STATE LEGISLATIVE UPDATE

MAY 2004 STATE LEGISLATIVE UPDATE

May continued the fight for medical liability reform at the state level. For a toolkit on medical liability reform visit www.pactproject.org.

As of the end of the month, the following state legislatures were in regular session: CA, DE, IL, LA, MA, MI, NH, NJ, NY, OH, PA, RI, and SC. In May the legislatures in AK, AL, AZ, CO, CT, HI, KS, MN, MO, MS, OK, TN, VT and WI adjourned. MS was in special session to discuss medical liability reform. Through May there have been 109,625 bills introduced in the states in 2004 and 17,323 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

The bill creating a $250,000 cap on non-economic damages in Iowa was vetoed by Gov. Vilsack. In Connecticut both houses passed a bill without a cap on non-economic damages, but it did contain an affidavit of merit requirement, mandatory mediation, insurance rate reform and it allowed a judge to review non-economic damage awards over $1,000,000. Governor Rowland followed through on his threat and vetoed the bill since it did not include a cap on non-economic damages. In Illinois the scheduled last day of session (session will have to be extended as the budget has yet to be passed) saw votes in both houses, but no bill passed.

The New Jersey legislature passed a reform bill in May. The bill does not contain a cap on non-economic damages, but does create a subsidy fund to help physicians pay their liability insurance premiums. Physicians, lawyers and other health care providers will pay an annual $75 fee for the next three years and businesses will pay a $3/employee fee. The bill also allows defendants to file an affidavit of non-involvement, requires expert witnesses to have similar certification as the defendant, allows periodic payment for non-economic damages over $1,000,000, and provides more leeway for judges to reduce verdicts.

The Governor of Oklahoma signed tort reform legislation in May. The legislation creates a $300,000 cap on non-economic damages that would only apply if the physician made a settlement offer that is at least 66% of the final judgment awarded to the plaintiff. Also, the cap can be ignored if nine members of the jury find by clear and convincing evidence that the physician was negligent or find by a preponderance of the evidence that the physician's conduct was willful and wanton. These exceptions will lead to actuarial uncertainty so that the bill may not lead to the hoped for premium reductions. The bill also eliminates joint and several liability for defendants less than 50% at fault, protects statements of apology or sympathy from admission in court, and somewhat toughens expert witness requirements. The Governor in New Hampshire signed a bill dealing with expert witnesses. The judge must decide if testimony is based upon sufficient facts or data; is the product of reliable principles and methods; and if the witness has applied the principles and methods reliably to the facts of the case.

The attempt to override the Governor's veto of medical liability legislation in Missouri failed. Mississippi convened a special session to lower the $500,000 cap on non-economic damages, but no agreement was reached in May. Legislation passed both houses in Ohio that protects statements of apology, sympathy, condolences, etc. made by a physician to a patient. The bill also deems out of state expert witnesses to be licensed in Ohio, thus allowing the Ohio medical board to take disciplinary action against them for fraudulent testimony. Additionally, the bill requires a certificate of merit be filed by a similarly board-certified expert, allows a defendant to be dismissed from a case by filing a motion of non-involvement and requires expert witnesses to be certified in the same specialty as the defendant.

PHYSICIAN OWNERSHIP OF HEALTH CARE FACILITIES

Legislation is awaiting action by the Governor in Florida that would prohibit a hospital to be licensed if "The diagnosis-related groups for 65 percent or more of the discharges from the hospital, in the most recent year for which data is available . . . , are for diagnosis, care, and treatment of patients who have: . . . 2. Orthopedic-related diseases and disorders classified as diagnosis-related groups 209-256, 471, 491, 496-503, or 519-520;" This would in effect forbid orthopaedic specialty hospitals in Florida.

SCOPE OF PRACTICE

Legislation passed the Senate in California dealing with physical therapy after it was amended to solely state that physical therapists can promote and maintain physical fitness. The compromise PT bill in Illinois passed both houses and doesn't include either direct access language or language that would forbid PTs from working in a physician owned practice.

A bill was signed in Mississippi allowing chiropractors to call themselves chiropractic physicians, but makes clear that references to the rights and responsibilities of "physicians" in other statutes do not apply to chiropractors unless the statute mentions chiropractors. The Ohio Governor signed the bill allowing podiatrists to make independent hospital admissions.

PROMPT PAYMENT

Legislation passed the California Senate that allows a provider to bring suit for violations of the prompt pay law. The provider can recover damages, interest and penalties and in some cases attorneys fees and costs. Legislation was signed by the Governor in Colorado that requires that clean claims for medical benefits under auto insurance policies must be paid within 30 calendar days for electronic claims and 45 calendar days for paper claims. Late interest is 10% for the first 180 days and 15% thereafter. Legislation was signed in Minnesota that requires that late interest penalties be automatically forwarded to the provider.

PRACTICE MANAGEMENT

The previous mentioned legislation from Minnesota also requires that health plans provide to a physician before a contract is signed the fee schedule, all contract attachments and coding guidelines. The plan must also give notice of amendments to the contract to the provider who can then terminate the contract. Plans also cannot force providers to participate in new products.