Monday, June 4, 2012
Mark Behrens, a partner at Shook Hardy, authored an opinion letter in Sunday's Philadelphia Inquirer about tort reform in Pennsylvania. While advocating for tort reform, the letter also provides a good overview of recent changes enacted in Pennsylvania, such as the Fair Share Act, and the home venue rule.
Friday, June 1, 2012
Senate and House negotiators agreed on a bill that retained the House's "loser pays" provision if a claimant turns down an early offer after requesting it:
A claimant who rejects an early offer and who does not prevail in an action for medical injury against the medical provider by being awarded at least 125 percent of the early offer amount, shall be responsible for paying the medical care provider's reasonable attorney's fees and costs incurred in the proceedings under this chapter.
Both houses are expected to pass it next week and then it will go to the governor. The Union Leader has details.
Tuesday, May 29, 2012
St. Louis businessman John Brunner and former State Treasurer Sarah Steelman, both candidates for the U.S. Senate Republican nomination, sparred over tort reform in a debate last week. The News-Leader has more.
Wednesday, May 23, 2012
A couple of weeks ago (while I was busily grading papers and exams), Susan Ladika published a piece at Carinsurance.com that was picked up by Fox Business News entitled Reforming Reform: Fixing no-fault insurance.
In the article, the author discusses current efforts to reform no-fault insurance, given its greater-than-expected costs. No-fault has been successful in some ways. The article often relies on a 2010 RAND study by James M. Anderson, Paul Heaton, and Stephen J. Carroll, The U.S. Experience with No-Fault Automobile Insurance. That study, at pages 96-97, found that "no-fault systems provide reimbursement for a larger proportion of economic losses, greater satisfaction with the speed of payment, and faster resolution of third-party claims." However, no-fault was advertised as being cheaper than liability insurance. Instead, in most states, it has been just as expensive, if not more so. As a result, no-fault, which once seemed on the cusp of becoming the law of nearly every state, has lost traction. What went wrong and how can it be fixed?
First, the thresholds were set poorly. No-fault was designed to compensate the injured for small and moderate injuries and leave tort for serious injuries. This would be more efficient and would leave the full (and expensive) tort system for those claims that were sufficient to merit it. The key is to separate small and moderate claims from serious ones. This was done by thresholds. However, monetary thresholds were set too low and verbal thresholds were too vague. The Ladika article points to three jurisdictions, Georgia, Connecticut, and Colorado, that moved back to liability insurance from no-fault. In all three jurisdictions, costs were reduced when the state reverted to liability insurance. However, each jurisdiction had a monetary threshold (as part of a combination threshold) that was miserably low: Georgia's was $500, Connecticut's was $400, and Colorado's was $500 (though raised to $2,500 before it was repealed in 2003). Almost any auto accident will create $500 in costs, which means that the tort system will operate in addition to the no-fault system for such claims. As such, costs are bound to increase.
In addition to being set too low, monetary thresholds, even if part of a combination threshold, created incentives for padding medical bills, inequitably treated those living in low cost areas, and provided an easy way for no-fault opponents to undermine the law. Instead, jurisdictions should use a verbal threshold that is sufficiently limited and clear to reduce litigation.
Second, protections against fraud were not included. This may be understandable. No one thought that no-fault would have fraud problems; tort, with its payment for pain and suffering, was supposed to be the favored target for fraud. However, that was overly optimistic. No-fault has attracted considerable fraudulent claims in many jurisdictions, and it must be dealt with to keep costs under control. This may be jurisdiction-specific, but New York has proposed legislation that would: (1) modify the requirement that insurers pay claims within 30 days if there is a suspicion of fraud; (2) allow the insurance department to review and decertify unscrupulous medical providers from billing and collecting no-fault benefits; and (3) increase penalties and enforcement for insurance fraud.
Third, no-fault insurers did not implement the same restrictions that health insurers routinely use. The RAND study found that a major problem with no-fault was spiraling health care costs. However, it was not clear whether total costs increased or there was a reallocation of costs from health insurance to auto insurance. No-fault insurers need to implement restrictions, such as fee schedules and medical protocols, that are already used by health insurers. For example, New Jersey recently implemented precertification medical guidelines or "Care Paths." Care Paths set forth the particular paths of treatment that are acceptable for specified injuries; when the treatment plan deviates from the Care Paths, the treatment will be reimbursed only where demonstrated to be reasonable and necessary.
Another improvement would be to make no-fault into a choice plan. Allow motorists to choose between tort and no-fault. Evidence from Kentucky, New Jersey, and Pennsylvania suggests that a large number of motorists will choose no-fault if given the option.
