August 13, 2003

2003 Medical Liability Bill Summary

CAPS ON NON-ECONOMIC DAMAGES

1. Caps in "Routine" Medical Malpractice Cases

- The cap on non-economic damages is split into two categories: one for physicians and health care providers and a separate category that applies to hospitals, HMOs, etc.

- In the physician category, the bill establishes a $500,000 cap on non-economic damages per claimant, regardless of the number of defendant physicians.

- Any one physician, however, regardless of the number of claimants, is not responsible for more than $500,000.

- The maximum amount of non-economic damages all claimants can recover in the aggregate against all physicians is $1,000,000.

Example 1: If there is one defendant physician being sued by a patient and his/her spouse (2 claimants), the most that physician will be responsible for in non-economic damages is $500,000.

Example 2: If there are two defendant physicians being sued by just the plaintiff (1 claimant), the most that plaintiff can recover in non-economic damages is $500,000.

Example 3: If there are two or more defendants being sued by a patient and his/her spouse (2 claimants), the maximum amount of non-economic damages that can be recovered in the suit is $1,000,000.

- In the separate non physician category, non-economic damages shall not exceed $750,000 per claimant and the total non-economic damages recoverable by all claimants is $1.5 million.

2. Situations in Which the Cap Can Be Pierced

- In cases involving wrongful death and permanent vegetative state, all claimants may recover a total of $1 million from all physicians without any special findings by the court.

- In the separate non-physician category, all claimants may recover a total of $1.5 million from all non-practitioner defendants.

- If a case does not involve wrongful death or permanent vegetative state, but the trial court finds that a manifest injustice would occur if the lower cap was imposed AND the finder of fact finds that a catastrophic injury has occurred, then only the injured patient may recover from a physician an additional amount up to $1 million in non-economic damages.

- For the same findings as immediately above, involving a defendant in the non-physician category, then the injured patient may recover up to $1.5 million from all non-practitioners.

§ Briefly summarized, a catastrophic injury is defined as severe paralysis, amputations, severe brain injuries, severe burns, blindness and loss of reproductive organs. Please refer to the text of the bill for more detail. The full version of the bill (over 170 pages) is available on the Florida Medical Association Web site at www.fmaonline.org .

It is important to note that regardless of whether the cap is pierced or not, and regardless of the number of defendants or the number of claimants, the maximum amount of non-economic damages awardable in any one case in the physician category is $1 million.

3. Caps in Emergency Room Situations

- A different cap applies for physicians and facilities providing emergency care.

- For physicians, non-economic damages shall not exceed $150,000 per claimant and the total non-economic damages recoverable by all claimants from all physicians is $300,000.

- For facilities, non-economic damages shall not exceed $750,000 per claimant and the total non-economic damages recoverable by all claimants from all facilities is $1.5 million.

- The ER cap cannot be pierced.

- The ER cap applies to physicians providing "emergency services and care pursuant to obligations imposed by s. 395.002(10) and 401.265 to persons with whom the treating practitioner does not have a then-existing health care practitioner-patient relationship for the medical condition for which such services and care are being provided." How far this cap will extend is fact specific and will be certain to cause a great deal of litigation.

SOVEREIGN IMMUNITY / SCHOOL PHYSICALS

- The bill does not extend sovereign immunity on emergency rooms and physicians who provide emergency care as contemplated in earlier drafts.

- The bill does extend sovereign immunity to any physician who contracts with a state college or university to provide medical services to a student who participates in intercollegiate athletics. This provision appears to apply only to physicians who act as team doctors for a state school and does not apply to physicians who volunteer their services to private universities or high schools.

- The physician would have to indemnify the state for the amount the state would be liable for ($100,000 per incident).

- Revises requirements of the Florida High School Activities Association for participation in interscholastic athletics that requires an evaluation and history form incorporating recommendations of the American Heart Association for participation.

- The bill deletes a provision that requires the physician to certify that the student meets the minimum standards established by the association.

GOOD SAMARITAN IMMUNITY

- The bill makes two important changes to Florida’s Good Samaritan statute. The current version affords very little protection because of the language used.

Situation One:

- Any physician or hospital that provides emergency services pursuant to obligations imposed by federal or state EMTALA requirements shall not be held liable for any civil damages as a result of such medical care unless they act with reckless disregard for the consequences of their care.

