Before the Joint Committee on Health Care Financing
The Mass Medical Society wishes to be recorded in support of H.1024, “An Act to Encourage Quality Reviews and Reduce Costs in Health Care”, sponsored by Rep. William Galvin.
Section 1 of the bill addresses medical peer review, the process by which a professional review body considers whether a practitioner’s clinical privileges or membership in a professional society will be adversely affected by a physician’s competence or professional conduct. Today’s peer review systems cover cost and quality issues well beyond traditional complaint processes. Under current law, the proceedings, reports and records of a medical peer review formal process in licensed hospitals, nursing homes and HMO’s are confidential and exempt from discovery, but only in those settings. This bill broadens the definition of a medical peer review committee in M.G.L. Chapter 111, section 1 to include medical peer review committee’s not soley affiliated with such health care facilities, including but not limited to Accountable Care Organizations (ACO’s). The rational for this change is simple: We need peer review protections for all new health care entities, not just the ones in existence 20 years ago.
Section 2 sets the judgment interest rate for medical malpractice cases at the current federal funds rate plus two percent and clarifies that this rate will apply to all medical malpractice cases, including those negligence cases where a fatality may have occurred. Currently cases brought as wrongful death actions are assessed at an interest rate of 12% which significantly increases costs for such cases.
Section 3 addresses the issue of causation as an essential element of findings of negligence in medical malpractice. Adoption of this section would restore the standard of care established prior to Supreme Judicial Court decisions which recognized the loss of chance doctrine. The loss of chance doctrine creates liability in circumstances in which an undesirable outcome was more likely than not, regardless of the actions of the health care provider. This court based doctrine creates significant incentives towards defensive medicine and greatly increases defense costs for cases with bad outcomes but where negligence did not cause the underlying harm.
Section 4 addresses punitive damages. Currently, courts are reluctant to allow insurance to cover the costs of punitive damages since such damages are designed to change behavior through direct penalties for egregious behavior. In the context of medical malpractice, however, court decisions have applied Chapters 176 D and 93 A in an aggressive manner which may lead to triple damages applied to self insured hospitals which fail to settle a defensible case. Case law sets the malpractice awards in such cases as the basis for the multiple damages for engaging in an unfair business practice in insurance rather than allowing the courts in the 93A case to set actual damages based on the loss caused by failure to settle. Given the size of many medical malpractice awards, one 93A case which applied an additional penalty of triple damages on top of a liability award would result in payments of four times the original jury award to a plaintiff. Since these damages are punitive and not covered under reinsurance, one such case could bankrupt a small hospital system. The proposed legislative language would not prevent such awards but simply make clear that within the Commonwealth, systems could purchase insurance, if available, which could cover such damages. Both providers and patients would benefit since awards could be paid and health care systems would not risk bankruptcy if insurance coverage were allowed.
In conclusion, H.1024 addresses simple solutions to ongoing concerns which generate significant costs , impede quality reviews and threaten the efficient provision of high quality health care. The MMS urges favorable action.
