Tag Archives: tort reform

MPLI Executive Insights: Paul Greve, Executive Vice President, Willis Towers Watson Health Care Practice

On the latest episode of Healthcare Matters, we interview Paul Greve, Executive Vice President at Willis Towers Watson Health Care Practice for our segment, MPLI Executive Insights. We sat down with Greve during the 2017 Professional Liability Underwriting Society (PLUS) Medical Professional Liability Symposium, where he moderated the panel, “Hot Topics: Regulatory and Related Changes in Healthcare.” We spoke with Greve on many topics, including the effect that changing or replacing the Affordable Care Act could have on hospitals and physician liability and the possibility of including federal tort reform in future healthcare legislation. Greve addressed how measures like caps on noneconomic damages, affidavits of merit and safe harbor laws could impact the medical liability industry.

Greve spoke with us as part of our new segment, MPLI Executive Insights, where we talk with top medical liability industry executives on current trends in medical liability, where the industry may be headed in the future and the impact of politics and reform efforts on the medical liability industry.

MPLI Executive Insights: Andre Stewart, Chief Underwriting Officer – NORCAL Mutual

Join us for the first episode of our new Healthcare Matters segment, MPLI Executive Insights, where we interview top medical liability executives on current and future trends and developments in the industry. Today’s segment features Andre Stewart, Chief Underwriting Officer for NORCAL Mutual, who joined us during the 2017 Professional Liability Underwriting Society (PLUS) Medical Professional Liability Symposium. Stewart discussed several topics with us, including the importance of underwriting profits; how ‘shock losses’ can disturb the market, and the implications of repealing the Affordable Care Act on the medical liability industry.

Founded in 1975 in San Francisco, NORCAL Mutual Insurance Company has expanded from its West Coast origins to offer medical malpractice insurance in 35 states, including newly-added Colorado and Minnesota. NORCAL has maintained a rating of “A” or higher with A.M. Best throughout its history.

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.

Kentucky Senator Pushes Apology Bill to Reduce Medical Malpractice Claims

Thirty-six states have laws on the books which allow physicians and healthcare workers to apologize to patients or their family members in the event of an adverse medical outcome, without it being admissible in court. Kentucky State Senator Ralph Alvarado, MD, who represents the 28th District, wants his state to be number 37. Join us on Healthcare Matters as we interview Senator Alvarado about his efforts to pass an Apology in Medicine law in Kentucky.

First introduced in 2016 as Senate Bill 31, Senator Alvarado’s proposal would “…prohibit the introduction of expressions of sympathy, compassion, commiseration, or a general sense of benevolence in medical malpractice actions.” During the 2016 legislative session, the bill passed the Senate, but did not emerge from the Kentucky House Judiciary Committee. Senator Alvarado has re-introduced the measure as Senate Bill 85 for the 2017 session. During our interview, Senator Alvarado speaks to why Kentucky needs an apology law, drawing from experiences in his own medical practice.

Senator Alvarado is a practicing physician with KentuckyOne Medical Group. Elected in 2015, he is the first Hispanic elected to the Kentucky General Assembly. Senator Alvarado spoke during the third night of the 2016 Republican National Convention.


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.”

President-Elect Trump

Special Report: The Future of the Medical Professional Liability Industry and the PPACA under a Trump Administration

The Future of the Medical Professional Liability, Patient Protection & Affordable Care Act Under a Trump Administration

Having weathered two Supreme Court challenges and more than 60 repeal attempts by a GOP-controlled Congress, it was the 2016 election that ultimately handed the Republican Party the ammunition it needs to neuter the Patient Protection & Affordable Care Act of 2010.

With a President-elect who campaigned on a full repeal and replacement of the Affordable Care Act as well as Republicans in control of both houses of Congress, it’s safe to say that President Obama’s signature health law — if not fully repealed — will undergo significant changes.

Despite the unified Republican government, Democrats in the Senate are likely to filibuster any wholesale attempt at repealing the landmark legislation that brought 22 million Americans healthcare coverage for the first time, leaving Republicans the parliamentary procedure known as reconciliation to hamstring the law often pejoratively referred to as Obamacare. The reconciliation process is restricted to matters that relate to spending, require only a majority vote and would allow Republicans to repeal the individual mandate that all Americans purchase health insurance, take apart the Affordable Care Act’s expansion of Medicaid and rescind the premium tax credits for low- and middle-income individuals purchasing health insurance on the open market.

The Republican Congress moved a reconciliation bill that would have repealed those portions of the Affordable Care Act to President Obama’s desk where it was promptly vetoed in December of last year, and the rhetoric so far suggests they are likely to use that bill — or one very similar — to financially hobble the healthcare law early in the Trump presidency.

