An evaluation by a pretrial liability review panel "is basically a very quick rule-out of any case that might be considered nonmeritorious," says Michael B. Hoover, MD. It can save both defendants and plaintiffs time and effort.

Litigation screening panels on trial: Are they working?

Many states use pretrial review panels to sift out meritless cases and encourage early settlement without going to court. Are they working?

By — Posted Aug. 3, 2009

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Having served on at least 14 pretrial screening panels in the past 20 years, Evansville, Ind., general surgeon Michael B. Hoover, MD, has seen his share of questionable medical liability claims.

In one case, a patient sued over a needle she claimed had broken off in her buttock during an emergency procedure. The screening panel was charged with reviewing the case before it could proceed to court. After examining x-rays, Dr. Hoover and his fellow panel members discovered that the needle was not a hollow surgical needle but a solid needle like those used in sewing.

The case was found to be without merit by the panel and did not see the inside of a courtroom.

"The evaluation is basically a very quick rule-out of any case that might be considered nonmeritorious," Dr. Hoover said. "It not only saves [defendants] time and effort, but it saves the plaintiffs time and effort. What if the case went through to court to find out it was a sewing needle?"

Indiana is one of about 20 states using prelitigation review panels, which proponents tout as a way to temper medical liability costs by weeding out frivolous claims and encouraging early settlement of valid cases. The concept has faced resistance from critics who say it unnecessarily and unfairly drags out the legal process.

A well-designed pretrial screening panel does a very effective job of not only getting claims settled faster, but a higher percentage of the system cost goes to the injured patient, and that's an important piece of this. What you don't want to do is create another bureaucratic step that doesn't do anything but create another hoop you have to jump through and another cost you have to pay," said Robert J. Walling, a partner with Pinnacle Actuarial Resources Inc.

The actuarial and consulting firm conducted a 2008 study of the issue for the American Medical Association, which views the panels as a promising alternative for states that cannot achieve more effective, traditional liability reforms such as noneconomic damage caps. The analysis found that states with screening panels generally had better overall medical liability insurance rates -- 20% below the national average -- and lower claims costs than states without such laws. States with stronger panel laws also showed a higher percentage of cases that closed without any payout and quicker settlement times.

Efficiency and fairness

While a typical claim takes at least two years to resolve, including an average two-week jury trial, screening panels convene and evaluate cases within a matter of months, usually not more than six. A hearing is conducted over a day or two by a committee of one or more physicians, an attorney and a nonvoting chair, who render a nonbinding opinion. Costs generally are shared by the parties or covered by the state. Panel members may be appointed by a court or selected by both sides.

The process offers plaintiffs access to an expert review at little or no expense, Dr. Hoover said. And regardless of the opinion, it does not interfere with parties' ability to go to trial, where either side can use a panel opinion as evidence.

"The panel does not have the right to be the ultimate decision-maker. It just provides the expertise" to help parties resolve claims more efficiently, Dr. Hoover said.

Supporters have heralded a nearly 25-year-old, mandatory screening process in Maine, where 84% of claims end without any payment and average settlement times are roughly half those found in some other states without panel laws, according to the AMA report. Only unanimous findings are admissible in court, and parties can agree to make the early findings binding.

"If the process doesn't have the power or authority or weight to force a change in the legal process, then it has no teeth," Walling said.

Maine Medical Assn. Executive Vice President Gordon H. Smith said the system has helped resolve a majority of cases before trial and contributed to a relatively stable liability climate. Insurance rates are 20% to 30% lower than those in neighboring New Hampshire, which, until recently, had no panel law.

"Given that Maine doesn't have a cap on [noneconomic] awards, the panels, along with a reasonable statute of limitations, are the things that have made the most difference," Smith said.

As further evidence of Maine's success, average claims expenses were 66% higher in New Hampshire between 1996 and 2006, noted Michael L. McCall, senior vice president of insurance operations for Medical Mutual Insurance Co. of Maine, which operates in both states. During the same period, only 2.5% of Maine cases went to trial, compared with 7% in New Hampshire.

"You can appreciate the cost differential if you're working up every case in preparation for the one bite of the apple before a jury trial, instead of preparing for a one-day hearing," McCall said.

New Hampshire doctors are hoping to close those gaps. In 2005, the state became the latest to enact a panel law modeled after its neighbor's. The statute requires a study of the panels' effects with findings due by December 2010.

While still early to gauge the panels' impact on the state's liability climate, New Hampshire Medical Society Immediate Past President Oglesby H. Young III, MD, said they are working. He pointed to recent statistics showing that, of the 48 cases that have gone before a panel, only four went on to a jury trial.

The critics

But not everyone is sold that review panels are a proven way to reduce costs and hassles.

New Hampshire trial lawyers backed an attempt in 2008 to repeal the state panel law, pointing to long delays of 15 months before cases reached a panel.

"That arbitrary barrier is not only delaying access to justice, but in some cases foreclosing it," said Ellen J. Shemitz, executive director of the New Hampshire Assn. for Justice, the state trial bar.

Plaintiffs are essentially forced to try their cases twice, making it difficult for attorneys to afford taking smaller cases, she said. Now, however, the state has a mediation process overseen by the courts -- not in place at the time the panel law passed -- to help resolve claims out of court.

Shemitz also said the rules preventing plaintiffs -- but not defendants -- from using split panel findings in court are unfair.

But Dr. Young said the legal standards for panels are the same as they are in court and require plaintiffs to win on both negligence and causation. He said the time lags resulted from a wave of constitutional challenges from trial lawyers that kept the panel law from taking effect until 2007.

