Discussion 10.2: Tort Reform

HA4050D – Healthcare Law

Discussion 10.2: Tort Reform

A very contentious issue for many years has been tort reform. Before this discussion, investigate both sides of the issue. First, go to the website maintained by the American Tort Reform Association and consider their arguments for tort reform. Then, visit the website of the American Association for Justice (formerly the American Trial Lawyers’ Association) and see what arguments they have stated opposing tort reform. (You may have to search the website for various articles on the subject.)  Be sure to review Chapter 5 of the textbook. You are also encouraged to find your own additional sources on this issue and to critically evaluate the arguments.

Then, we will debate the following related issues:

1.Does tort reform reduce malpractice insurance rates and bring down health care costs for consumers? Is it worthwhile?

2.Is capping damage awards fair and effective? Would the good outweigh any negative effects, such as reducing incentives to have careful risk management or disadvantaging worthy plaintiffs who have suffered large non-economic losses?

Legal Aspects of Healthcare Administration 13th Pozgar 2019 Jones & Bartlett-Vitalsource Bookself-username-crtshhill49@yahoo.com-Password-#magicMAN61

Chapter 5

Tort Reform

and

Risk Reduction

Learning Objectives
Describe the meaning of defensive medicine.
Describe various tort reform programs designed to lower the cost of malpractice insurance.
Describe the various ways to manage and reduce the number of malpractice claims.

Tort Reform
The tort system is inadequate to prevent medical malpractice.
Damage awards as deterrents have failed.
Exorbitant jury awards and malpractice insurance premiums cost billions of dollars annually.
State legislatures call for reform.

Physician Practice
Defensive Medicine
Undertreatment
Avoiding high-risk tests and procedures
Overtreatment
Excessive use of diagnostic tests

Tort Reform Schemes
Mediation and Arbitration
Statute of Limitations
Structured Awards
Medical Malpractice Screening Panels
Collateral Source Rule
Contingency Fee Limitations

Tort Reform Schemes (cont’d)
Countersuits: Frivolous Claims
Joint and Several Liability
Malpractice caps
No-Fault System

Tort Reform Schemes (cont’d)
Regulations of insurance practices
Statutes of limitations
Reducing the Risks of Malpractice
Risk management
Performance Improvement
Continuous quality improvement (CQI)
Peer review

Collaboration
Tort Reform
A concerted effort must be made to include all health professionals in the process of tort reform.
The present system of punishment for all because of the inadequacies of the few has proven to be costly and far from effective.
The key to improving quality and controlling costs is cooperation, not alienation.
Policymakers have failed in this arena and must return to a commonsense approach to policy development by including those who are most directly involved.

Review Questions
Describe various tort reform programs designed to lower the cost of malpractice insurance. Should there be limits placed on malpractice awards? Support your opinion.
Discuss what a structured award is and how it might reduce the costs associated with large-sum malpractice awards.

Review Questions (cont’d)
Discuss which of the schemes for tort reform discussed previously you consider most helpful in addressing the malpractice insurance crisis.
Describe how risk management, performance improvement, and peer review can be helpful in improving patient care and reducing the number of malpractice claims.

Chapter 21

Professional Liability Insurance

Learning Objectives
Describe the purpose of an insurance policy, including risk categories, and the importance of professionals to carry professional liability insurance.
Explain the elements and conditions of an insurance policy.
Describe the investigation and settlement of claims.

Insurance
A contract that creates legal obligations on the part of both the insured and insurer.
The insurer agrees to assume certain risks of the insured for consideration or payment of a premium.
Under terms of an insurance policy, the insurer promises to pay a specific amount of money if a specified event takes place.

Insurance Policies
Necessary Elements
Identification of Risks Covered
Specific Amount Payable
Specified Occurrence

Insurance Policies
Risk Categories
Property Loss or Damage
Personal Injury or Loss of Life
Legal Liability Risk

Telemedicine
Can Involve Misdiagnosis
Healthcare providers should confirm their policies adequately telemedicine services.
Obtain written verification of such coverage from the insurer.

