STATE BOARD OF MEDICAL EXAMINERS HEARING MEDICAL LIABILITY INSURANCE COVERAGE FEBRUARY 19, 2004
The Medical Society of New Jersey has petitioned the New Jersey State Board of Medical Examiners to lower the mandated medical liability coverage limits of $1million/$3million. The SBME has scheduled a hearing for Thursday, February 19, 2004 at the Ramada Inn East Brunswick, 195 Route 18 South, East Brunswick. The time of the hearing is 10:00 a.m. - 5:00 p.m.
A good turn out is needed from the physician community. Requests to speak should be addressed to Mr. William Roeder, Executive Director, SBME, PO Box 183, Trenton, NJ 08625 and must be received one week prior to the hearing. Presentation times will be assigned by the SBME. Those who do not pre-register to speak will be given the opportunity to speak if time permits. Written comments are also encouraged and should be sent to Mr. Roeder by February 19, 2004.
MCMS will arrange for transportation if a sufficient number of members respond that they will be attending. If you plan on attending the hearing, please call the Society office, (973) 539-8888.
Healthcare In Crisis !!!
June 2003
Dear Patient:
Physicians are frustrated and fearful of losing their ability to practice in New Jersey. We have been telling Trenton about the effects of soaring medical liability insurance premiums, but the General Assembly Democrats and the Administration turn their backs on us. Their inaction jeopardizes your healthcare!
Over the last two years, insurers have sharply raised their rates for ALL physicians, anywhere from 75% - 200% — or more!!! High premiums have already cause New Jersey to lose more than 25% of its obstetricians and neurosurgeons. Many more physicians are retiring early, moving out of state or dropping specialties. Access to care is being threatened; not only to your current doctor, but also to specialists that you or your family may need in the future.
Physicians can’t pass along insurance increases because of managed care and government restrictions. With staff salaries, benefits and other overhead also rising, it is increasingly difficult to meet financial requirements of a practice.
Juries are giving larger awards, which lead to increasing settlements and higher premiums. In 2002, the average New Jersey jury award was more than $930,000. About 70% of jury awards and settlements are for non-economic (pain and suffering) damages. The plaintiff’s attorney usually receives more than half of the total award in fees and expenses!
The Senate has passed a bill that allows a plaintiff to receive up to $1 million in jury awards for pain and suffering. Economic damages, which pay for healthcare costs, lost wages or potential earnings, would remain unlimited. This bill contains other reforms that weed out frivolous lawsuits and improve patient safety to stabilize an out-of-control system.
The Assembly wants to give partial subsidies to certain “high-risk” physicians who receive large premium increases. This approach does nothing to address the cause of the crisis and only benefits a few physicians.
Physicians are rallying in Trenton and will continue to ask legislators to do the right things for our healthcare system. But We Need Your Help!
Please call 1-877-KEEP MDS.
Tell your Assembly representative to pass the Senate Version of A-50 because you want your doctor to take care of your family.
The New Jersey Assembly Banking and Insurance Committee and the New Jersey Assembly Health & Human Services Committee with hold a public hearing on Thursday, May 1, 2003 at 10:00 a.m. in Committee Room 4 of the State House Annex. Physicians are encouraged to attend the hearing.
The Committees will receive testimony on a proposal to provide medical malpractice insurance premium assistance to New Jersey physicians. Anyone wishing to present written testimony should provide twenty-five (25) copies to the committees the day of the hearing.
Should you have any questions, please feel free to call the Society office.
SAVE THIS DATE!
MAY 15, 2003
THURSDAY
MEDICAL LIABILITY REFORM STATEHOUSE RALLY
TIME: 11:00 A.M. (APPROXIMATE)
BRING YOUR PATIENTS, STAFF AND FAMILIES!!!!!
TRANSPORATION & ADDITIONAL INFORMATION TO FOLLOW
Medical Society of New Jersey
Summary of Senate Committee Substitute For
Senate Bill Nos. 2174 and 2226
Raymond Cantor, Director of Government Affairs
March 19, 2003
Cap on Non-economic Damages – The bill contains a $300,000 cap on physician/insurer non-economic damages.
Excess Liability Fund – Jury awards above $300,000 for non-economic damages will be paid by an excess liability fund up to an additional $700,000 but only up to policy limits. The fund will be capitalized between $20-$25 million annually, from a $3.00 surcharge on all employees, plus a $50.00 annual fee on most health care professionals as well as lawyers. The amount of money raised by the fund can only be changed by further legislation. The fund cannot go into debt and any claims on the fund beyond its money on hand will be divided proportionately. Administrative expenses come directly from the fund. The fund will not pay any part of an award if the health care professional exercises a right not to settle clause. The fund will not pay if an insurance company exercises “bad faith” in failing to settle a case. Bad faith is defined favorably.
