The New Hampshire Senate just passed a bill (http://www.gencourt.state.nh.us/...) which, if not stopped, will be a whole new way of depriving victims of medical negligence of the ability to obtain reasonable compensation for their injuries. It is no small surprise the medical provider community and malpractice insurance industry supports this bill, but it is neither just nor balanced. The concept is called “early offer” and it contains three fundamental, structural imbalances: (1) Once in the early offer process, consumers cannot back out, even if they find that the circumstances of their case are no longer amenable to the early offer outcomes (e.g. They will / have suffered very large non-economic damages). (2) If a patient is interested in entering the system, but comes to realize that it is not in their interest to accept the insurer's offer, then they face a significantly higher burden of proof in court (establish gross negligence by clear and convincing evidence). (3) The bill is designed to allow providers to cherry pick which cases they will select for early offer, provides a stick to induce consumers to accept these offers, and provides no counterweight to induce payers to negotiate in good faith on consumer offers. According to the US DHS, “early offers are likely to generate significant insurer savings through reduced payments for non-economic damages.” (http://aspe.hhs.gov/...). Another study found that “An early offer program will (i) sharply reduce payouts in cases with small economic damages; (ii) will not materially affect predicted payouts in other cases; (iii) will have very different effects on different types of plaintiffs, with large payout reductions for elderly and deceased plaintiffs and much smaller effects for newborns and employed adult plaintiffs; and (iv) will overlap substantially in its effects with statutory caps on non-economic damages, and hence have a smaller effect in states with these caps.” (http://papers.ssrn.com/...).
If this bill passes (which looks very likely at this time) it would be the first of its kind in the nation to pass. Look for similar legislation near you in the future and be wary!
Please contact Governor John Lynch to urge him to veto this unbalanced legislation! (http://www4.egov.nh.gov/...). Please cut and paste some form of the following text in the comments field of the form:
"Governor Lynch. I strongly urge you to veto SB406, or the "Early Offer" bill, should it reach your desk. This bill, bought and paid for by providers (such as Elliot Hospital who testified in favor of the bill), dramatically tilts the medical malpractice system in NH in favor of insurers and providers. This bill is a solution in search of a non-existent problem in NH, and one that makes a system in which the insurance companies already exercise great sway, even more hostile to consumers. There isn't a single patient advocacy or consumer group behind this bill."
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This bill purports to provide an “alternative” to the typical negotiated or litigated process by which a medical malpractice case is resolved. The way the program would work is essentially this: A victim can submit a claim for medical negligence pursuant to the framework set out in SB406. The insurance company (or the medical provider if self-insured) then evaluates this claim, may require the individual to obtain a medical exam, and then decides whether to accept the claim. If accepted, the injured victim can obtain payment for their lost wages and out-of-pocket medical expenses -- I guess this means co-pays while health insurance or Medicaid/Medicare (i.e. tax payers) are actual paying for the medical expenses caused by the medical provider). Of course, the insurance company can determine any medical expense and/or lost wage is not the result of the negligence and be off the hook for payment, so one might be litigating these issues for the rest of one’s life if the injury is permanent.
No non-economic damages are paid, except for a small lump sum payment set at various rates. If someone dies, or recieves a signifcant injury, that person would receive the maximum payment $117,500 – what a deal for a lifetime of paralysis or the death of a loved one!
If a victim submits a claim under this system and then realizes they are getting screwed, he or she can reject the offer but, here’s the kicker, in court they must now prove, by clear and convincing evidence, that the medical malpractice was the result of gross negligence. This will strongly incent insurers to "low-ball" their offers under this system.
Here’s what I really dislike about this bill. There is no balancing down-side for the insurance company (or self-insured medical provider). If the insurance company thinks they can come out ahead with the early offer, they can solicit the victim into the system (or accept the claim if the victim comes forward on their own and asks to participate). However, if the insurance company feels it is more advantageous (to the insurance company) it can simply deny the claim – even if they know there was clear malpractice. There is no duty of good faith and no consequences for rejecting a claim.
How many individuals who are sitting in the hospital concerned about paying their mortgage and caring for their families are going to fall into the trap of accepting the “generous” offer to just sign a few documents and start receiving lost wages almost immediately. Later, when the victim realized they were screwed, they have no recourse (at this point there is no option to litigate in court even under the increased standard of proof).
The catch phrase of “reforming” the medical malpractice system has been long touted as “necessary” by insurance companies, hospital and doctors, all anxious to increase their own profits even if at the expense of those who have been truly injured by a medical provider. We all hear about frivolous lawsuits, but the court system already has a way to deal with these through dismissal and/or summary judgment. This bill is being touted as a way to get quick results. It may come as a surprise to some, but there is nothing in the current system that prevents an insurance company from making payments for medical bills and lost wages immediately and getting a credit on any settlement that is ultimately reached.
The Concord Monitor said in a recent editorial: "The legislation is designed to take advantage of the vulnerable, but in some ways it would hurt injured patients who turn down the insurer's offer even more. Refuse even a lowball offer, and the legal standard for proving negligence on the part of the medical provider in court automatically goes up. Patients who now must prove negligence by a preponderance of evidence would have to present 'clear and convincing evidence' of negligence. That standard is almost impossible to meet. It essentially allows insurers to negotiate with patients at gunpoint.
In 2007, O'Connell said that early-offer legislation would result in insurance industry savings of $556,000 on the average claim and more than $1 million per claim when the injuries are severe. It's easy to see why. The legislation gives insurers a cannon and injured patients a pea shooter." (http://www.concordmonitor.com/...)