February 2003 Bulletin

States Report

In Brief


Legislation was passed amending the state’s Certificate of Need (CON) law. The bill raises the capital expenditure threshold for obtaining a CON from $2 million to $2.5 million; or improving, constructing or replacing a clinical service area; and completely eliminates the need for a CON for improving non-clinical areas. The bill also amends the CON procedures for "fixed magnetic resolution imagers (MRIs)." One will not need a CON to locate an MRI in counties with less than 160,000 without a fixed MRI (currently two).

New Jersey

Gov. Jim McGreevey signed a bill that creates a searchable physician or podiatrist profile that contains some of the following information: a description of any criminal convictions within the most recent 10 years; a description of any final Board of Medical Examiners disciplinary actions and any final disciplinary actions in other states within the most recent 10 years, and a description of the revocation or involuntary restriction of privileges or the resignation from or non-renewal of medical staff membership for reasons related to the practitioner’s competence or misconduct or impairment. The profile will also contain all medical liability court judgments, arbitration awards and settlements in which a payment has been awarded to the complaining party within the last five years.

For the first time, an insurance company was fined for violating the state’s prompt payment law. On Nov. 4, 2002, the fine of $200,000 against CIGNA HealthCare of New Jersey was announced. The state is currently examining the prompt-pay practices of two other managed care organizations.


The legislature passed two tort reform bills in response to the current medical liability insurance crisis in that state. The first bill changes the law of joint and several liability. It provides that if one defendant is found to be more than 50 percent at fault he or she is jointly and severally liable for the economic damages (lost wages, medical bills, etc.). If a defendant is found to be less than 50 percent at fault, he or she is only responsible for their proportionate share of the economic damages.

The second bill is a comprehensive tort reform bill. The bill creates a four-year statute of repose, in addition to the one-year statute of limitations. A statute of repose puts a hard cap on when a plaintiff can sue while a statute of limitations starts when the plaintiff "discovers" an injury. The bill allows periodic payments of future damages over $50,000. It also strengthens binding arbitration procedures and allows introduction of collateral sources of recovery by the plaintiff.

The bill institutes a cap on non-economic damages of "$250,000 or an amount equal to three times the plaintiff’s economic loss . . . to a maximum of $350,000 for each plaintiff or a maximum of $500,000 for each occurrence." This means that if there is more than one plaintiff, the most they can all get in non-economic damages is $500,000. If the plaintiff’s injuries are "permanent and substantial physical deformity, loss of use of a limb, loss of a bodily organ system, or permanent physical functional injury that permanently prevents the plaintiff from being able to independently care for self and perform life sustaining activities," then the limit is $500,000 to one plaintiff and $1,000,000 for all the plaintiffs.


Newly elected Gov. Ed Rendell promised to alleviate the medical liability insurance crisis after he was sworn into office. His proposed legislation would eliminate the state-run excess coverage premiums in 2003 for physicians in four high-risk specialties: neurosurgery, obstetrics, orthopedic surgery and general surgery. The premiums for the mandatory excess coverage for other types of physicians would be reduced, but not eliminated. The $220 million needed to fund this reduction would be raised from a one-time assessment of health care insurers’ surplus funds. Previously, the payment deadline for premiums for the excess coverage was extended until March 31, 2003.

According to the Pennsylvania Medical Society, over 900 physicians–including specialties such as orthopaedics–have left the state, closed their practice or stopped high-risk procedures. Last year, many physicians also threatened to take a leave of absence, but were dissuaded by the governor’s proposed legislation.

Also, the State Supreme Court is considering adopting a rule requiring plaintiffs in medical liability cases to have a certificate of merit from a physician that states the claim is medically worthy of being heard and does not fall under the category of a frivolous claim.

Gov. Rendell’s medical liability task force is also looking for additional solutions to resolve the long-term medical liability crisis and is expected to make its recommendations by April 1.

Senate Bill 50 was introduced to allow the legislature to begin the constitutional amendment process that would put a cap on non-economic damages.

This medical liability insurance crisis has also drawn the attention of President George W. Bush, who joined legislators, physicians and the public in January to rally in support of tort reform.

West Virginia

At the beginning of the year, dozens of surgeons in the northern panhandle took a leave of absence due to the state’s medical liability insurance crisis. This action left several hospitals with little or no surgical coverage.

A study of physicians conducted by the U.S. Chamber of Commerce of West Virginia found that 90 percent of respondents believe there is a shortage of physicians in the state. Of those 90 percent, 99 percent believe that medical liability insurance costs are affecting this shortage. Ninety-five percent of respondents believe that there is a shortage of physicians in high-risk specialties, such as orthopaedics. Sixty-five percent of respondents stated that they have considered moving out of state due to the insurance crisis. For more information, visit Web site: http://www.uschamber.com/press/releases/2003/january/03-04.htm.

Both Gov. Bob Wise and the legislature have promised to pass some form of tort reform early this year.

Home Previous Page