AAOS Bulletin - October, 2005

In Brief


In response to the recently passed any-willing-provider law, Arkansas Blue Cross and Blue Shield, the state’s largest insurer, has announced that it will cut reimbursements by 10 percent for doctors treating patients in some plans. The insurer is predicting that costs will rise, and is preemptively making the cuts.


Health care providers recently told state legislators that the change from a no-fault system of automobile insurance to a tort system has placed the state’s trauma care system on the verge of a major crisis. As a result of the new system, enacted by lawmakers in 2003, many drivers are not covered for trauma services when a serious accident occurs. In a no-fault system, insured drivers need only to prove they were injured to receive insurance funds. Relying on a tort system means that injured parties have to win lawsuits before they receive the funds to pay for their health care. Subsequently, physicians may have to wait years for a suit to be settled, and hope for a positive outcome, before receiving payment.


The state legislature passed and the governor signed a medical liability reform bill into law. Although it doesn’t include a cap, the bill does have a number of other provisions affecting litigation and insurance regulation, including a requirement for courts to automatically review non-economic damage awards of more than $1 million.


A new tort reform law was passed in August that caps non-economic damages at $500,000 for physicians and $1 million for hospitals. The law also gives the state new powers to regulate medical liability rates, protects physicians who make certain statements of sympathy, creates new expert witness standards, and makes available to the public information on disciplinary actions and judgments against physicians. The Illinois State Supreme Court has twice before struck down caps as unconstitutional, but backers are hopeful that this version will stand up. 

Illinois’ record of paying Medicaid claims is among the slowest in the nation, and many are afraid that patients are not receiving medical care as a result. While larger Medicaid providers in the state (such as large hospitals and nursing homes) are being paid reasonably quickly, doctors, pharmacists and other health care providers often are waiting up to six months to receive reimbursement. This could end up forcing some providers to limit the number of poor patients they treat.

North Carolina

A new state law lowers insurance co-pays for chiropractic treatment. The provision requires insurance companies to charge the same co-pay amounts for chiropractic treatments as they do for visits to primary care physicians. Previously, insurers treated chiropractors as specialists, meaning that co-pays were higher. Since chiropractors typically treat patients over the course of several visits, each visit requires a separate co-pay. One local chiropractor said that the new measure could help him increase business by 25 percent.


Tort reform measures passed three years ago are showing results, according to a recent study. These measures have resulted in reductions of 5 percent to 8 percent in medical liability costs. Although the state constitution prohibits caps on non-economic damages, the legislature passed reforms that banned venue shopping, required a certificate of merit, and reduced the mandatory coverage limit from $1.2 million to $1 million.

South Carolina

Although medical liability award caps were recently passed, the state may be looking to make further reforms to the tort system. A state Senate subcommittee is currently considering the value of expression of sympathy legislation, which allows physicians to apologize to patients (and their families) without those statements later being used against the physician in court. The subcommittee will address other medical liability issues in future meetings, including the use of alternative methods to resolve lawsuits and the removal of barriers that prevent the discussion of patient care among health care providers.


Podiatrists may have found a way to expand their scope of practice without going to the legislature. Although Texas law limits podiatrists to treating the foot, the Texas State Board of Podiatric Medical Examiners issued a rule in 2001 changing the definition of foot to include the ankle. On August 23, a district court judge ruled that the board did not overstep its authority in changing this definition. This means that although there has been no new legislation to expand scope of practice, podiatrists will be able to legally perform ankle surgery.


The state Insurance Commissioner has announced that Washington’s largest medical liability insurer will refund $900,000 in premiums (plus interest) to physicians due to over-billing of premiums last year. Commissioner Mike Kreidler stated that providers deserve to pay a fair price for coverage.


The state’s Supreme Court has ruled that Wisconsin’s cap on non-economic damages for medical liability awards was unconstitutional. In a 4-3 split decision, the court ruled that the cap violated the state constitution’s equal protection guarantees and that the Legislature’s rationale for implementing the caps was too broad and speculative. A poll taken after this decision showed that more than 75 percent of those responding were in favor of creating a new law to reinstate the limit on medical liability awards.

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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