Total Liability Cap – Health care professionals cannot be liable above policy limits for any non-economic damages unless they exercise a right not to settle clause.
Liability Above Policy Limits – Currently insurance companies may be forced to pay above policy limits if they could have settled a case but did not. The imposition or fear of this excess liability is a major cost driver. The bill limits an insurance company’s excess liability for non-economic damages to policy limits absent bad faith. These protections should allow insurance companies to take, or threaten to take, more factually supportable cases to trial and thus lower overall costs to the system. Similarly, a physician’s excess award liability for non-economic damages is also limited so long as the physician does not exercise any right not to settle clause.
Right Not to Settle Clauses – While the bill provides that insurance companies may offer these clauses, they also must offer policies without right to settle clauses at a discount. More significantly, if a physician exercises his right not to settle, then the liability cap and fund benefits will not protect that physician from personal liability.
Hospital and Long-term Care Facility Protections – The bill would apply the liability limits to physicians and nurses employed by these facilities. All medical professionals would get the benefit of the other protections in the bill.
Effective Date of Award Limits – The above protections will apply to all cases that have not yet gone to trial.
Statute of Limitations – The statute of limitations for all childhood injuries is reduced from 18 years plus two down to 11 years plus two. Under current law the statute of limitations is tolled (i.e. delayed in effect) until a person knew or should have known of the injury, and knew that a particular person or event caused the injury. This bill would eliminate the later test and would limit the discovery rule to only if the person knew or should have known of the injury.
Remittitur and Additur – The bill provides a judge with greater power to lower or increase a jury award. Currently awards may only be changed if the award would “shock the conscience.” The new standard is where the award is “clearly inadequate, excessive or disproportionate” based upon a jury’s passion or prejudice. This provision should allow more awards to be lowered.
Expert Witnesses – In order to serve as an expert witness or sign an affidavit of merit an expert must be of the same specialty or sub-specialty as the defendant. Exceptions are only allowed if after diligent efforts, an expert in the same specialty or sub-specialty cannot be found to offer an opinion. There are penalties and costs imposed for providing testimony not consistent with the appropriate standard of care.
Net Opinion Rule – In order to offer an opinion as an expert, the opinion must be based on the production of tangible evidence such as textbooks, treatises, or documented customs of practice. This will prevent witnesses from offering opinions of the standard of care based on their mere opinion, without supporting documentation.
Insurance Company Regulation – There are a number of provisions to ensure greater oversight of insurance companies: make sure that physicians do not pay higher premiums when they quickly are removed from suits; pass on savings; require the offering of deductibles; and ensure that conflicts of interests are avoided.
Affidavit of Non-involvement –A physician named in a suit who had nothing to do with the patient’s care may submit an affidavit to quickly be eliminated from the suit.
Patient Safety – The bill requires that health care facilities establish patient safety plans and committees to explore ways to reduce errors. Significant adverse preventable events must be reported to the state but are to be kept confidential. The self-critical analysis of errors by a health care facility is to be kept confidential.
Good Samaritan – A physician, even in a hospital, who assists in an emergency setting, is immune from liability so long as the physician received no compensation and did not have a physician-patient relationship prior to the emergency. There are additional protections for consent to emergency care in an office setting.
BME Reporting – Additional reporting to the BME will be required for pending or final actions involving certain criminal activities.
Purchasing Alliances – The bill would authorize groups of physicians to purchase liability insurance as a purchasing alliance.
Task Force – The bill establishes a task force with MSNJ representation to look at other issues relating to tort reform and reimbursements.
Testimony of Robert S. Rigolosi, MD
Medical Society of New Jersey
Before the
Senate Commerce Committee &
Senate Health, Human Services and Senior Citizens Committee
March 17, 2003
Good afternoon. I am Dr. Robert Rigolosi and I am the President of the Medical Society of New Jersey. On behalf of MSNJ I want to thank the members of both committees for the tremendous time and effort you have put into this committee substitute. I especially want to thank the Chairmen — Senators Cardinale, Baer, Vitale and Matheussen — for their leadership over the last few months of negotiations. We also want to thank Senator Lesniak for his contributions to this bill.
MSNJ received this compromise committee substitute on Friday and we have reviewed it over the last couple of days. It is a complex piece of legislation, and there are certain clarifications we seek, either through technical amendment or by way of the committee statement. Our staff has already been in touch with your staff on these matters of final detail.