Tuesday, May 22, 2012
The Pittsburgh Post Gazette reports that the number of medical malpractice cases have dropped 47% in the ten years since two reform measures took effect. In particular, Pennsylvania requires that "cases be brought in the venue only where the cause of action arose and that a certificate of merit be obtained from a medical professional to certify the lawsuit before complaints are filed." The Gazette reports:
Despite the 10-year downward trend, there was a small uptick in the number of medical malpractice filings in Pennsylvania between 2010 and 2011. There were 1,528 filings in 2011 and 1,491 filings in 2010; 2010, meanwhile, had the lowest number of filings since the rule changes
Thursday, May 17, 2012
Last week, the House version was amended. Under the Senate bill, if the claimant requested an early offer and then declined it, the claimant would have to prove gross negligence to a clear and convincing standard. In the House version, if the claimant requested an offer and then declined it, the claimant would have to pay the health care provider's attorney's fees if the claimant lost or recovered approximately the same amount of money that was in the early offer. Both bills passed with veto-proof majorities. The Concord Monitor has the story here (scroll down past the first section on sealed bids).
Tuesday, April 24, 2012
From the Blog of the Legal Times:
House Republican leaders continued to push a medical malpractice reform bill this week that caps non-economic damages at $250,000 and limits lawyer contingency fees, arguing that it would save taxpayers $41 billion and prevent defense spending cuts.
BLT has more.
Thanks to Lisa Smith-Butler for the alert.
Wednesday, April 18, 2012
New Hampshire has proposed an early offers regime for medical malpractice cases. It passed the Senate and will be up for a vote in the House shortly. Pursuant to the bill, a patient who believes she is the victim of malpractice may send a notice of injury to the heath care provider requesting an early offer. The provider has 90 days to decide to extend an early offer and can ask the patient to undergo a physical exam. If extended, the offer must cover all economic loss—medical bills and lost wages. There are modest amounts of pain and suffering damages included based on classification of the injury as determined using the National Practitioner Data Bank severity scale. The patient then has 60 days to accept or reject the early offer. If she accepts the offer, the case is over. However, if she rejects the offer, she must prove gross negligence to a clear-and-convincing standard in order to recover.
The bill is based on a proposal authored by Jeffrey O’Connell, with the change of allowing the claimant, not the health care provider, to initiate the early offer process. I endorse the change and support the bill, though a similar system could be implemented without legislation. Criticism of the bill has come from the perspective of claimants. I’ll try to address specific points shortly, but I want to start with the general proposition that my support for the bill is largely based on its advantages for claimants. There are other potential benefits—savings, etc.—but they are not the chief reason I support early offers.
Early offers allows, but does not force, a claimant to bypass the tort system. Tort law has virtues, but among them are not certainty and swiftness. Because of an understandable focus on individual justice, the tort system can be very uncertain and slow, with significant transaction costs. There are many claimants who would prefer to have their claims resolved along insurance principles—with more certain payment for economic loss, taking care of the their urgent needs. I have sat at the hospital bed of a catastrophically injured loved one. After his health, my main concern was that he not be bankrupted by the enormous costs of life-saving care.
Some claimants have the resources to wait out a five-year malpractice struggle. Some claimants may enjoy the adversarial proceedings of depositions, interrogatories, and cross examinations. But all do not, and early offers gives them a possible way around them, while providing for basic economic loss much more swiftly. What follows are some objections to early offers I’ve seen in various columns and posts. I try to respond to each.
Monday, April 9, 2012
Back in March, Chris reported on the New Hampshire "early offer" bill that is pending in the state Senate. As the Senate takes up consideration of the bill, it continues to receive media coverage. SeaCoast Online has a detailed report in today's paper.
Friday, April 6, 2012
The families of two victims of the April 2007 shooting at Virginia Tech won an $8M award last month. However, that award will be reduced to $100,000 per family pursuant to the Virginia Tort Claims Act. Many states have tort claims acts which took the place of full sovereign immunity; they allow tort claims, but with capped damages and sometimes at a higher standard, such as gross negligence. Reuters has the story.
Thursday, March 29, 2012
Wednesday, March 28, 2012
Yesterday the Missouri Supreme Court heard arguments on whether that state's 2005 cap on non-economic damages in medical malpractice cases violates the state constitution. In 2011, a jury decided that physicians failed to act when an unborn child showed signs of distress in the womb. The child was born with cerebral palsy and will not progress beyond the mental capacity of a three-year-old. The jury awarded $4,821,000 in total damages. Of that amount, $1.45M was non-economic and was reduced to $350,000 pursuant to the cap. The Springfield News-Leader has the details.
Monday, March 26, 2012
The U.S. House of Representatives has passed nationwide tort reform measures as part of a bill repealing the Medicare Independent Payment Advisory Board, created as part of the Affordable Care Act in 2010. Per an ABA summary, the bill, H.R. 5, the "Protecting Access to Healthcare Act," would
- Cap noneconomic damages at $250,000 in medical suits,
- Allow courts to reduce contingent fees and to redirect damages to plaintiffs,
- Create a “fair share” rule in which each party would be liable only for its share of any damages, pre-empting state laws that call for joint and several liability, and
- Abolish the collateral-source rule.
