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Pennsylvania’s 2002 comprehensive malpractice reform legislation is a model for states to consider, according to a 2002 paper by National Academy for State Health Policy (NASHP) senior analyst Mimi Marchev.
What she didn’t know at the time was that in the spring of 2003, many Pennsylvania physicians closed their offices for five days to protest what they found was the still-unacceptable malpractice insurance situation in the state and a continuing need for caps on noneconomic damages. Ms. Marchev said the Pennsylvania legislation included reforms aimed at the legal system, the insurance industry, and patient safety.
"This inclusive approach provoked intense lobbying," she said, "and each side in the dynamic debate had to compromise cherished positions."
The law gave tort reform proponents a cap on punitive damages, a change in the collateral source rule so that patients are prohibited from collecting damages on medical expenses already paid by health insurance companies, and the possibility of periodic payment of future medical expenses exceeding $100,000.
It also allows a judge to consider the effect a large verdict would have on the availability or access to a physician or health care in the community when a request is made to lower a verdict. Strict qualifications for expert witnesses were established. A cap on noneconomic damages was dropped from the final bill. A controversial provision abolishing joint and several liability was initially included but then dropped from the final bill. Six months later, the state’s General Assembly passed a separate bill that abolished joint and several liability.
The new law lowered the amount of mandatory professional liability coverage from $1.2 million to $1 million and limited an insurer’s liability to the coverage limits of the policy. An ability to cancel policies was reinstated. A joint underwriting association was established to offer coverage to physicians and health care workers who are unable to obtain private coverage.
Provisions in the law designed to limit litigation and reduce or stabilize insurance rates are counterbalanced with wide-ranging patient safety requirements. Physicians, other health care workers, and medical facilities in Pennsylvania are required by the new law to report serious events and incidents to a newly established Patient Safety Authority, which is to contract with an outside agency to analyze the reports and make recommendations to improve patient safety.
Patients affected by a serious event in a medical facility are to be given a written notice of the event. Physicians and licensed health care workers are to inform their licensing boards of any complaints or disciplinary or legal action against them, and the state medical board has enforcement authority to conduct independent investigations. But within a year of passage of this comprehensive reform, a study funded by the Pew Charitable Trust said that medical malpractice was back in the headlines in Pennsylvania, with physician and hospitals complaining of a "crisis of availability and affordability" of malpractice insurance.
The study noted that in the late 1990s, four major carriers serving Pennsylvania failed, including the state’s largest. Other private insurers partly filled in, but more hospitals and physicians had to turn to risk-retention groups and other alternative mechanisms as well as the Joint Underwriting Association, a costly insurer of last resort.
(To see the NASHP report, go to: www.nashp.org.)