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Medical Tort Reform: A Novel Approach
Chris R. Hancock, MD Medical
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The views that the author expresses in this article are strictly their own and should not be attributed to the American College of Radiology.
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Reprinted with permission from JACR
Volume 3, Issue 11, Pages 825-896 (November 2006)
Medical Tort Reform: A Novel Approach
Chris R. Hancock, MD Medical
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Medical liability tort reform has been a priority of many medical organizations
for decades. However, the past several years have shown an escalation in
the number of states experiencing crisis; thus, a new impetus for a
solution is upon us. Multimillion dollar payouts for idiopathic disease
states, medical noncompliance, and a lack of personal responsibility for
one's health have led to the origin of the innovative field of defensive
medicine. Defensive medicine, with its associated increased utilization
of medical imaging, is not sustainable and is in direct conflict with
the ACR Appropriateness Criteria®. The continued overutilization of
medical imaging services as a result of defensive medicine and
self-referral will ultimately "break the bank." This situation, with the
plethora of other problems currently plaguing medicine, could
conceivably bring about a nationalized health care system that is even
more onerous to deal with than the Centers for Medicare and Medicaid
Services, HMOs, and preferred provider organizations. Medical tort
reform is therefore a cornerstone to maintaining a healthy environment
for radiology and preserving our patients' futures. Amendment 3 in
Florida represents one novel approach to tort reform. This pioneering
and innovative measure, along with the trial-lawyer-sponsored Amendments
7 and 8, is highlighted in this discussion.
Meaningful health care tort
reform has eluded the American populace at a national level. Many bills
have come before Congress, including House Resolution Bill 5, the Help
Efficient Accessible, Low- Cost, Timely Healthcare Act of 2005; the
recently defeated 2006 Senate Bill 22, the Medical Care Access and
Protection Act; and Senate Bill 23, the Healthy Mothers and Healthy
Babies Access to Care Act. Historically, several states have attempted
medical tort reform, with few successes and many failures. One of the
gold standards of medical tort reform is the much publicized 1975
California Medical Injury Compensation Reform Act (MICRA), with a
$250,000 cap on noneconomic damages. MICRA in California has proved
effective by keeping premiums for medical malpractice at bay, resulting
in premiums that are 44% lower for physicians in California [1]. Even
though California currently serves as a model of medical tort reform,
the California State Legislature has failed to promote the legislation
in the Senate, and many members have suggested revising MICRA by
increasing the award limit substantially. A measure similar to MICRA
passed in Texas, House Resolution 4 of 2003, has achieved some
significant positive changes in the medical liability arena through
reduced premiums, a 5% increase in the number of Texan physicians, 15
new entrants into the medical malpractice insurance market, and the
expansion of high-risk procedural coverage [2,3]. Until the recent
passage of Amendment 3, Florida has consistently been a prime example of
failure in the medical tort reform arena.
Multiple previous attempts at
significant tort reform in Florida have been made, including requests to
the state leadership for limits on noneconomic damages, sovereign
immunity for academic institutions, and legislative protection for
high-risk procedures. For many years, these attempts have fallen on deaf
ears. The Florida state legislature is highly influenced by trial
lawyers, and dissenting opinions have traditionally been met with
intimidation and opposition. A variety of approaches were proposed at
the annual meeting of the Florida Medical Association (FMA), discussed,
and debated vigorously. The general consensus was that any future
proposal to the legislature would likely be met with defeat given the
history of attempted medical tort reform in the state. Ultimately, it
was decided to defer to democratic principle: the citizens of Florida
would be given the opportunity to decide the fate of medical liability
reform by direct vote on a constitutional amendment.
Thus, Amendment 3
was born. Amendment 3 in Florida was the innovation of the FMA, in
association with the county medical associations (CMAs) of Florida and
the American Medical Association (AMA). Two key points were addressed.
First, trial lawyers could not charge more than 30% of the first
$250,000 of an award, and second, not more than 10% of the remainder of
the award could be collected as their contingency fee. Proponents of
this amendment maintained that the current incentive- based attorney fee
of 40% plus "customary fees" afforded trial lawyers did not represent
altruistic legal council but rather blatant greed, which allowed these
lawyers to secure the lion's share of awards allocated via settlements
or trials. The amendment was constructed to conform to a graded increase
in professional reimbursement for the plaintiff trial lawyers, thus
ensuring that credible malpractice cases could still be pursued.
Proponents of this approach determined that the amendment should be
placed on the upcoming general election ballot of 2004. However, to
achieve this goal, a large percentage of the state populace needed to
sign a petition to place the amendment on the ballot.
As Amendment 3 was
publicized, the trial lawyers criticized it. They countered that
clearing only an estimated $150,000 plus attorney costs on a $1 million
case was not financially feasible for them. Interestingly, it was the
Florida Bar Association that originally petitioned the Florida Supreme
Court to construct a contingency fee plan for up to 40% of attorney
contingency fees plus customary expenses [4,5]. They felt that $400,000
plus customary fees on a $1 million judgment was appropriate [4]. Most
important, it was not the citizens of Florida who decided on this
percentage, nor the elected state legislature, but rather the Florida
Supreme Court on June 30, 1986, in response to this petition from the
Florida Bar Association [5]. The trial lawyers threatened not only a
marketing campaign war of astounding proportions if Amendment 3 was
placed on the general election ballot but also the initiation of 3 of
their own amendments. The 3 proposed amendments limited physicians' fees
to Medicare reimbursement rates, revoked a medical license after 3 trial
defeats ("3 strikes and you're out"), and threatened public access to
the results of peer review activities as well as morbidity and mortality
conferences. The FMA, CMAs, and AMA were not intimidated and continued
in their preparatory efforts. The trial lawyers spent more than $27
million publicizing their views during months of signature gathering,
high-profile court battles, and bitter media conflict to defeat
Amendment 3 and to place 2 of the above-mentioned amendments on the
ballot (open access to peer review and 3 strikes) [6,7]. Known as
Amendments 7 and 8, these would grant free access to peer review and
morbidity and mortality conferences and provide for the immediate
revocation of a medical license if a physician lost 3 medial liability
lawsuits, regardless of the nature or merit of the cases.