Through the years, roughly 30 states have repealed their panel laws either legislatively or judicially.

Nevada was one of them. But problems arose largely because players did not abide by the rules, not because of the system itself, said Rudy R. Manthei, DO, a Henderson, Nev., ophthalmologist who helped push for other tort reform that eventually replaced the panel system.

"It started breaking down in terms of functionality," he said. Doctors and lawyers who signed up to serve on panels "wouldn't show up, and you'd end up canceling and creating huge delays. So it really fell out of what it was meant to do."

Virginia's decades-old system, while still on the books, is no longer used, largely because it is optional, said Gerald C. Canaan III, a medical liability defense lawyer and director with Hancock, Daniel, Johnson & Nagle PC in Glen Allen, Va.

"People quickly realized if both sides didn't participate, it nullified the weight of the panel opinion at trial," he said. "It doesn't do me any good to get an opinion that doesn't carry any weight in court ... and it just became expensive for both sides."

Valparaiso, Ind., plaintiff lawyer Steven L. Langer said panels become moot when insurance companies refuse to settle a claim, despite an adverse panel finding. "I agree that no doctor should be sued frivolously. But no doctor should be able to create a frivolous defense," said Langer, who is preparing for trials in three cases where patients won panel decisions.

"Since it's not adhered to, all [the panel system] does is delay resolution for both the doctor and the patient." A more efficient approach, he said, would be to require an affidavit of merit from an expert with the filing of each case, which would serve the same goal of screening claims before court.

But the panel process does not require parties to settle, nor does it preclude anyone from going to trial, regardless of the outcome, said Darryl Thomas, chief claims officer for ProAssurance, an Alabama-based medical liability insurance company that operates in Indiana. He said the company and its physician members carefully scrutinize adverse panel findings and have prevailed in 60% of cases it took to trial.

However, Thomas said, ProAssurance sees more frequent lawsuit filings in Indiana, and claims tend to take longer to resolve in comparison to states without panel laws.

"It's pretty cheap, relatively speaking, to get a case reviewed, so there's no disincentive. But if we know we're winning, it's worth the tradeoff," he said, pointing to the company's track record of prevailing in 75% of panel hearings. Indiana passed its screening law as part of a comprehensive tort reform package. The panels, along with other reforms, have helped keep rates relatively stable, Thomas added.

Room for improvement?

Medical Mutual's McCall said the key to a successful panel system is a sincere effort by all stakeholders.

In New Hampshire, Dr. Young said conflicts of interest among physician panelists and defendants or lawyers involved in the cases before them often stymie the process. In response, the state medical society is helping to recruit more than 1,000 volunteer physicians to serve on panels to avoid delays or shortages.

Indiana, meanwhile, requires all licensed doctors to participate, for which they receive a nominal fee. While coordinating doctors from around the state can be challenging, Dr. Hoover said putting in the hours to review cases -- and sometimes revisit them if postponed -- is a minor strain on his time.

Dr. Hoover has seen the process work well firsthand: Two cases filed against him that yielded panel opinions in his favor were dropped. He settled a third case in which a panel found for the plaintiff.

"If everything could be sped up and done even more efficiently, it would be great. But considering the legal wheels tend to grind slowly anyway ... this works well, while still being fair to patients, and it's a good system."

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Medical review panels under review

Panels in several states have faced legal challenges, with courts both upholding and dismissing them.

Case: Johnson v. St. Vincent Hospital, Indiana Supreme Court, 1980
Outcome: Despite imposing slight delays in getting to court, the review panel mandate did not alter plaintiffs' right to a jury trial, justices found. Instead, the high court found that the time, preparation and panel opinion that came out of the review process could help plaintiffs' cases.

Case: Aldana v. Holub, Florida Supreme Court, 1980
Outcome: The high court found that the legislatively imposed time periods within which panels had to review cases were arbitrary and violated plaintiffs' due process rights.

Case: Bernier v. Burris, Illinois Supreme Court, 1986
Outcome: Justices concluded that the medical review panels unconstitutionally imposed on the judiciary's powers because the panels consisted of lay members.

Case: Keyes v. Humana Hospital, Alaska Supreme Court, 1988
Outcome: Rather than infringing on a plaintiff's jury trial rights, justices found that submitting a panel's opinion in court helped jurors decide the merits of a case. The court also said the panel law was reasonably tied to a legitimate government purpose of alleviating the effects of a liability insurance crisis.

Source: Georgia Public Policy Foundation

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How the medical screening panel works in New Hampshire

State court officials continue to track the progress of the state's screening panels, enacted in 2005. As of April 28, 2009, 245 claims had been filed. Of those that have advanced through the system:

81 cases were resolved prior to panel hearing

4 claims advanced to jury trials

36 panel hearings were waived by both parties

48 panel hearings were held

Of the 48 cases in which hearings were held:

0 were held within 0 to 6 months of filing

5 were within 6 to 12 months of filing

43 were more than 12 months after filing

22 panel hearings lasted 1 day

24 hearings lasted 2 days

2 lasted more than more than 2 days

Source: New Hampshire Superior Court

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How the medical screening panel works in Indiana

Screening panels in Indiana, as in many states, consist of three physicians and a nonvoting attorney charged with evaluating the merits of a medical liability claim before parties incur the time and cost of going to court. From 1976, when the law was passed, until 2007, Indiana's panel issued 10,680 opinions. Of these:

6,808 (64%) found no malpractice

2,188 (20%) found malpractice

1,065 (10%) resulted in split opinions

619 (6%) involved a dispute of the facts or no opinion

Source: Indiana Dept. of Insurance

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