Insurance Policy Provisions
Policy Period
Defense & Settlement
Settlements & Awards
Coverage: Amount Payable
Punitive Damages

Conditions of Insurance Policies
1. Notice of Occurrence
2. Notice of Claim
3. Assistance of the Insured
4. Other Insurance
5. Umbrella Insurance

Conditions of Insurance Policies
5. Assignment
6. Subrogation
7. Changes
8. Cancellation

Liability of the Professional
News: $44M Paid in Nurse Practitioner Liability Claims Over Past 5 Years: Report
All Professionals Need Insurance.
Purpose of liability insurance is to spread risk of economic loss among members of a group who share common risks.
As risks increase, premiums increase to cover associated risks.
Premiums are placed in a shared risk fund from which funds are drawn to cover costs of lawsuits.

Liability of the Professional cont’d
Insurance coverage is especially important for
Volunteer at a clinic or health fair not sponsored by his or her employer.
Independent Contractor providing a service in a patient’s home for an independent agency or registry.
Organization covered by an insurance policy that has an exclusionary provision by which the insurance company disclaims liability for a professional’s malpractice actions brought against the insured organization.

Liability of the Professional, cont’d
Advanced Practice Nurse Practitioner
Registered Nurse
Private Duty Nurse
Students

Intentional Tort: Coverage Denied
No duty to cover intentional torts
Therapist’s sexual affair with patient
Sexual assault

Medical Liability Insurance
Covers
Individuals
Healthcare institutions
Outpatient facilities and clinics

Medical Liability Insurance (cont’d)
Insuring clause provides payment on behalf of insured if an injury arises from:
Malpractice, error, or mistake
Acts or omissions on the part of the insured during policy period

Medical Liability Insurance (cont’d)
Varies according to policy
Common risks covered
Negligence
Assault and battery as a result of failing to obtain consent
Libel and slander
Invasion of privacy for betrayal of professional confidence

Self-Insurance
Healthcare facility self-insures its malpractice risks.
Organizations should consult legal counsel before self-insuring.

Trustee Coverage
Coverage provided by organization.
Helpful in attracting qualified board board members.
For coverage to be effective.
Trustee must have acted in good faith within the scope of his or her responsibilities.

Trustee Coverage (cont’d)
Coverage for board members should include
Counsel Fees & Expenses
Judgments
Fines & Penalties
Coverage that extends to actions taken while in office or thereafter

Mandated Medical Staff Coverage
Malpractice Insurance
Right to require physicians carry malpractice coverage
Right to suspend physician for not having coverage
Case: Right to Suspend Physician

Investigation and
Settlement of Claims
An insurance company may decide to settle a claim based on the risk, usually because of:
Costs associated with a trial.
Higher payout could occur should the case go to trial.

Review Case
Sexual Assault
Does sexual assault generally constitute rendering professional services within the coverage provisions of a physician’s insurance policy?
Should a malpractice insurer be required to indemnify a physician for liability resulting from the sexual assault of a minor?

Review Case
Sexual Assault (cont’d)
No!
Sexual assault does not constitute rendering professional services within coverage provisions of an insurance policy.
New Mexico Physicians Mut. Liab. Co. v. LaMure held the malpractice insurer not required to indemnify a physician for liability resulting from the sexual assault of a minor.

Review Questions
What is the purpose of an insurance policy?
Describe the conditions of an insurance policy.
What are the primary components of an insurance policy?
What are the primary categories of a risk?
What are the distinct parts of an insurance policy?

Review Questions (cont’d)
Under what circumstances should a healthcare professional self-insure?
Should a board member have personal liability insurance coverage?
Describe what acts a professional liability policy covers, as well as the risks it does not cover.

Chapter 22

Managed Care

&

National Health Insurance

Learning Objectives
Describe the common models of managed care organizations.
Describe the purpose and process of utilization review.
Describe the purpose & various titles of the Patient Protection and Affordable Care Act of 2010 (PPACA).
Describe the various court rulings involving PPACA.

Managed Care
Process of structuring or restructuring the healthcare system in terms of financing, purchasing, delivering, measuring, & documenting broad range of healthcare services & products.
Constraints of Managed Care Organizations
Limitations on the choice of providers by the consumer.
Requirements for prior authorization in order to obtain services.