- The current statute defines reckless disregard so that in essence, it is the same as ordinary negligence. This bill redefines reckless disregard as conduct that created an unreasonable risk of injury so as to affect the life or health of another, and such risk was substantially greater than that which is necessary to make the conduct negligent. A little ambiguous, but better nonetheless.

Situation Two:

- A physician shall not be liable for any damages for medical care or treatment necessitated by a sudden or unexpected situation or by an occurrence that demands immediate medical attention, as long as:

· The physician is in the hospital attending to a patient of his or her practice; or

· The physician is in the hospital for business or personal reasons unrelated to direct patient care; and

· The physician voluntarily provides care or treatment to a patient with whom at that time the physician does not have a then-existing patient-physician relationship.

· Such care or treatment is not proven to amount to conduct that is willful and wanton and would likely result in injury . . .

LITIGATION REFORM

- This bill provides for the increased exchange of information during the presuit process, which remains unchanged at 90 days. The key change is that the defendant will be able to take the unsworn statement of the plaintiff’s treating physicians, but must provide notice and the opportunity for all parties to be present.

- Provides for new standards as to who can testify as an expert witness in a medical negligence trial. In summary, the expert must be in the same or similar specialty as the defendant and must have been in the active practice of medicine in the last three years, involved in teaching, or in a clinical research program. The loophole that allowed physicians in a different specialty than the defendant to testify as an expert is eliminated. Unfortunately, a provision was inserted in this bill that gives back to the trial judge some discretion as to who can testify as an expert. Hopefully this will be interpreted narrowly.

- The bill provides that the expert who signs the presuit affidavit, which starts the process rolling, must have the same qualifications as the expert who testifies at trial. This is a key change as currently any physician can sign the presuit affidavit.

- Provides for the discovery of the opinion and affidavit of the presuit expert.

- Increases the court’s ability to sanction parties for failure to follow presuit procedures.

- Provides for mandatory mediation of all medical negligence suits within 120 days after suit is filed.

- Damages in cases submitted to voluntary binding arbitration are now limited by the Wrongful Death Act. Currently, in arbitration cases involving wrongful death, the plaintiff can receive damages greater in amount than if the case went to trial. (This addresses the St. Mary’s case).

- Removes the unlimited recovery of damages provision from medical negligence cases where the defendant refuses to arbitrate. This is important to ensure that the plaintiff cannot use arbitration as a way to get around the cap on non-economic damages.

- Provides for itemized verdicts in medical negligence cases.

- Mandates a study to determine whether medical review panels should be included as part of the presuit process in medical negligence litigation.

- Requires a statement in each malpractice settlement to the effect that a decision to settle may reflect an economic decision and alone, is not an admission of a deviation from the standard of care.

- A number of changes are made to the NICA system:

· Provides that no civil action may be brought if claimant accepts award under NICA and a NICA award cannot be made if claimant recovers under a settlement or civil action.

· NICA hearing may be split by administrative law judge to first address qualification of case and then award amount.

· Provides for a death benefit in lieu of funeral expenses.

· Authorizes hospitals in large counties to pay assessments on behalf of certain health care professionals.

· Calls for a study to be done on the eligibility requirements for a birth to be covered under the NICA program.

VICARIOUS LIABILITY

- The bill overrules the Villazon decision and provides that the mere fact that an HMO provides for the provision of health care services does not create an actual or apparent agency relationship for purposes of vicarious liability. In other words, just because a physician is on an HMO panel will not make the HMO automatically liable for the negligence of the physician.

- In addition, the bill provides that health insurers and HMOs will fall under the same cap as the health care provider and that an HMO or health insurer will not be liable for the medical negligence of a physician unless it specifically directed and actually controlled the conduct that caused the injury.

- Hopefully this change will eliminate suits against physicians in which the real objective is to get to the deep pockets of the HMO and will cause HMOs to drop the requirement that physicians on their panel carry malpractice insurance.

BAD FAITH

- The bad faith provisions in the bill do not go near as far as those called for in the Governor’s Task Force proposal. Of the four major changes advocated, this bill makes two, and even then, does so in a much-weakened form.

Safe Harbor:

- First, the bill provides that a medical malpractice insurance company cannot be held in bad faith if it tenders policy limits within the earlier of:

· 210 days after the claimant’s complaint is served on the defendant; or

· 60 days after the conclusion of specified actions, including disclosure of witnesses, production of documents, specified depositions, and mediation.

- If either party is responsible for unreasonable delays, they lose the benefit of the more favorable safe harbor.