Your two committees have done an excellent job in balancing interests and making tough decisions. While we did not get nearly everything we wanted, the bill contains significant reforms and patient safety provisions that should produce a very positive impact to New Jersey’s growing access-to-care problem. For this reason, the MSNJ Board of Trustees yesterday voted unanimously to support passage of this bill. We urge the members of this committee to vote in favor of its release today and for its passage in the full Senate on Thursday.
For the last year, MSNJ has stated that New Jersey would be facing a serious access to care issue if medical liability insurance rates continued to escalate at significant levels. In 2002, New Jersey saw the recent losses of 23% of its obstetricians and 24% of its neurosurgeons. Over two-thirds of physician’s practices have been impacted either by ceasing to do certain high-risk procedures, refusing to take on high-risk patients, delaying the purchase of necessary equipment, or laying off staff.
Based on anecdotal evidence, we believe these trends are continuing in 2003. Many colleagues paid major premium increases in December, while others have just received notices of significant rate hikes within the last week for April renewals. These increases rival the ones we saw in 2002.
In addition, Princeton Insurance Company was recently double downgraded. We truly fear that if this bill is not enacted soon that many more of our best physicians will give up on New Jersey. New Jersey may become an impossible state for any insurance company to do business. Of course we all fear for the long-term future of medicine in New Jersey and, of course, for the patients who need our care.
We believe that this substitute bill represents meaningful change. It will have a real and positive impact on rates, both immediate and over the long term. Passage of this bill will allow physicians to stay in practice in New Jersey and will ensure that our patients — your constituents — have access to competent medical professionals, of every specialty.
While providing reasonable and effective limitations on non-economic damages, you have also ensured that an injured person can receive adequate compensation for their injuries. While ensuring that those who have been injured will have their day in court you have also maintained physicians’ rights to defend their actions when wrongfully accused. You have made many changes that will take unnecessary costs out of the system, and should lead to the long-term betterment of medicine and the health of our 8.5 million patients.
We also applaud you for the patient safety provisions in this bill. Open, honest discussion and disclosure of medical errors is essential to prevent errors. While there are a few bad doctors whom we need to weed out and remove, the Institute of Medicine clearly states that the vast majority of errors are system errors. The best way to minimize those errors is by the establishment of a culture of safety, not a culture of blame. This committee substitute advances us down this path while at the same time ensuring that true victims of medical error can receive adequate compensation for their injuries. We will work with you into the future on additional ways to reduce errors as much as is humanly possible.
While we do not believe the current crisis is the result of insurance company price gouging or bad business investments, enhanced oversight of the medical liability insurance market will — if for nothing else —promote public confidence. This bill contains a number of provisions to accomplish that goal.
We appreciate the establishment of the medical liability task force as a vehicle to explore the need for additional change beyond the bill’s provisions. There are two items that will need to be addressed.
The first is hospital liability. While hospitals, as charitable corporate entities, receive statutory immunity above $250,000, this protection is negated by a plaintiff’s ability to sue hospital employees directly. The clear intent of the Charitable Immunity Act is to ensure the viability of hospitals and other such charitable entities, so that they can carry out their laudable function of serving the public’s health needs.
To the extent hospitals continue to be forced to pay ever-increasing liability insurance premiums, they will be unable to afford to pay for the necessary health care of their communities. Hospitals are already making difficult decisions that place the public at enhanced risk. They are becoming more hesitant to provide charitable services to the poor communities who need them most. We need to reverse these decisions.
The second is the statute of limitations for birth injuries, which needs to be shortened to seven years. Any birth-related injury should be noticeable at the time a child enters the school system. Obstetricians often will set the date they stop delivering babies based on their projected retirement age less the applicable statute of limitations. Reducing the statute to seven years will allow these professionals, in the prime of their careers, to continue to practice OB for six more years.
Once again we thank you for your patience and hard work. We now urge you, your Senate colleagues, the members and the General Assembly, and Governor McGreevey to support this legislation and to pass it as soon as possible. Together we can solve this problem and move on to improving the health care of the citizens of New Jersey. The public demands and expects nothing less.
Thank you.
March 14, 2003 - Medical Liability Reform Update
Legislative Activity MSNJ has been very busy behind the scenes working out a compromise with the Democratic and Republican leaders in the Senate. A meeting was held on Thursday, March 13, 2003 between the leadership of the Senate Commerce and the Senate Health Committees. MSNJ has not seen the actual language but believes the contents are such that it will have a favorable impact on premiums. MSNJ is working closely with the insurance community, the independent actuary, lobbying firm (Martin Bontempto Inc.), and counsel to ensure that the legislation meets the needs of the physician community and will work in the real world. The fight will continue into the next legislative term if there are additional legal changes that are necessary or helpful.