In retaliation
to both the lawyers' efforts and years of perceived abuse, the FMA, AMA,
and CMAs bonded together and formed Citizens for a Fair Share, an
association that ultimately organized and executed the plan of action.
Through careful, thoughtful planning and unification, we initiated our
own petition signature drive, ballot placement, and campaign media blitz
and manned the voting centers in droves to combat our rivals. Citizens
for a Fair Share raised less than $7 million, a small fraction of the
funds the trial lawyers had put forth, and yet the citizens of Florida
overwhelmingly voted for Amendment 3. Amendments 7 and 8 were also,
unfortunately, passed into law. These amendments, however, were later
appropriately interpreted by Senate Bills 938 and 940, respectively,
requiring that peer review immunity laws be maintained and that a trial
lawsuit against a defendant be reviewed by the Florida Board of Medicine
before the allocation of a malpractice strike due to the loss of a trial
case. These amendments were then signed into law by the governor. The
trial lawyers, of course, are trying to influence the legislature to
weaken these bills. One bill, SJR 1918, was initiated by the trial
lawyers to remove Amendment 3 from the constitution, classifying it as a
statute that could subsequently be argued as unconstitutional. This bill
was defeated through support and pressure from organized medicine. Some
trial lawyers have even gone so far as to suggest keeping a larger
portion of monetary awards by requiring clients to sign away their
constitutional rights to fair shares of awards, in lieu of Amendment 3
[8].
Amendment 3 in Florida is only one novel approach to medical tort
reform, which is still in its infancy. Although the effects of Amendment
3 remain to be seen, there is hope that it will decrease health care
costs by reducing defensive medicine tactics and lower medical
malpractice insurance premiums. Effective medical tort reform will
enable high-risk procedures to be performed and emergency surgical
coverage to be present. Reduction in medical liability insurance
premiums will ultimately translate into decreased health care costs, in
turn preserving patient access to affordable health care. This ongoing
saga of medical tort reform exemplifies the need for us as physicians to
continue ensuring health care access and thus better serve our patients.
The AMA, the FMA, CMAs, the American Medical Political Action Committee,
the ACR's Radiology Advocacy Alliance Political Action Committee,
specialty medical societies (the ACR and others), and Internet
organizations such as Overlawyered and Trial Lawyers Inc. have been and
will continue to be the stalwarts of medical tort reform. Joining your
medical societies, contributing to your political action committees, and
being actively involved in medical tort reform is imperative for the
future of radiology in America. Please join now if you are not already a
member of these organizations and become as active as time permits, and
together we will achieve meaningful medical tort reform.
REFERENCES
- Hamm WG, Wazzan CP, Frech HE III. MICRA and access to healthcare:
California's MICRA reforms: increasing the cap on noneconomic damages
would increase the cost of, and reduce access to, healthcare.
Sacramento, Calif: The Coalition to Protect MICRA; February 2005.
Available at: http://www.micra.org/MICRAStudy22805.pdf.
- Anderson RE.
Legal reform summit: medical liability reform in the United States.
Napa, Calif: The Doctors Company; August 26, 2005. Available at:
http://www.thedoctors.com/pdf/riskmanagement/legalreformsummit10-05.pdf.
- Kaminski JL. Medical malpractice—impact
of Texas liability limits (OLR Research Report 2004-R-0918). Hartford,
Conn: Connecticut General Assembly, Office of Legislative Research;
December 6, 2004. Available at: http://www.cga.ct.gov/2004/rpt/2004-R-0918.htm.
- The Florida Bar. Rule 4-1.5:
fees and costs for legal services. Available at: http://www.floridabar.org/divexe/rrtfb.nsf/FV/A8644F215162F9DE85257164004C0429.
- The Florida Bar. Tort reform—contingency fees. Tallahassee, Fla: The
Florida Bar; October 2001. Available at: http://www.floridabar.org/divcom/pi/bips2001.nsf/1119bd38ae090a748525676f0053b606/fb604fc14735e8338525669e004e0645?OpenDocument.
- Knight J. What you need to know about Amendments 3, 7, and 8. Fla Med
Assoc Q J 2005. Available at: http://www.fmaonline.org/pubs/quarterly/jan05_feature4.asp.
- Katopodis J. What's next? Fla
Med Assoc Q J 2005. Available at: http://www.fmaonline.org/pubs/quarterly/july05_middle.asp.
- Florida Medical Association.
Supreme Court issues order relating to Amendment 3. Tallahassee, Fla:
Florida Medical Association; December 15, 2005. Available at:
http://www. fmaonline.org/sc_amend3.asp.
Chris R. Hancock, MD,
University of Miami, Department of Radiology,
1611 NW 12th Avenue,
Miami, FL 33139
e-mail: chancock50@gmail.com.
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