AAOS Bulletin - April, 2005

In Brief


Efforts to limit the ability of orthopaedic surgeons to own and operate advanced imaging equipment, such as magnetic resonance imaging, computed tomography and positron emission tomography, have hit California. A recently introduced bill would consider the use of such imaging on a patient to be an unlawful referral for all but radiological practices.


The state’s Supreme Court recently issued a decision that would allow for defamation lawsuits against physicians who participate in peer review or who initiate investigations regarding a colleague’s conduct. Although physicians have immunity in judicial and quasi-judicial proceedings, those who give information to a professional board, medical review committee or the state Department of Public Health will run the risk of being sued. The refusal by the U.S. Supreme Court to review a lower court’s decision means that the state of Connecticut will not be able to sue HMOs on behalf of its citizens. The state had claimed that the HMOs used inappropriate and arbitrary guidelines to deny coverage and failed to make timely payments to providers. The lower court had ruled that Connecticut does not have standing to sue on behalf of its citizens on this matter.


A Florida orthopedic surgeon is suing several HMOs to force them to pay a fair amount for services provided. The suit was filed as a racketeering violation, claiming that the HMOs conspired to cut payment rates to physicians who are not part of their networks.

Gov. Jeb Bush’s plan to privatize Medicaid may be running into trouble, as state lawmakers from both parties begin to see the problems with the state’s privatization push. The uneven record of the private companies doing work formerly done by the government, the deluge of related complaints, and charges of favoritism involving contracts have made many in the Republican-controlled legislature wary about what private enterprise can actually do, according to the Orlando Sentinel. The governor’s privatization plan would have made Medicaid operate more like private insurance with companies competing to provide coverage to Medicaid recipients.


Good news from Georgia, as the state has finally passed meaningful tort reform. In addition to a cap of $350,000 for non-economic damages, the new law also creates tighter expert witness testimony rules and prevents physician apologies from being used against them in court. In response, the state’s primary medical liability insurance provider pledged to roll back premiums.


Requests by insurance companies to increase malpractice rates have declined since the state passed reforms in 2002, the Las Vegas Sun reports. Actual rate reductions may come once the constitutionality of the law is confirmed in court.

South Carolina

On February 24, a court order was issued that will allow the state’s Physical Therapy Board to punish therapists who accept referrals from physician employers. If allowed to stand, this decision could be used as a precedent in future attacks on physician ownership of physical therapy services. The South Carolina Association of Medical Professionals has stated that the fight on this issue is not over and intends to appeal the decision.

South Dakota

A bill passed in March requires hospitals to report the prices of their 25 most common inpatient procedures each year. The goal of the bill is to increase competition among hospitals, with the intended result being better health care at lower prices. The information posted could contain disclaimers on factors such as case severity and individual patient variations, which critics have suggested may make the data meaningless to consumers.


Two bills have been introduced in Tennessee that would limit imaging use by non-radiologists. The first would prohibit physicians from investing in radiologic equipment unless there is a radiologist employed to read the results. The second bill would specify that a physician who owns diagnostic equipment must disclose ownership in that equipment and offer the patient a list of alternative sites where testing can be done.


In response to the success of recent tort reform, two of the state’s largest malpractice insurers have announced plans to cut their rates this year. The tort reform, passed in 2003, put a $250,000 cap on noneconomic damages, and malpractice lawsuit filings are down about 70 percent since then. Some state legislators feel that larger rate reductions than those proposed should be forthcoming, as doctors and patients should be seeing more of the savings created by the law. One of the state’s malpractice insurers has actually raised its rates since the reform passed.

According to separate studies cited by the Houston Chronicle, recent cuts in heath care spending to balance the state’s budget have had a significant effect on the state’s economy, including $16 billion in lost productivity, employment growth stunted by 70,000 jobs, and $1.5 billion in costs shifted to local taxpayers. The studies show that budget cuts also have resulted in increased emergency-room visits, increased local taxes, lost federal matching funds, and lost time and work wages

Prepared by Bruce Allain, JD, a legislative analyst in the department of socioeconomic and state society affairs. He can be reached at allain@aaos.org

Close Archives | Previous Page