HHS pilots way to quicker settlements

Doctors often wish for a quicker, simpler system to handle medical malpractice cases. And the federal government hopes it has hit on a method that just might work.

The Dept. of Health and Human Services in September rolled out a pilot program in which patients and the agency will make settlement offers through a third-party administrator. If the amounts match or the patient requests less than HHS offers, the patient receives the money and the case is settled.

The "Early Offers" initiative will be open to patients treated by employees of federally funded community health centers that the HHS Health Resources and Services Administration oversees and to patients treated in the Indian Health Service program.

"We need to bring common sense into cases of medical liability so that we're not denying patients access to health care because doctors can't afford to practice medicine," HHS Secretary Tommy G. Thompson said in a speech given in Manchester, N.H.

The American Medical Association, American College of Obstetricians and Gynecologists, and the American College of Emergency Physicians are among the organizations that welcome the initiative.

ACEP generally supports programs that allow timely compensation for patients truly injured by medical negligence and that prevent wasted time in the courtroom, said Texas emergency physician Angela Gardner, MD, a member of the college's board of directors.

"On first glance, this looks like a program that we would support," said Dr. Gardner. She noted that ACEP's board had not yet had a chance to discuss the new pilot program. "I'm interested to see what happens over time."

But organized medicine officials said pilot programs don't lessen the need for national tort reform that includes a $250,000 cap on noneconomic damages.

"This pilot program is an important experiment, but we have a proven performer in the reforms working in California," AMA President John C. Nelson, MD, MPH, said in a statement.

ACOG agrees. "We're enthusiastic about the pilot program," said ob-gyn Albert L. Strunk, MD, the group's vice president of fellowship activities. "But also we support the push in the Senate to pass the tort reform bill."

Most physicians and the Bush administration back a cap as a way to address the rising medical liability insurance rates that have forced some physicians to retire early, give up high-risk procedures or move to states with better tort reforms.

Trial lawyers and most Democrats don't see that as the best solution and have instead called for reforming insurance laws.

A bill calling for a $250,000 noneconomic damages cap passed the House but has been stalled in the Senate because there are not enough votes to block a Democratic filibuster against it.

How the pilot program works

The Health Resources and Services Administration already has a program in place to review cases in which patients file a complaint about the medical treatment they received at a federally funded community health center or through the Indian Health Service. After the complaint is filed, HHS opens a case and investigates the claims.

Now under the "Early Offers" pilot, when HHS' investigation concludes that the patient deserves a monetary settlement, officials will send the patient a letter explaining the program.

Here's what will happen next:

• The person who filed the claim will have 90 days to make an offer to settle the case for a specific amount. If they choose to submit an amount, they mail it to a third-party, independent administrator.
• HHS also has 90 days to submit its settlement offer to the third-party administrator.
• If both sides make an offer and the amount the patient (or person who filed the claim on behalf of the patient) asks for is equal to or less than the amount the government has proposed, a settlement has been reached in the amount the claimant requested. The third-party administrator will notify both sides.

Neither party will know if the other has submitted an offer and won't be privy to the dollar amount unless a settlement is reached.

If the two sides don't match or the patient's proposal is higher than the government's, it's as if nothing has happened and the patient could still file a lawsuit. The same is true if one side doesn't submit an offer.

Hoping others will follow

Millions of patients annually receive care though the two programs that will be part of the pilot. But it's unclear how many claims may be filed.

Nonetheless, the Bush administration hopes "Early Offers" ultimately will serve as a model that others can use to resolve some medical malpractice disputes fairly and effectively.

"Excessive litigation and jury awards have led to increased premiums and higher health care costs for all and made it more difficult for patients to get care," Thompson said. "No patient has ever been healed by a lawsuit."