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AAOS Now

Published 1/1/2007

State legislatures act on tort reform, POPTS, prompt payment

Tort reform

Although Florida’s constitution was amended to limit attorney fees in malpractice cases, lawyers have been asking clients to sign agreements that waived these guarantees. In response, the Florida Medical Association will issue physicians a waiver form asking patients to agree not to sue for more than $250,000 in noneconomic damages if anything goes wrong.

In Illinois, caps on noneconomic damage awards passed last year are now being challenged. The suit claims that the caps are unconstitutional because they supposedly infringe on the judiciary’s power to award damages, violate due process and violate equal protection rights. The Illinois State Medical Society has issued a statement standing by the constitutionality of the reforms, and noting the urgent need to preserve them.

Louisiana’s medical liability cap, originally passed in 1975, has been struck down as unconstitutional by a Louisiana court of appeals. The court determined that the $500,000 limit on medical liability awards has been eroded by inflation and no longer provides adequate legal remedy to certain victims. According to evidence presented in the case, the $500,000 cap from 1975 is worth less than $160,000 in today’s dollars. The court has sent two medical liability cases back to lower courts to determine an adequate compensation for the victorious plaintiffs.

New Jersey has mailed out checks totaling nearly $16 million to almost 1,300 doctors to help them pay medical malpractice insurance premiums. Physicians in groups most often targeted by malpractice suits will receive the money to encourage them to continue working in the state.

Pennsylvania Gov. Ed Rendell (D) has signed legislation that will extend a state program to subsidize physician’s payments to the Medical Care Availability and Reduction of Error (MCARE) Fund, a state-run excess malpractice fund. The new law also broadens the definition of who can have their MCARE assessments fully refunded to include physicians who provide emergency care (orthopaedic surgeons already were receiving a 100% abatement of their assessments).

West Virginia’s malpractice insurers are reporting gigantic profits. From 2001 to 2005, the annual number of lawsuits dropped from 379 to 193. A recent report from the state insurance commission shows that professional liability insurers are now collecting more than twice as much as they are spending in the state.

Wyoming’s medical review panels have heard only four cases. Even the one case that the panel felt was meritless still proceeded to court. In 17 other cases, parties waived the right to use the panel. Given the limited effect, the Wyoming Medical Society has questioned the purpose these panels actually serve in the overall liability environment.

Physician-owned physical therapy

In Alabama, the right of physicians to employ physical therapists came under attack when the state’s physical therapy board sought a regulatory change allowing it to discipline physical therapists who accept referrals from employing physicians. By unanimous vote, though, a legislative committee killed the proposed action. The committee heard testimony that accused physicians of being unethical due to their relationships with some therapists. The state medical association took strong exception to any insinuation that physicians are acting improperly and not in the best interest of their patients.

A Kentucky Court of Appeals will decide if a physician can use CPT codes associated with physical therapy to bill for services not provided by a physical therapist. Previously, a lower court ruled against the Kentucky Board of Physical Therapy, refusing to grant a permanent injunction that would have prevented an orthopaedic surgeon from using the codes. Kentucky’s medical association stated that physical therapist laws were not intended to prevent physicians from using the term “physical therapy,” and should not prevent physicians from providing physical therapy to their patients.

The long-awaited South Carolina Supreme Court ruling regarding physician employment of physical therapists has been handed down, with the court stating that the South Carolina Physical Therapist Board can discipline therapists employed by physicians who refer patients to them. A petition for rehearing the case was denied. In a related development, the American Physical Therapy Association (APTA) has announced that they will expand efforts to fight against physician employment of physical therapists. APTA is now referring to physician employment of physical therapists as “referral for profit.”

Prompt payment

A Florida court is allowing a physician group to sue Humana and Blue Cross Blue Shield over claims that the physicians were not paid promptly. Another decision upheld the right of an orthopaedic surgeon to sue over not being properly paid for providing out-of-network services. This case will allow doctors treating patients in emergency settings without a managed care contract to sue the insurer for payment of the usual and customary fees of the physicians, not what the insurer claims is usual and customary for the area.

Universal coverage

California Gov. Arnold Schwarzenegger (R) vetoed legislation that would have abolished private insurers and made California the only state to offer all its residents government-operated health insurance. The governor opposes single-payer and government-run health care systems and has hired two consultants, one Democrat and one Republican, to help draft a plan for dealing with health care costs and the state’s 6 million uninsured.

A New Mexico state committee has identified three models for universal health coverage for further study. One model would create a government-subsidized, market-based system; another would build on the current public-private system, and the third model would create a single plan administered by a commission appointed by the governor. The state will next examine the potential costs of each model, and draft recommendations. About 20 percent of the state’s population is uninsured.

In Oregon, a commission of health care professionals and elected officials has approved a universal coverage plan for state residents. The plan will be written as legislation to be introduced this year. Details of the plan remain to be completed, but coverage would be paid for by a combination of public funds and contributions from employers and employees. Health insurers would have to compete for patients and would have to offer certain minimum benefits. Tax-free health savings accounts would also be established to help residents pay for additional coverage.

The Utah Health Department has unveiled a new plan to help working individuals pay their health insurance costs by having the state subsidize these costs. The program focuses on full-time workers who would be eligible for insurance if they could afford the premium. Almost 60 percent of uninsured state residents claim that the cost of coverage prevents them from getting insurance.