The Senate is unlikely to consider the bill, and President Obama has threatened to veto it, if passed. The Hill's Floor Action Blog has more.
Monday, March 19, 2012
MN Governor Mark Dayton has signed legislation restoring caps in wrongful death cases against state or local governments to pre-2008 levels. The new law caps liability at $1 million because of “a single occurrence, if the claim involves nonprofit corporations engaged in or administering outdoor recreational activities funded or operating under a government-issued permit.” StarTribune Politics has more.
Friday, March 16, 2012
The New Hampshire Senate is touting an early offer approach to medical malpractice. The proposal was designed with the input of Jeffrey O'Connell (Virginia) who conceived of the concept of early offers and has championed it for years. The NH proposal allows the patient, not the health care provider, to initiate the early offer process. One proponent of the bill explained:
victims of malpractice would send a notice of injury to the medical provider. The provider then has 90 days to decide to extend an early offer and can ask the patient to undergo a physical exam. The patient then has 60 days to accept or reject the early offer, and can ask for a hearing with state insurance officials if any disputes need to be resolved.
The Union Leader has the details.
Tuesday, February 21, 2012
Thursday, February 9, 2012
In Arizona, the Economic Development and Jobs Creation Committee approved a bill that would exempt manufacturers from claims for punitive damages if they followed all federal, state, or agency standard for creating a product. The bill moves to the full Senate. The Arizona Republic has the story.
In Minnesota, the House last week passed several tort reform measures. The measures, which passed largely on party-line votes, include:
• Reducing Minnesota's statute of limitations, the time limit for filing suit, from six years after the incident to four years.
• Allowing an early appeal to question the class-action status of large suits, in an attempt to weed out frivolous actions.
• Limits on attorney fees in certain cases, such as wrongful termination or sexual harassment, where state law requires the fees be paid as part of the lawsuit.
• Reducing the interest rate on judgments that remain unpaid while a case proceeds. The current 10 percent rate would be reduced to a market-based rate no lower than 4 percent.
The Minneapolis Star Tribune has the story.
Wednesday, November 2, 2011
Neil Alldredge (National Association of Mutual Insurance Companies) has an interesting article on reforming no-fault automobile laws, including specific recommendations for individual states. Here's a sample:
Early on, many states experienced cost savings, and no-fault seemed full of promise. Over time, however, some states’ laws produced unintended negative consequences. While the system intended to clear the court dockets of minor lawsuits, court dockets have become more cluttered because of weak litigation thresholds.
Friday, October 21, 2011
Eric Turkewitz has a great post on New York's highest court wading into the issue of what constitutes a "serious injury" for purposes of the state's no-fault threshold. The failure to set proper thresholds is one of the biggest reasons that no-fault has not performed as well as it was expected to. Monetary thresholds were set too low and verbal thresholds were too vague. Eric rightfully challenges the language of New York's verbal threshold (and it's one of the best-drafted statutes).
Tighter threshold language is relevant to an issue I've been working on lately. The Malaysian automobile tort system is terribly inefficient. Among other things, Malaysia has separate hearings for liability and damages, often months or even years apart. A group of Malaysian researchers led by Norila Abu Hasan is preparing a no-fault choice automobile proposal. Last December, they visited the United States and consulted several scholars, including Andy Popper and Jeffrey O'Connell. I told them drafting a proper threshold was crucial to the success of the system. I'll be presenting a paper on thresholds in Malaysia in December.
Eric provided the language in the New York statute in his post, complete with his italicized portions indicating vagueness problems:
- A personal injury that results in death;
- A significant disfigurement;
- A fracture;
- The loss of a fetus;
- Permanent loss of use of a body organ, member, function or system;
- Permanent consequential limitation of use of a body organ or member;
- Significant limitation of use of a body function or system; or
- A medically determined injury or impairment of a non- permanent nature which prevents the injured person from performing substantially all of the material acts which constitute such person’s usual and customary daily activities for not less than ninety days during the one hundred eighty days immediately following the occurrence of the injury or impairment”.
Eric also recommended that the legislature revisit the language. As someone who will be recommending threshold language in the near future, how should it be changed? I'd love to hear from Eric or anyone else who has ideas on the subject.
Tuesday, October 18, 2011
The AP reports that the Mississippi Supreme Court has called for additional briefing in a certified question regarding the constitutionality of Mississippi's $1 million cap on non-economic damages.
Specifically, in the case before the court, the parties agreed that $2.2 million of the $4 million jury award was for non-economic damages. The Mississippi Supreme Court has asked the parties to explain how they reached that amount.
More from the AP story.