AMA House of Delegates

AMA studies liability surcharges

Tort reform is still its No. 1 legislative priority, but the Association is looking for nontraditional, non-legislative fixes for the tort crisis as well.

By Tanya Albert Henry — Posted July 5, 2004

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Physicians gathered at the AMA Annual Meeting last month explored a variety of options for immediate relief for a profession besieged by increasingly unaffordable medical liability insurance premiums.

The hottest topic of discussion: liability surcharges. The idea is that physicians would tack a charge onto patients' bills to help offset their insurance payment. Low Medicare and even lower Medicaid reimbursement rates combined with managed care contracts that lock in fees have left them no way to recoup increased overhead, physicians said.

"People are trying to be creative so they can do what they were trained to do," said outgoing AMA President Donald J. Palmisano, MD.

Physicians have experienced double-digit increases in medical liability insurance rates in the past several years, with some high-risk specialists such as obstetricians, neurosurgeons and orthopedic surgeons facing increases of 100% or more. Doctors have pushed for what they see as the solution to the problem -- federal tort reform that would cap noneconomic damages awarded in medical malpractice lawsuits at $250,000. But senators who support the reform don't have enough votes to stop a filibuster. Attempts to pass legislation failed twice this year.

"Tort reform sounds great, but it's not going anywhere," said Washington, D.C., orthopedic surgeon Peter E. Lavine, MD. "It [a fee] gets patients' attention and plugs them into the issue. ... Patients may say, 'I don't want to pay this,' and get more involved in tort reform."

Texas pediatric neurologist Sheldon G. Gross, MD, said he and other doctors agree it's important to include patients in the fight to pass reforms such as a $250,000 cap on noneconomic damages in medical malpractice cases. But he questioned whether surcharges would accomplish that.

"It would make people think we were using the malpractice crisis to increase our fees," he said.

Physicians on both sides of the issue agreed that the AMA needs to study the topic and determine whether liability surcharges are legal. Connecticut Attorney General Richard Blumenthal recently told an ob-gyn group that announced it was adding a "per pregnancy" surcharge that the law in that state prohibits it from doing so. The AMA will look into the legal questions and develop guidelines on the issue. The report is set to be published in December at the AMA's Interim Meeting.

"We need guidance," said Maryland ob-gyn and MedChi President Mark S. Seigel, MD. "We need the AMA to tell us if we can add a fee."

Expert witnesses, volunteer physicians

Doctors also are exploring more indirect ways to try to temper insurance rates.

Delegates accepted a report that calls for expert testimony to be honest and to be delivered by someone who is an expert on the issues before the court. While introducing the report on medical testimony, Houston psychiatrist Priscilla Ray, MD, a member of the AMA Council on Ethical and Judicial Affairs, likened a lawsuit to a machine that turns pigs into sausage.

"This report is trying to prevent doctors from becoming sausage," Dr. Ray said.

The AMA also is asking all doctors who serve as expert witnesses to voluntarily sign an affirmation stating that their testimony will comply with AMA principles. The AMA considers medical expert witness testimony the equivalent of practicing medicine.

AMA members are already expected to adhere to those guidelines. Some doctors question whether the affirmation would mean anything to physicians who are non-AMA members. "The problem with these principles is that we hold them dear, but no one else does," said Joseph A. Leming, MD, a general practice physician from Virginia.

But LaMar S. McGinnis, MD, a general surgeon from Atlanta, said asking physicians to sign an affidavit would allow doctors to see those who bring testimony of value and "those who bring something else."

The AMA will work with state medical and national specialty societies to create an expert witness affirmation and to identify mechanisms for reporting unethical testimony. The Association also will develop standards for physicians to use when they need to deal with a colleague who has given unethical testimony.

In other efforts, the AMA will work to help senior physician volunteers continue to work without having to worry about liability insurance rates. The AMA will research state laws that protect volunteer physicians and share state model legislation. It also will support and work with state medical licensing boards and other agencies to establish a special reduced-fee volunteer medical license for those who want to volunteer to serve uninsured or indigent patients.

"Many times clinics rely on retired physicians who give back to the community; however, they can't afford the insurance," said William J. Terry, MD, a urologist from Alabama, a state that passed legislation in response to the problem.

Dr. Palmisano said doctors are going to foreign countries to volunteer because they don't have to worry about liability insurance. "They would stay here if they could," he said. "But they find the climate too hostile."

Controversial resolution rejected

Before the AMA meeting even began, a resolution introduced by a South Carolina physician raised eyebrows across the country.

It suggested that the AMA notify physicians that "except in emergencies and except as otherwise required by law or other professional regulation, it is not unethical to refuse care to plaintiffs' attorneys and their spouses."

The idea went nowhere fast.

South Carolina general surgeon J. Chris Hawk III, MD, withdrew the idea before delegates had a chance to vote on it. He also noted that he included the idea to raise awareness to the issue.

"To trial lawyers I say, 'Help us fix the system before it's too late,' " Dr. Hawk said. "To my colleagues, I apologize for any problems this has caused."

While a number of doctors said they understand Dr. Hawk's frustration, they said suggesting that they don't treat a certain segment of the population was unethical and would do nothing but create a greater divide in finding a solution to the medical liability problem.

"We don't feel this will accomplish anything of a positive nature," said Benjamin Whitten, MD, a Minneapolis internist.

Several physicians at the Annual Meeting voiced concern that it would take the Association quite a while to recover from the negative press garnered by the resolution.

"This is a huge public relations nightmare," said Pennsylvania hand surgeon Andrew W. Gurman, MD.

Shortly after the AMA Annual Meeting, Pennsylvania lawmakers introduced legislation that would make it against the law to refuse to treat a patient based on his or her job, political opinions or history for filing lawsuits.

Andis Robeznieks contributed to this report.

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Massachusetts earns dubious distinction

The American Medical Association has added Massachusetts to its list of states experiencing a full-blown medical liability crisis, raising the number to 20. Other states are Arkansas, Connecticut, Florida, Georgia, Illinois, Kentucky, Mississippi, Missouri, Nevada, New Jersey, New York, North Carolina, Ohio, Oregon, Pennsylvania, Texas, Washington, West Virginia and Wyoming. In crisis states, physicians are retiring early, discontinuing high-risk services or leaving the state altogether because of high medical liability insurance rates. A confluence of factors led the AMA to add Massachusetts to the list. Among them:

  • 50% of neurosurgeons, 41% of orthopedic surgeons, 36% of obstetricians and 29% of general surgeons have reduced their scope of practice.
  • The number of jury awards of more than $2 million quadrupled over five years.
  • Median settlements in medical negligence cases increased to $925,000 in 2002, up from $600,000 in 2000.

Source: American Medical Association

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