STATE LEGISLATIVE UPDATE

September, 2002 STATE LEGISLATIVE UPDATE

In September the United States House of Representatives passed H.R. 4600 to enact tort reforms to alleviate the medical liability insurance crisis. The bill now goes to the Senate where it faces an uncertain future. State policymakers continue to address the situation and most of the action is expected to take place at the state level.

As of the end of the month, the following state legislatures were in regular session or in recess: MA, MI, NC, NJ, NY, OH, and PA. Through September there have been 97,262 new bills introduced in the states (this does not include carry-over bills from last year) and 26,486 have become law.

Some of the bills the Department of Health Policy is tracking are outlined below. If you have any questions please give Jay Fisher a call at 800-346-2267, x4336.

TORT REFORM

The Mississippi legislature went into special session in September to address the medical liability insurance crisis. The House and Senate each passed a bill, but negotiators from the two houses met for over two weeks and could not reach agreement on compromise language. The legislature is scheduled to return in early October to resume deliberations on the bill. It is unclear whether the two sides will be able to find common ground.

The bill as passed by the Senate has a $250,000 cap on non-economic damages, while the House version has a $1,000,000 cap with an escape clause allowing higher non-economic damages if the judge determines it is necessary. The Senate version includes a state-run liability insurance pool for doctors, while the House bill does not. The two bodies also disagree on venue reform and the elimination of joint and several liability.

During negotiations the Senate conferees offered a $700,000 cap while the House offered a $1,000,000 cap with no exceptions, but the cap would be indexed for inflation. The House offered to eliminate joint and several liability only for non-economic damages, while the Senate is holding fast to its position that a defendant should only be responsible for their portion of all of the damages.

The West Virginia State Medical Association stated that it would not go forward with plans to start a physician-owned liability insurance company unless the state legislature enacted a series of tort reforms. The state legislature last year passed a law authorizing the creation of a physician mutual insurer and pledged $10,000,000 in loans as seed money. The physicians are pushing for a $250,000 cap on non-economic damages, elimination of joint and several liability and a hard cap on damages for trauma doctors.

In Florida, Governor Bush appointed a Select Task Force on Healthcare Professional Liability Insurance to study the professional liability insurance crisis in the state. Gov. Bush commented that rising premiums have forced physicians to go bare, eliminate high-risk procedures and retire. The Task Force is made up of high-level officials from five Florida universities.

The Pennsylvania Orthopaedic Society released the results of a study showing that Pennsylvania's orthopaedic surgeons continue to face a crisis in medical liability insurance affordability and availability. Physicians need immediate relief in order to ensure patient access to specialty medical care.

Nearly 17% of the survey population reported moving out of state or reducing their surgical services. Additionally, 386 orthopaedic surgeons reported that their current medical liability policy will not or may not be renewed for another term. Collectively, these doctors treat approximately 1.3 million patients annually, 34% of whom are 65 and over. Compared to the national average, Pennsylvania has 15% fewer orthopaedic surgeons serving patients over 65. The Pennsylvania Orthopaedic Society wants to preserve the important partnership between patients and their specialty doctor and is calling for passage of a package of common sense insurance and liability reforms to address this issue.

WORKERS COMPENSATION

A Texas state court recently ruled that the new Texas Workers Compensation Medical Fee Guideline violated state law and was illegal. The fee schedule was adopted after passage of legislation last year to reform the workers compensation system in Texas. The fee schedule would have set reimbursement at 125% of Medicare reimbursement.

The plaintiffs, the Texas Medical Association and the AFL-CIO, argued that the fee schedule violated the requirements of the new law, was set arbitrarily without sufficient evidentiary support and would result in harm to the citizens of Texas. Two orthopaedic surgeons testified during the trial that most orthopaedic surgeons would not be willing to suffer the average 42% reduction in reimbursement for surgical codes imposed by the proposed fee schedule.

The Texas Orthopaedic Association surveyed its members on workers compensation and found that under the old fee schedule 15.81% are not taking new workers comp patients and if the proposed fee schedule takes effect 59.52% of respondents will no longer accept new workers comp patients and 18.65% of respondents will place some limits on new patients.

REIMBURSEMENT

Gov. Davis of California signed into law the Health Care Provider's Bill of Rights. Under the law provider contracts cannot be materially altered without negotiation and agreement between the plan and the provider nor can providers be forced to accept more patients if it would endanger access or continuity of care. Plans must give providers 15 days notice before asking for compliance with quality improvement or utilization management programs.

OSTEOPOROSIS

A section of a bill in New Jersey to mandate osteoporosis screenings was deleted because "the medical community is not yet in agreement with respect to the recommended frequency of these screenings." A women's health bill in New York, that includes mandated osteoporosis screenings, was signed by the Governor.