The Facts MSNJ engaged the services of a nationally renowned actuary, James Hurley of Tillinghast-Towers Perrin. MSNJ was able to have New Jersey’s two largest medical liability insurance companies, MIIX and Princeton Insurance, provide Mr. Hurley with their proprietary rate and business information. Mr. Hurley has completed his analysis of the New Jersey market, including why rates have been escalating and what impact tort reform will have. MSNJ is flying Mr. Hurley to Trenton next Wednesday to present his report at a news conference in the State House. His report will be available on-line that day. When released, this will be the first public analysis of a state’s insurance market in the nation prepared using actual insurance company data.
The General Assembly It is too early to concentrate on the Assembly, it is important to understand the obstacle that we have in that body. The Assembly has 43 Democrats, 36 Republicans and one member of the Green Party. The Speaker has recently said that his members oppose the bill being crafted in the Senate. MSNJ’s recent meeting with Democratic Majority Leader Roberts also yielded a similar response. It will take all our efforts to push for a vote in that body. Please be prepared to fight. We must stay united and act strategically. This is not the time to act alone or with more emotion than intelligence. We are close; let’s continue the focused effort.
Getting Out There One of the reasons we are beginning to win this battle is that we have the public on our side. We need to enhance and solidify this public base of support. We encourage the physician community leaders, as well as the rank and file, to contact your local community groups (e.g. Rotary, Lions Club, Deborah Hospital, Kiwanis) as well as senior groups and communities to speak at their meetings and explain our position. This face-to-face communication is a key element to swaying the public.
Continued Advocacy
This is no time to let up on our multiple advocacy efforts. While we have had over 10,000 calls made to 877-KEEP MDS, that is not nearly enough. If every physician and their spouse called, that would be 46,000 calls. If their office employees called, the number would be over 100,000. If they enlisted their patients we would have tort reform by now. This cannot be a fight won in your spare time or won by only a fraction of the physicians. We need a strong commitment to advocacy and action by a large percent of the medical community. Legislators opposed to us know the numbers well. Let’s involve all our colleagues.
We also need more support for contributions to our political action fund MedAC. Money talks louder then bodies in Trenton and we need lots of money to have an impact. Please make a generous contribution soon. Lawyers understand that political contributions are a cost of doing business. So should you. Besides MedAC, we will be asking physicians to donate to various campaigns of our legislative supporters. This is the time for the medical community to step forward and be a major political player.
More Phone Calls Please call the members of the committees to ask them to work with MSNJ to resolve the issues. Their names and numbers are:
Senate Health, Human Services and Senior Citizens Committee
Sen. John J. Matheussen – Phone: 856-228-8552, Fax: 856-228-1925
Email: SenMatheussen@njleg.org
Sen. Joseph F. Vitale – Phone: 732-855-7441, Fax: 732-855-7558
Email: SenVitale@njleg.org
Sen. Ronald L. Rice – Phone: 973-371-5665, Fax: 973-371-6738
Email: SenRice@njleg.org
Sen. Barbara Buono – Phone: 732-819-8141, Fax: 732-819-8204
Email: SenBuono@njleg.org
Sen. Diane B. Allen - Phone: 609-239-2800, Fax: 609-239-2673
Email: SenAllen@njleg.org
Sen. Robert W. Singer – Phone: 732-901-0702, Fax: 732-901-0587
Email: SenSinger@njleg.org
Peter A. Inverso - Phone: (609) 586-1330, Fax: (609) 586-1906
Email: SenInverso@njleg.org
Raymond J. Lesniak – Phone: (908) 624-0880, Fax: (908) 624-0587
Email: SenLesniak@njleg.org
Robert W. Singer – Phone: (732) 901-0702, Fax: (732) 901-0587
Email: SenSinger@njleg.org
HR5 and Congress HR5 passed the House on March 13, 2003 by a vote of 229 to 196. The outcome in the Senate is more uncertain. MSNJ is working with the AMA to encourage our Congressmen to vote for caps and tort reform on the national level but we believe the major push needs to be at the state level. Please call Senators Corzine and Lautenberg and urge them to support their Democratic colleague, Dianne Feinstein from California in her efforts to sponsor a MICRA style bill on the federal level. She is looking for 10 of her Democratic colleagues to support her. Please take the time to contact our Senators on this matter.
Senator Jon S. Corzine
Washington, DC 20510
202-224-4744
Fax 202-228-2197
Senator Frank Lautenberg
Hart Senate Office Building
Suite 825-A
Washington, DC 20510
202-224-3224
Fax 202-228-4054
Ray Cantor, MSNJ Director of Governmental Affairs, has prepared this information.
John Shaffer, Director of Communication at Medical Society of New Jersey, has supplied this information.
