Testimony In Support of House 605, an Act to Encourage Quality Reviews and Reduce Costs in Health Care, before the Joint Committee on Health Care Financing

The Massachusetts Medical Society wishes to be recorded in strong support of House 605.

Massachusetts is engaged in serious efforts to create and foster improved delivery models for care. Accountable Care Organizations (ACO’s) are growing in Massachusetts but not yet reaching their anticipated goals. This legislation would facilitate the formation of ACO’s by extending the same statutory framework for peer review which currently exists in hospitals to new entities such as ACO’s. If health care providers are to improve care for patients they must establish vigorous systems for reviewing the care that is being delivered, regardless of the setting. 

Section one of this bill would extend peer review coverage to all sites and professional organizations in which it takes place.

Section two of this legislation would reduce health care costs by eliminating the statutory four percent premium increase on interest paid on liability claims against health care providers. In the current environment, it is unfair to add a 4 percent or higher premium over and above current interest rates to judgments. 

Section three of the legislation addresses a decision of the Supreme Judicial Court which allowed liability claims to be brought against health care providers even in situations where the adverse outcome the patient experienced was likely to have occurred regardless of the quality of the care provided. This decision recognized the “loss of chance” doctrine in Massachusetts. This doctrine allows plaintiffs to recover in cases where their likelihood of a better outcome, regardless of the approach taken, was below 50%.  This reinterpretation of causation as any deviation from the best possible outcome is likely to increase defensive medicine costs and impact decisions on standards of care and treatment protocols in ACO’s.  In addition it may add to the costs of defending an increasing number of suits brought against individual health care providers and newly forming accountable care organizations. The loss of chance doctrine sets an unfair standard in judging health care providers and should be legislatively reviewed for its impact on costs and access.

Section 4 corrects a problem with a few cases in Massachusetts in recent years. Some cases have been brought against providers of liability coverage for failure to settle a claim prior to a judgment’s being entered in the case. The statutes state that the triple damages applied if such a suit is successful are a multiple of all underlying judgments in a case. So in the case of a 3 million dollar verdict against a defendant, the coverage provider, often a local self-insured hospital, would be subject to an additional 30 million dollar award for defending the underlying case. Our proposal would create a new way of determining the actual damages to a plaintiff. If the court finds that a settlement was unfairly withheld, the damages are triple the interest on that settlement or award rather than the entire underlying award. Our proposed language is applied to the problematic language in Chapter 93A and would have an impact on all cases brought under the statute.

In combination, these three provisions will provide fair and equitable reforms that will encourage the formation of new health care models through the adoption of responsible improvements in the environment for health care delivery.

The MMS urges your support for House 605.

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