AAOS Bulletin - August, 2005

In Brief


Alaska has a new law that caps medical liability noneconomic damages at $250,000, except in cases of wrongful death or severe permanent physical impairment that is more than 70 percent disabling. In these cases the cap would be $400,000. The caps apply regardless of the number of health care providers against whom the claim is asserted or the number of separate claims or causes of action brought with respect to the injury. However, they do not apply in cases of recklessness or willful conduct.


Florida has crafted two new laws in response to constitutional amendments passed by voters in 2004. One law gives the public the right to view information on a health care facility and on physicians’ adverse medical incidents. The other law forbids physicians who have committed three or more incidents of medical malpractice from being licensed.


Illinois passed a law that requires hospitals and surgery centers to report the costs of their outpatient procedures, as well as information about their infection rates, complications and mortality rates. The Illinois Department of Public Health will post this information on its Web site. Supporters of the law say it will allow patients to make judgments about the quality and cost of their health care.


“Expression of sympathy” legislation passed, allowing physicians (and their employees) to make statements of sympathy or apology to patients without those statements later being used against the physician in court. Supporters of this type of legislation claim that allowing expressions of concern and remorse will ultimately result in fewer lawsuits and lower settlement costs.


Physicians will soon see the effects of liability rate subsidies approved by the General Assembly. The state’s largest liability insurance provider has announced that doctors who have already paid their premiums for this year will have the option of applying the subsidy to their next renewal, or getting a cash refund. The state money to pay for the subsidies comes from a tax on HMO premiums.


A new prompt payment law passed, creating penalties for health insurers that fail to pay claims on a timely basis. The law gives timelines for settlement of claims, and insurers who fail to meet these deadlines will be charged 12 percent interest on the payments. Any insurer found to have engaged in an unfair payment pattern could face fines of up to $150,000 for flagrant violations, along with suspension of its license.

New Jersey

A recent court ruling allows plaintiffs in medical liability cases to pursue a physician’s personal assets if the physician’s malpractice insurance provider is in liquidation. The state had created a guaranty fund to deal with such cases, with a $300,000 cap. The court ruled that physician defendants would be personally responsible for damages in cases that exceed that amount. In recent years, two malpractice insurance providers in New Jersey have filed for bankruptcy.

Legislation to protect patients from incompetent health care providers passed. The new law provides protections for those who inform authorities about misconduct, requires background checks as a condition of license renewal, and mandates greater disclosure of disciplinary actions taken.


There has been a significant amount of action this year relating to diagnostic imaging and physician employment of physical therapists. A new bill was introduced in Pennsylvania that touches on both topics. The bill would forbid physicians from referring patients to “designated health services” in which the physicians have a financial interest. The definition of “designated health services” includes physical therapy, comprehensive rehabilitative services and diagnostic imaging services.

A state court overturned legislation that restricted liability claims in civil suits. The law specified that defendants—including those of medical liability lawsuits—who were found to have less than 60 percent liability would not have to pay the full award unless their actions were intentional. The court said the law violated the state’s “single-subject” requirement for legislation because it had been tacked on to another bill that had nothing to do with liability lawsuits. The ruling reinstates a previous law that states when two or more parties are found negligent in a civil lawsuit, any of them can be forced to pay the entire amount.


The state has a new law that exempts from civil liability physicians who give free care through medical clinics. The new protections would not apply in cases of gross negligence or willful misconduct.


Two laws recently passed will make it easier for volunteers to provide health care. One law increases the availability of liability insurance for volunteer health care providers. The other reduces licensing fees and continuing education requirements for otherwise retired health care practitioners who want to continue providing volunteer charity care.

This roundup was 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.

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