AAOS Bulletin - October, 2006

In Brief

The California Supreme Court has ruled that peer-review committees are protected from lawsuits filed by disgruntled physicians. The court stated that the reviews serve an important public interest, and that lawsuits would discourage physician participation in the peer-review process. The California Medical Association disagreed, stating that this decision would make it virtually impossible for anyone to obtain compensation for an abusive peer review.

The ability to regulate the testimony of medical expert witnesses recently took a hit, when a state appeals court ruled that the law does not protect the Florida Medical Association (FMA) and its members from a defamation suit filed by an expert witness under review. The court held that state and federal immunity statutes do not clearly state that expert testimony should be subject to peer review. Supporters of the FMA noted that this kind of review is needed to protect the health system from unsound medical judgments and to help prevent frivolous lawsuits.

Unlike Florida, a court in Kansas recently ruled that complaints about questionable medical testimony filed through a specialty society grievance program are immune from lawsuits. The court determined that such a process is a professional review action under the federal Health Care Quality Improvement Act, and is therefore protected.

A new report by Illinois’ auditor general finds serious problems in the way the state handles investigations of physicians and accusations of misconduct. According to the report, some complaints that were sent to investigators were closed without disciplinary board approval, while other complaints were never forwarded to investigators at all. In addition, the state’s Department of Financial and Professional Regulation has only two employees to monitor 1,100 cases. However, according to the consumer advocacy group Public Citizen, the Illinois medical board ranks 18th in the nation for effectiveness—up from 41st three years ago. Public Citizen defines effectiveness as the rate of serious disciplinary actions (revocations, surrenders, suspensions and probation/restrictions) per 1,000 physicians in each state.

A Blue Ribbon Commission is discussing the future of Dirigo Health, Maine’s subsidized health insurance program. Problems with the program include a lower-than-expected participation rate and funding shortages. The Blue Ribbon Commission on Dirigo Health is made up of differing parties—business owners, physicians, insurance company representatives, and laborers—but all supported Dirigo’s goal of universal coverage and stable funding.

A recently passed Maryland law that would have required large employers, such as Wal-Mart, to spend more on employee health care (resulting in less uncompensated care) was ruled invalid under federal law. U.S. District Judge J. Frederick Motz stated that the Employee Retirement Income Security Act (ERISA) preempts any state laws that relate to employee benefit plans. Although the law never actually took effect in the state, it appears to have had an impact. Since the original passage of the legislation, Wal-Mart has announced plans to offer cheaper health plans and more benefits.

Missouri recently passed a law that gives the state’s Insurance Department more control over medical liability insurance rates. The legislation gives the insurance director the ability to veto excessive, inadequate or unfair medical liability rates. Insurers are also now prohibited from raising rates by more than 15 percent, and they must base their rates on loss experience within the state, not on losses in other states. In addition, the insurance department will also now publish annual reports showing median market rates.

New Hampshire
In response to the American Medical Association’s policy of selling physician prescription data to pharmaceutical companies, New Hampshire became the first state to ban the sale of prescription drug information that identifies individual doctors. Two medical data companies have already filed suit, asking for the law to be declared unconstitutional on the grounds that it violates free speech, endangers public health and impedes research. Supporters of the law say that it protects doctor–patient privacy and prevents salespeople from improperly influencing prescription choices.

New York
After a long and protracted battle, legislation that allows patients direct access to physical therapy services has passed in New York. However, the bill does not allow for unlimited direct access. Treatment by a physical therapist can last only for 10 visits or 30 days without consulting with a physician. The therapist also must inform the patient if treatment without a physician referral is not a covered expense for third-party reimbursement.

North Carolina
In response to criticism that its medical board was not doing enough to police physicians, North Carolina passed legislation giving the state medical board new powers and options for disciplining doctors. The new powers include issuing fines and public reprimands, and placing doctors on probation—none of which was previously allowed.

In response to a significant number of health care challenges facing the state—including a large number of uninsured residents and a growing shortage of healthcare professionals—Gov. Tim Kaine (D) has established a Commission on Health Reform to develop ways to improve health care. The Commission will include lawmakers, consumer advocates and health care leaders, and will hold public meetings to solicit public participation.

This roundup was prepared by Bruce Allain, JD, a legislative analyst in the government relations department. He can be reached at allain@aaos.org

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