Pa. Governor Unveils Med-Mal Liability Reform Plan

June 10, 2003

Pennsylvania Governor Edward G. Rendell has released details for a proposed series of immediate and long-term measures to reform Pennsylvania’s medical malpractice liability system.

The press bulletin called the Governor’s proposal “a comprehensive solution to the current crisis developed after months of research and study on this national crisis.” It is based on recommendations of the Task Force on Medical Malpractice.

“The medical malpractice problem is a complex one that has confronted Pennsylvania policymakers for nearly 30 years,” Rendell indicated. “At the heart of the problem is a system where medical errors occur, and those errors lead to lawsuits. This plan addresses the myriad of challenging issues by proposing a combination of realistic and achievable solutions.

“I want the public to know that we’re proposing solutions that should keep physicians in Pennsylvania,” he continued. “If nothing is done, the cost of malpractice insurance will continue to rise, and retention and recruitment of physicians will become a greater problem. That will, in turn, translate into a problem for Pennsylvanians who find it more difficult to find a physician, hospital or trauma center and to access the high level of medical care that they are accustomed to receiving.”

The announcement said, “Governor Rendell will work with the state legislature to implement real change in the system by helping physicians with the cost of medical malpractice coverage for the next three years through state payments of Medical Care Availability and Reduction of Error (MCARE) premiums, as well as implementing patient safety initiatives, along with tort reforms and insurance reforms.”

It described the specific reforms outlined in the report as follows:
Patient Safety Initiatives
— A significant portion of malpractice awards involve a small number of doctors. The Pennsylvania Board of Medicine and other health care licensing boards must be strengthened so they can remove licenses of physicians who are proven to be a danger to patients.
— Pennsylvania has a nationally recognized Council (the Pennsylvania Health Care Cost Containment Council) that collects data on medical errors and avoidable hospital complications. Hospitals need to use this data to eliminate systemic medical errors.
— Consumers need to make informed decisions about their medical choices. The state will make patient safety information available on the web so that consumers can make informed decisions.
— Pennsylvania’s hospital regulations are more than 20 years old. Hospitals have changed dramatically. We need hospital regulations that help the hospitals to implement best practices in patient safety and to minimize avoidable errors.

Tort Reforms – Pennsylvania has already taken strong action to provide relief to the present medical malpractice problems. Last year, at the urging of physicians, the General Assembly passed Act 13, which is a solid foundation for the reforms that Governor Rendell supports. The Governor’s plan builds on this foundation:
— By giving judges greater power to reduce unjustified jury awards.
— The present standard for a judge to grant a motion for remittitur is “the award is so excessive and unconscionable as to shock the conscience of the court.”
— The proposed new standard would allow granting of the motion if ‘the award deviates materially from what would be considered reasonable compensation.’
— In addition, the Governor will ask the Pennsylvania Supreme Court to adopt rules that would:
— Provide judges with non-binding guidelines to use when considering the reasonableness of awards for non-economic damages, such as pain and suffering.
— Limit attorneys’ contingency fees.
— Establish timeframes for medical malpractice cases. It takes a medical malpractice case in Pennsylvania a year longer to be resolved than the national average. Victims of medical malpractice should not have to wait over five years to receive compensation for lost wages and medical bills.
–Offer voluntary mediation in medical malpractice cases

Insurance Reforms: In 1998, the General Assembly changed the law so that commercial insurance with premiums of $25,000 or more no longer had to be approved by the Insurance Department. Unfortunately, this includes most medical malpractice insurance policies.
— Consequently, the Governor is asking the General Assembly to return authority to the Insurance Commissioner to regulate medical malpractice rates.
— The Governor also will ask to limit the amount insurers can deviate from the approved rate for individual characteristics of the insured.

Provider Reimbursement: One part of the medical malpractice problem is the inability of physicians to pass on any increased costs because of static reimbursement from health care plans and the Medical Assistance Program. Particularly hard hit have been obstetricians and trauma centers. The Governor is asking the General Assembly to:
— Increase the Medicaid reimbursement to obstetricians for delivering babies from $1,000 to $1,500.
— Provide $25 million a year in additional funds to Pennsylvania’s trauma centers.
— Require the Department of Health to review the way managed care plans set reimbursement rates to determine if they factor in adverse economic influences, such as the increases in medical malpractice insurance costs.

“Because of the length of time it takes lawsuits to move through the legal system, it will take a few years before the comprehensive reforms of 2002 and 2003 will translate into greater availability and affordability of medical malpractice insurance,” the bulletin continued. “Because of that, the Governor is proposing immediate financial relief for Pennsylvania’s physicians.”

It indicated that “The only piece of the dramatic increases in premium costs that the State has any control over is the MCARE premium — the $500,000 to $1 million worth of insurance coverage physicians buy from the state fund,” and the Governor’s plan described the following action to address the problem: “The four specialists with the highest malpractice costs (practicing surgeons, obstetricians, orthopedic surgeons and neurosurgeons), the state will pay all of their MCARE assessment and 50 percent for all other physicians. This means for some physicians their total malpractice insurance costs will be less than they paid last year, and some physicians will be paying total malpractice costs below the national average. This 100% and 50% abatement will continue at the same level for at least three years (2003-2005).”

The bulletin noted that “Governor Rendell said he has discussed the MCARE assessment with legislative leadership and will work with the General Assembly throughout the budget process to make the final decisions on the long-term funding which will pay the cost of the abatement.”

“To significantly impact our current medical malpractice situation, we will need the support of the General Assembly, the Pennsylvania Supreme Court, state government, the hospitals, the physicians, insurance companies, the Patient Safety Authority, and the PHC4 to take the actions proposed in my plan,” Governor Rendell stressed. “If we all do our part, we can make Pennsylvania’s hospitals the safest in the country and reduce the medical malpractice burden on our physicians, hospitals and nursing homes.”

Complete information on the Governor’s proposals is available at the Governor’s Office of Health Care Reform’s Website at

Responding to the Governor’s proposals, Hospital & Healthsystem Association of Pennsylvania (HAP) President and CEO Carolyn F. Scanlan stated: “The plan released today adds the Governor’s voice to the ongoing debate over medical liability reform in Pennsylvania. We hope that the Governor and the General Assembly will work toward providing Pennsylvania’s hospitals with meaningful short-term economic relief and long-term reforms-including a constitutional amendment that would allow Pennsylvania’s voters to decide on reasonable limits on non-economic damages – in time for the summer legislative recess.”

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