Managed Care
Models
Health Maintenance Organizations (HMOs)
Preferred Provider Organizations (PPOs)
Exclusive Provider Organizations
Point of Service Plans
Experience-Rated HMOs

Managed Care
Models (cont’d)
Specialty HMOs
Independent Practice Associations
Group Practice
Group Practice Without Walls

Managed Care
Models (cont’d)
Physician Hospital Organizations
Medical Foundations
Management Services Organizations
Vertically Integrated Delivery System
Horizontal Consolidations

Managed Care (cont’d)
Federally Qualified HMOs
State Laws
Case Management Firms
Third-Party Administrators

Managed Care
Utilization Review
Utilization Review
Prospective
Concurrent
Retrospective
Utilization Management Firms
Negligent utilization review decisions

Managed Care (cont’d)
Liability for Nonparticipating Hospitals
Employee Retirement Insurance Security Act
Reducing Exposure to Liability
Health Care Quality Improvement Act (1986)
Open enrollment
Emergency care
Ethics in Patient Referral Act (1989)

Managed Care
Legal Actions
Financial Incentives Disclosed
Insurer & Tort-feasor
Benefit Denials
False & Misleading Statements

Managed Care
Price Fixing
Occurs when two or more competitors come together to decide on a price that will be charged for services or goods
Considered a per se violation of the antitrust laws

Managed Care
Market Power
Product Market
Geographic Market
Provider Exclusion
Antitrust & Market Share

National Health Insurance
PPACA
Congress, after months of contentious debate, by a slim margin enacted the Patient Protection and Affordable Care Act (PPACA).
PPAC
Increases the number of Americans covered by health insurance & decreases the cost of insurance
Eliminates discriminatory acts, such as exclusions due to preexisting conditions, health status, & gender

PPACA
Reforms Immediately in Place
Eliminates lifetime & unreasonable annual limits on benefits
Prohibits recessions of health insurance policies
Provides assistance for those who are uninsured because of preexisting conditions
Requires coverage of preventative services and immunizations

PPACA
Reforms Immediately in Place (cont’d)
Extends dependent coverage up to age 26 years
Develops uniform coverage documents so consumers can make equal comparisons when shopping for health insurance
Caps insurance companies’ nonmedical, administrative expenditures

PPACA
Reforms Immediately in Place (cont’d)
Ensures consumers have access to an effective appeals process and provide a place to turn for help navigating the appeals process and assessing their coverage
Creates a temporary reinsurance program to support coverage for early retirees
Establishes an Internet portal to assist Americans in identifying coverage options
Facilitates administrative simplification to lower health system costs

PPACA
Act Titles
Title I. Quality Affordable Health Care for All Americans
Title II. The Role of Public Programs
Title III. Improving the Quality and Efficiency of Health Care
Title IV. Prevention of Chronic Disease and Improving Public Health
Title V. Health Care Workforce

PPACA
Act Titles (cont’d)
Title VI. Transparency and Program Integrity
Title VII. Improving Access to Innovative Medical Therapies
Title VIII. CLASS Act
Title IX. Revenue Provisions
Title IX. Strengthening Quality, Affordable Health Care for All Americans

PPACA Challenged
Supreme Court 6/28/12
Agreed that the requirement for nearly all Americans to buy health insurance
Court excised part of law requiring states to expand their Medicaid coverage in a joint federal–state effort, to families with incomes up to 133% of the federal poverty level (FPL)

Affordable Care Act
Controversy Continues
Politicians, Insurers, & Policyholders
Increasing Number of Insurance Companies Not Participating in High Risk Markets
Excessive losses due to lower enrollment numbers
More costly medical conditions participate
Less costly do not participate
Increasing insurance premiums

Veterans Administration
The Veterans Administration
Provides care for 8.76 million Americans.
System problems include
Long waits for care
Falsified records

Veterans’ Healthcare Bill
Makes it easier to access health care benefits
Provides for more health professionals
Disciplines VA executives who are negligent

Review Questions
Discuss the purpose and various titles of the Patient Protection & Affordable Care Act of 2010 (PPACA).
Describe the various court rulings involving PPACA.
Describe the common models of managed care organizations.

Review Questions (cont’d)
Describe the purpose & process of utilization review.
Why did Congress pass the Health Care Quality Improvement Act of 1986?
What is price fixing?