- The failure to offer to settle during the safe harbor period does not create a presumption that the insurance company acted in bad faith.

- Under current law, the insurance company is often forced to make early settlement decisions without being able to fully evaluate the claim. Current law provides no safe harbor.

Considerations:

- If the insurance company does not tender policy limits within the safe harbor period and a bad faith action is brought, the court is required to consider a list of specified factors abbreviated below:

· The insurer willingness to negotiate;

· The propriety of the insurer’s methods of investigation and evaluating the claim;

· Information provided to the insured;

· Actions of the insured;

· Actions of the claimant;

· Whether other defendants were dismissed or settled; and

· Whether there were multiple claimants seeking compensation in excess of policy limits.

- This bill does not completely absolve an insurance company of the obligation to act in good faith towards the insured physician, it does not change who can bring a bad faith cause of action and it does not change the amount that can be recovered in a bad faith cause of action. If the insurer is found to have acted in bad faith, it is still responsible for the entire excess judgment.

MALPRACTICE INSURANCE RATE REDUCTIONS

- Earlier versions implemented a rate rollback of insurance premiums of a specified amount. This bill does not do that. Rather it requires all medical malpractice insurers to make rate filings that reflect a rate reduction factor determined by the Florida Office of Insurance Regulation (OIR).

- This bill also makes a number of other changes in how rates are calculated and approved. The most notable changes are as follows:

· OIR has 60 days after the effective date of this bill to determine a "presumed factor" that reflects the impact of the provisions of this bill.

· Within 60 days after the presumed factor is calculated, each medical malpractice insurance company has to reduce their rates by the presumed factor.

· The new rate will take effect no later than January 1, 2004.

· Rates in effect on July 1, 2003, shall be frozen until this new rate filing.

· For policies issued or renewed between September 15, 2003, (the effective date of this bill) and the effective date of the new rate filing, the insurer must refund the difference between the rate actually charged and the rate finally approved by OIR.

· If the insurance company feels the rate reduction would result in an inadequate rate and files a rate that deviates from the presumed factor, it has the burden of proving that the forced rate would be unlawful and must provide specific information that justifies this position. Even so, the rate deviation cannot go into effect without OIR approval.

· If part of this bill is declared unconstitutional, the presumed factor will be recalculated.

· Rate filings will now be required once a year. Under current law, rate filings are only required when rates are increased.

· Medical malpractice insurers may not request arbitration of a rate filing in lieu of a hearing.

· Bad faith judgments cannot be factored into the rates.

· Prohibits the inclusion of costs attributed to investment losses.

· Requires discounts or surcharges based on the provider’s loss experience.

OTHER MALPRACTICE INSURANCE CHANGES

- Allows a group of 10 or more physicians to form a commercial self-insurance fund.

- Reauthorizes the formation of medical malpractice self-insurance funds that were discontinued in the late 1980s.

- Adds additional requirements on the reporting of professional liability claims and increases the fines for violations of these requirements.

- Insurers must notify policyholders of average rate increases of 25% or more.

- OIR must annually publish an analysis of closed claim data, financial reports and rate filings and post on the Internet.

- Unfortunately, this bill does not change the statutory provision that prohibits insurance companies from giving their insured physicians the authority to veto a settlement.

- Requires that two officers of the medical malpractice insurance company must swear to annual rate filings.

PHYSICIAN FINANCIAL RESPONSIBILITY

- This bill does not change the ability of a physician to self-insure (or "go bare" as its commonly referred to).

- It does prohibit "wasting" insurance policies. These policies, however, are rare in Florida.

- For those who meet their financial responsibility requirements by obtaining an irrevocable letter of credit or an escrow account, the entire required amount must be used to satisfy a judgment or settlement – it cannot be used for attorney fees or other defense costs.

- Physicians who perform surgery in an ambulatory surgical center and who have an escrow account, an irrevocable letter of credit or choose to carry malpractice insurance, must comply with the limit requirements imposed on those physicians who have hospital staff privileges ($250,000 versus $100,000).

- If a physician fails to pay at least $100,000 (or $250,000 if the physician has hospital staff privileges) of a medical malpractice award (be it a settlement, judgment or arbitration award) within 30 days of the award, then the Department of Health (DOH) has to suspend that physician’s license.

- If a physician’s license is suspended for failure to pay a malpractice claim, the amount required to be paid by statute ($100,000 or $250,000 for physicians who have hospital staff privileges) must be satisfied before the license can be reinstated.