The replacement portion of “repeal and replace” will likely take much longer as Republicans try to coalesce around legislation that its members can support and doesn’t result in the politically untenable position of abruptly throwing the newly insured out of healthcare access. Add to that the fact that many of the Affordable Care Act’s regulations have woven themselves into the healthcare delivery system during the last six years, and any quick, complete replacement of the Affordable Care Act is unlikely.

How Will Medical Liability Be Affected?

President-elect Trump has been mute so far on what role medical liability tort reform might play in his vision for the American healthcare delivery system, but Speaker of the House Paul Ryan released a 37-page white paper in June of this year where he broadly outlined his goals for replacing the Affordable Care Act.

Ryan’s white paper makes several calls for federal-level medical liability tort reforms. It argues the United States’ current system for medical malpractice remedy has “imperiled patient access and imposed tremendous costs on our nation. The current system has forced doctors out of practicing in certain specialties; it has caused trauma centers to close; and it has forced pregnant women to drive hours to find an obstetrician. The current system also has imposed a tremendous burden in unnecessary costs on our national healthcare system and federal government. Estimates are that the failure to enact meaningful medical liability reform costs our nation’s healthcare system as much as $300 billion each year.”

In its plea for tort reform, Ryan’s white paper argues “comprehensive medical liability reform that includes caps on noneconomic damages will improve patients’ access to quality care while reducing the overall cost of healthcare in America. Our plan will include liability reform that includes caps on noneconomic damage awards.”

The white paper further promises to “work with the states to pursue a wide variety of options such as loser-pays, proportional liability, the collateral source rule, consideration of the statute of limitation, safe harbor provisions, health courts and independent pre-discovery medical review panels.”

If President-elect Trump were a typical Republican, one could assume he holds views similar to Ryan, but the mercurial populist and serial-filer-of-lawsuits Trump campaigned on sticking up for the “little guy” and never officially disclosed his views on tort reform.

“One of the big questions is where the Trump Administration will be on tort reform,” said Mike Stinson, vice president of governmental relations and public policy for PIAA, the insurance industry trade association that represents entities doing business in the medical professional liability arena. “We’re not 100-percent sure we have a pro-business President-elect who is also going to be pro-tort reform. We usually link those two ideas together, but he could go in directions that would normally seem contradictory.”

Add to that the Freedom Caucus — comprised of conservative, libertarian-leaning Republican members of the House — having thwarted their own party’s Help Efficient, Accessible, Low-cost, Timely Healthcare (HEALTH) Act, which would have imposed a nationwide cap on damages, from getting out of committee earlier this year on grounds that the federal government has no authority to overwrite state civil liability laws, and nationwide medical liability tort reform under a unified Republican government seems like even less of a slam dunk.

How Will Malpractice Litigation Be Affected?

While political partisans and healthcare pundits debated the constitutionality and/or practical effectiveness of the Affordable Care Act, the medical malpractice insurance industry was closely watching the U.S. court system as medical malpractice defense attorneys argued — both successfully and unsuccessfully — 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 damages 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 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 recognized that the Affordable Care Act removed preexisting condition barriers and expenditure limits as well as required all Americans to obtain some basic level of healthcare insurance. If this is the case, they contended, why can’t the defense argue future medical expenses will never be fully paid by the plaintiff out-of-pocket, and as such, the health insurance they are required to carry should be considered as a collateral source of recovery, subrogating portions of the total cost of economic damages?

Rather than paying the total cost of the plaintiff’s life care plan, these defense attorneys argued, the defendant should only be required to pay for the premium costs of obtaining the plaintiff’s 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 barred consideration of the Affordable Care Act offset potential, the most common reasoning had been that the Affordable Care Act’s future is too unsettled. Judges opined that with the heated politics surrounding the Affordable Care Act, the 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.

Conversely, courts in Arizona, California, Hawaii, Illinois, Michigan and Ohio have allowed the Affordable Care Act’s mitigating effect to be admitted into evidence. In the 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 the 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.” In the Ohio case, Jones v. MetroHealth Medical Center, the court reduced a $14.5 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 other expenses.

“If the Affordable Care Act is repealed, you’re no longer going to be able to compel people to purchase health insurance and you’re going to lose the future damages argument,” said Paul Greve, JD, RPLU, executive vice president/senior consultant of the Willis Towers Watson Health Care Practice. “Everyone in our industry had been watching the case Jones v. MetroHealth Medical Center in Ohio. The lower courts agreed with our argument and it was on its way to the state Supreme Court where we hoped it would set precedent. If Hillary Clinton had been elected president and Ohio maintained a Republican Supreme Court, which it did, the chances were very high that Jones was going to be upheld at the highest level, and we would then have a case other courts around the country could look to. That’s probably not going to happen now. If the requirement to purchase insurance is repealed, the argument is probably dead.“

By Michael Matray, the Editor of the Medical Liability Monitor. He can be reached at editor@mlmonitor.com