Judges have opined that with the heated politics surrounding the Affordable Care Act, the healthcare reform legislation could be struck down in one of the many lawsuits challenging its constitutionality or repealed when the balance of power shifts in Washington, D.C. – especially when one political party has been campaigning almost exclusively on doing just that. This was the reasoning in a 2012 case in Alabama, a 2013 case in Illinois and a 2014 case in Pennsylvania, among others.

Courts in Arizona, California, Hawaii, Illinois and Michigan have allowed the subrogating effect of the Affordable Care Act to be admitted into evidence.

In one Ohio case, the court reduced an $8 million future damage award to $2.9 million by offsetting amounts covered under the Affordable Care Act, but allowing recovery for premiums, out-of-pocket costs and expenses for transportation, home care and housing. In a Hawaii case, the defendant was allowed to cross-examine the plaintiff’s life care planner on the setoff effect of the Affordable Care Act on future medical expenses. In a Michigan case, the court found that “insurance provided under the Affordable Care Act is reasonably likely to continue into the future and that its discussion before the jury is not precluded.”

It’s hard to get a unifying handle on all the cases where defendants have successfully admitted the Affordable Care Act as evidence when arguing true economic damages. This is because of variations in state law as to collateral source rules, but as the Affordable Care Act grows greater roots in the American healthcare delivery system and state legislatures advance collateral source rule reforms in light of the Affordable Care Act, it is almost certain that more and more courts will allow such evidence.

The Affordable Care Act’s potential effect on economic damage recovery in medical professional liability lawsuits is huge. With some courts already accepting the healthcare reform legislation’s provisions as a collateral source of recovery and others not, it is likely one such decision, someday soon, will make its way before the U.S. Supreme Court where the result would set precedent.

Ways the Affordable Care Act Affects Telemedicine

The Affordable Care Act (ACA) of 2010 has had profound effects on healthcare in the United States, including on the practice and use of telemedicine. Join Healthcare Matters for the second part of our series, Physician Focus: Telemedicine, as we sit down with award-winning telemedicine-proponent Jonathan Terry, DO, ABIHM, to discuss the many implications the ACA has for telemedicine.

Dr. Terry explains how the ACA has provisions to help further develop telemedicine services. Through the Center for Medicare & Medicaid Innovation, new care models are being developed that utilize technology in new ways. These new care models can help promote patient access and bring services to those in need. To learn more, watch Part II of our series below. Click here to watch the full interview.


Physicians Down on Health Care Reform

Serious PhysicianA recent study by the Deloitte Center for Health Solutions found that physicians think health reform will do little to reduce costs.

The survey was sent to 16,500 physicians from the AMA’s Master File asking them to take the 30-minute online survey and provided an incentive. Three percent (500 physicians) completed the survey. The survey primarily focused on the Affordable Care Act (ACA) and how they think it will impact the practice of medicine.

In a nutshell:
1. Sixty percent of physicians gave the U.S. healthcare system an overall grade of “C” or “D.”
2. Regarding the ACA, physicians were divided. Forty-four percent said the law is “a good start,” while another 44% said “it’s a step in the wrong direction,” and 12% said they “weren’t sure.”
3. The top 5 factors driving up health care according to the physicians were: “unhealthy lifestyles” of patients, defensive medicine, insurance company costs, hospital costs, and prescription drug costs.
4. Physicians thought enrollment in Medicare and Medicaid would be up along with trips to the ER, because they thought there wouldn’t be enough primary care physicians to see all the new enrollees.

Unfortunately, with health reform on the horizon, physicians don’t have a rosy view of the new year –or years –to come.

Obama's Push for Med Mal Reform

Side Note: In an effort to reform med mal in this country, President Obama’s budget includes $250 million in Justice Department grants to assist states in rewriting their med mal laws. Because med mal case outcomes can vary wildly from state-to-state, trying to establish some sort of standards and predictability across state lines is long overdue. And, the possible result of having med mal premiums decrease would be a welcomed bonus.

A major focus of Obama’s suggested med mal reform is the use of health courts to decide med mal cases. The courts’ decisions would be determined by a specialized, expert judge (as opposed to a jury), and would make awards based on an established, set schedule. Some say this is unconstitutional because it denies patients a right to a jury trial. Others, like us here at MyMedicalMalpracticeInsurance.com, applaud this effort. As physician advocates, we believe that similar cases should receive similar awards. Also, such courts would streamline the med mal trial process, saving physicians time and additional money.

The Obama money could also be used for three other types of state reform. 1) The creation of “safe harbor” laws. These laws would establish that physicians who adhere to best practices standards and the use of electronic medical records would be protected because it presumes that they are conforming to high standards of care and not acting negligently. 2) The establishment of programs that would require doctors and hospitals to immediately address errors. Under such programs, physicians and hospitals would be required to disclose mistakes promptly, apologize, offer compensation and take action to reduce the same type of error in the future. Programs like these have been shown regularly to help physicians avoid med mal lawsuits because it provides for a humanistic practice of medicine and does not “set up” a potentially contentious situation of defensive or avoidance behavior by the physician fearing a med mal lawsuit. Also, should the case still be taken to court, the physician’s apology could not be used as proof against him or her of liability. 3) The establishment of “fair share” rules. These rules would ensure that money awarded in medical liability cases would be in proportion to an individual’s responsibility for injuries. We believe all of these actions could go far in ultimately saving physicians money on med mal policies.

While all of this is good news, Obama’s reform falls short in one significant way. The money cannot be used to impose caps on jury awards in med mal lawsuits –a major necessary piece of liability reform.

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Obama Starts Drive For Medical Malpractice Reforms
by The Associated Press, posted on npr.org

WASHINGTON February 15, 2011, 06:36 pm ET

Putting his own stamp on a long-standing Republican priority, President Barack Obama is launching a drive to overhaul state medical malpractice laws and cut down on wasteful tests doctors perform because they fear lawsuits.

Obama’s budget calls for $250 million in Justice Department grants to help states rewrite their malpractice laws in line with recommendations that his bipartisan debt reduction commission issued last year.

See Full Article

Republicans Seek Details on Med Mal Reform

Side Note: Last week, HHS Secretary Kathleen Sebelius faced a barrage of questions from Senate Republicans regarding medical malpractice reform during a Senate Health, Education, Labor, and Pensions Committee hearing. The Republicans inquired about the lack of med mal reforms in the Affordable Care Act (ACA). Disappointed by the fact that the ACA only addresses the topic of med mal reform by providing $50 million for demonstration project grants to explore alternative ways to settle malpractice cases, Senator John McCain asked Sebelius and the HHS if they could provide a new plan for how med mal cases could be handled. She replied, “Sure.” Not exactly confidence inspiring…

If you would like to lower your med mal premium, fill out our free, no-obligation quote form today.

GOP Senators Grill Sebelius on Malpractice Reform
By Emily P. Walker, Washington Correspondent
MedPage Today
Published: January 27, 2011

WASHINGTON — Senate Republicans grilled Department of Health and Human Services (HHS) Secretary Kathleen Sebelius about the prospects of medical liability reform during a congressional hearing Thursday.

Sebelius appeared before the Senate Health, Education, Labor, and Pensions Committee, invited by Democrats who wanted to highlight some of the most popular provisions in the Affordable Care Act (ACA).

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