PATIENT SAFETY

- The bill contains a number of provisions recommended by the Governor’s Task Force that are designed to improve patient safety.

· The bill requires hospitals to establish patient safety plans and committees.

· Broadens immunity for hospitals and staff who take disciplinary actions against medical staff.

· Requires hospitals and physicians to inform patients of an adverse incident. Such notification, thankfully, is not considered an admission of liability.

· The bill requires college and university health care training programs to provide instruction in patient safety.

· It requires doctors to have training in misdiagnosed conditions as part of their current CME requirements.

- The bill requires a study on the establishment of a patient safety entity.

- The bill requires a study on the how to best provide consumers with information on how to choose the safest hospital with the best quality of care.

PHYSICIAN DISCIPLINE

- The bill makes a couple of changes in what type of administrative actions constitute discipline. First offense citations are not discipline and are not required to be reported to the National Practitioner Databank. A citation cannot be given in the case of an adverse incident, but for the first time, citations can be used to close minor standard of care cases. These cases, which constitute a large bulk of the Board’s disciplinary caseload, can now be closed with no discipline and no report to the Databank.

- The bill requires the Office of Program Policy Analysis and Government Accountability to conduct an audit of the DOH physician disciplinary process.

- Requires the DOH to create a workgroup to study the physician disciplinary process.

- The bill deletes the 10 % limit on licensure fee increases. Caps on fees are still in place.

- The Board of Medicine (and other Boards) may now require information for licensure regarding "relevant professional qualifications." The required information is to be defined by the applicable board.

- The DOH has 30 days to update a physician profile after receiving new information. The Department must investigate all information received regarding profiling, even if it does not appear that a law related to the practice of medicine was violated. The Department also has to provide an easy to read description of all final disciplinary actions, and include a link to the final order.

- For MDs and DOs only those liability cases over $100,000 will go on the physician’s profile. The current law is $5,000.

- There is a new provision that requires the Department to include on the profiles information regarding hospital disciplinary action.

- A physician who becomes licensed in Florida has 30 days to verify the contents of his initial profile once it is completed. Failure to verify the initial profile and make any corrections could result in a fine. The statute allows the Department to develop a rule for a fine of up to $100 per day for failure to verify.

- A currently licensed practitioner has 15 days to update his profile after information changes. The fine does not apply to a failure to update a profile.

- A physician can request a link to the FMA Web site (or other professional association) from his profile.

- The bill requires that all closed claims information is to be reported, and the information is to go to the Office of Insurance Regulation instead of DOH.

- The bill requires closed claim information be included on the physician’s profile within 30 days.

- The Department will now be able to obtain patient records without patient consent or the approval of the probable cause panel. The Department is currently unable to get such records unless the patient gives authorization.

- The bill clarifies what costs shall be recovered when a physician is administratively disciplined. In addition, the bill clarifies that the boards shall make the final determination regarding the amount of costs. Current law already requires the recovery of costs but recent case law on how much and how they are assessed had to be clarified.

- The bill allows the Department to investigate a closed claim of over $50,000 if it is less than six years old, even if the six-year statute of limitations in F.S. 456.073(13) has passed.

- The bill makes an important change in providing that the determination of whether a physician has violated the standard of care is a conclusion of law to be determined by the Board of Medicine. The bill clarifies that this is not a finding of fact that the Board is in effect stuck with once the Administrative Law Judge makes such a determination.

- The bill provides that the Department shall notify DOAH within 45 days if the Department determines a formal hearing is required.

- The bill also provides that the successful mediation of disputes does not constitute discipline and is not reportable to the Databank. Mediation will be available in more cases.

SEVERABILITY

- The provisions of the bill are severable. If any provision is declared unconstitutional, the other provisions that can be given effect without the invalid provisions are to remain applicable.

EFFECTIVE DATE

- The bill provides that when allowable, all provisions, except changes to Chapter 766 (the litigation reform measures), are to apply retroactively. Changes to Chapter 766 are to apply only to medical incidents for which a notice of intent to initiate litigation is mailed on or after the effective date. The bill provides that the effective date of this act is September 15, 2003.

Please note:
This summary was prepared by
The Florida Medical Association

For More Information, Contact:
Ian L. Cordes
200 Butler Street, Suite 305
West Palm Beach, FL 33407
tel: 561-659-5581; fax: 561-659-1291