STATE LEGISLATIVE UPDATE

DECEMBER 2003 STATE LEGISLATIVE UPDATE

This Update brings 2003 to a close. Hopefully 2004 will bring more successes at the state level on tort reform and an end to the medical liability insurance crisis.

As of the end of the month, the following state legislatures were in regular session or in recess: MA, NJ, NY, and PA. Through December there have been 179,060 bills introduced in the states and 42,296 have become law.

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

TORT REFORM

A legislative committee report in Connecticut recommended that the legislature not enact a cap on non-economic damages in the crisis state. Instead, the report suggested setting up an emergency fund to help doctors in high-risk specialties pay their insurance premiums. The legislature will debate the issue next year.

In Washington Governor Locke proposed appropriating $10 million to create a patients compensation fund. Physicians are taking a cap or nothing stance in the legislature. Earlier this year the Senate passed a bill with a cap, but the House refused to pass a cap. A statewide poll in Washington found that 72 percent of voters support limiting non-economic damage awards, but only 62 percent support a cap as low as $250,000. The poll also found that 79 percent of voters would be "more likely" to vote against a candidate who received support from "personal injury lawyers."

A new report from Tillinghast-Towers Perrin found that medical liability claims in Pennsylvania cost every person in the state between $103 and $124 versus the national average of $85. The study also concluded that nationally less than 50 cents of every dollar awarded goes to the plaintiff and only 22 cents on the dollar for economic damages goes to the plaintiff.

The Pennsylvania legislature passed a bill in December to fully abate the premiums for the excess compensation fund (known as MCARE) for certain providers in 2003 and 2004. The abatement will be 100% for high-risk specialties, such as orthopaedics. To receive the abatement the physician must pledge to stay in Pennsylvania for at least one year. The abatements will be financed by a 35-cent increase in the cigarette tax.

According to an AMA study the medical liability crisis is affecting what specialty medical students choose. Fifty percent of respondents said the crisis is affecting what specialty they plan to enter and 39% said the crisis affected in what state they would perform their residency.

A Georgia House of Representatives study committee heard testimony in December about the medical liability insurance crisis in the state. The Oregon Medical Association has raised more than half a million dollars to mount a ballot measure to cap non-economic damages in medical liability claims at $500,000. The association estimates that at least $4 million will be needed to sustain the campaign until the Nov. 4, 2004 election. An audit of the Nevada Board of Medical Examiners found that the number of medical liability claims filed has increased dramatically since the legislature eliminated pre-trial screening panels.

A new coalition was created in Maryland that will lobby for legislation to decrease the cap on non-economic damages from $635,000 to $350,000 or $250,000. The coalition hired the former state Insurance Commissioner to lobby on its behalf in Annapolis. The trial lawyers are raising over $1,000,000 to lobby against the proposal. The Governor has indicated that reforming the medical liability laws is a top priority.

The House Republicans in Minnesota introduced a broad-based health reform bill that includes tort reforms. The bill would allow the Board of Medical Practices to create best practice guidelines. In a medical liability trial if a physician shows that he or she followed the guidelines it would be an absolute defense against the allegation that they did not follow accepted standards of practice. The bill would also set a $250,000 cap on non-economic damages and index that amount to inflation. Attorney contingency fees would be limited by the bill.

The Governor of Wisconsin signed a bill to insure that the assets of the patient compensation fund could only be used to compensate patients. Earlier in the year the Governor was threatening to use monies from the fund to help balance other parts of the budget.

WORKERS' COMPENSATION

After major reform of the Texas workers' compensation system led to increased hassles and decreased reimbursement, the number of physicians registered to treat workers' comp patients decreased from 30,000 to 13,000. In December, the Lieutenant Governor created a select legislative committee to consider a major overhaul of the entire workers' compensation system in Texas. According to media reports, the Committee will "consider issues including medical fee guidelines, therapeutic and pharmaceutical care, streamlining the claims process, and the creation of a provider network like businesses use for health care plans."

REIMBURSEMENT

A federal court in California blocked a 5% cut in Medicaid reimbursement rates for fee-for-service providers that would have gone into effect January 1, 2004.

JOINT NEGOTIATIONS

While this issue has not been as popular in the state legislatures in 2004 a joint negotiations bill was debated in committee in December in Massachusetts.

PROMPT PAYMENT

A bill was introduced in Michigan to require health plans to "establish clear and unambiguous policies and procedures for the submission of claims." The bill also would limit how a plan changes "any coding, policy or procedure for the submission of claims, or reimbursement rate or methodology."