MALPRACTICE FEE CAPS: BE CAREFUL WHAT YOU ASK FOR

"The less people know about how sausages and laws are made, the better they'll sleep at night." Otto von Bismark.

In response to calls for caps on non-economic damages in malpractice actions and with the hope that these caps will reduce the cost of medical liability insurance, on August 13, 2003, the Florida Legislature passed significant legislation relating to medical malpractice. Elsewhere in this newsletter, we have provided a summary of the changes the Legislature adopted to address the so-called "medical malpractice insurance crisis." In this article we want to focus on other portions of this legislation that have not received the public attention they deserve.

Perhaps the most significant of these changes involves the scheme for disciplinary proceedings over all health care practitioners ("Practitioners") licensed by the Department of Health. Before the Legislature acted, the Department of Health ("DOH") already had far reaching and extensive investigatory and prosecutorial authority. DOH provides investigative and prosecutorial services to the various Practitioner licensing boards, including the Board of Medicine. Each DOH investigative report is submitted to a Probable Cause Panel of the appropriate licensing board, which then determines whether the evidence indicates probable cause of a violation of the relevant statutes and rules exists. If probable cause is found, a formal disciplinary complaint is initiated and prosecuted by DOH.

If a Practitioner disputes any factual allegations in the complaint in many cases the matter is referred to the Division of Administrative Hearings ("DOAH"), which provides an administrative law judge ("ALJ") to conduct a hearing that is similar to a bench trial; there is no jury. The ALJ serves as both the trier of fact and the controller of the procedural aspects of the proceeding. Although the licensing board then reviews the ALJ's findings, except in unusual circumstances the boards historically have accepted the ALJ's findings of fact.

The fee-cap legislation substantially changes this process. In particular:

The determination of whether a licensee has violated the laws and rules regulating the profession, including a determination of the reasonable standard of care, is a conclusion of law to be determined by the board [DOH] when there is no board, and is not a finding of fact to be determined by an [ALJ]. 456.073(5), Florida Statutes (emphasis added).

This represents a substantial change in the due process rights available to Practitioners. Prior to this legislative change, a Practitioner has been able to present expert testimony at the formal hearing before the ALJ on the issues of what constitutes the standard N cue & a particular circumstance, and whether the factual circumstances of the case constitute a deviation from the standard of care. With this change, it is not clear whether an ALJ will even consider such testimony, as the issue is deemed to be a conclusion of law within the jurisdiction of the board. In addition, if the ALJ does consider such evidence, the licensing board now can change or modify that determination. Clearly, the due process rights of health care practitioners have been diminished substantially by this change.

A second change is also of great significance. Previously, the licensing boards were empowered to impose costs against a licensee related to the investigation and prosecution of a case. In actions in courts of law, costs are considered to include only expenses related to the litigation, and not attorneys' fees. However, many licensing boards had been attempting to impose (with varying degrees of success) the salaries of its investigators and prosecutors as costs when imposing disciplinary action against a Practitioner. The Legislature has made (dear that a licensing board may include the "salaries and benefits 0 personnel, costs related to time spent by the attorney and other personnel working on the case, and any other expenses incurred by [DOH] for the case" in calculating the costs to be imposed against a licensee. As a consequence, the regulatory boards will now be free to seek to recover the costs of the entire investigative and hearing process. These costs can exceed $50000, in addition to the costs incurred by the Practitioner in defending him/herself. This will have a chilling effect on many Practitioners who otherwise might challenge the findings of a Probable Cause Panel.

When considered together, these two legislative changes create great risk for a Practitioner who chooses to dispute DOH's allegations and proceed to a hearing. The Practitioner could prevail at the hearing before the administrative law judge only to have the findings of the judge relating to the standard of care reversed by the regulatory board. In addition, the Practitioner maybe ordered to pay additional tens of thousands of dollars in costs related to the investigation and hearing process.

DOH and the Agency for Health Care Administration ("AHCA') also have been given new authority and responsibility that will have an impact on Practitioners and facilities.

FACILITIES

Incident Reports Florida Statutes Chapter 395 requires hospitals, ambulatory surgical centers, and other facilities to file reports of adverse incidents that occur in the facilities, commonly referred to as "Code 15" reports. The legislature now will require that a copy of any civil complaint filed against a licensed hospital be provided to AHCA. That agency is then to review its adverse incident report files to determine whether the facility timely complied with its adverse incident reporting requirements. Thus, facilities face increased risk of regulatory action for failure to report incidents that the State of Florida believes are reportable incidents. In addition, AHCA is directed to conduct a review to determine whether any Practitioner is subject to disciplinary action related to the allegations contained in the lawsuit.

Facility Insured Physicians If a facility assumes liability for a Practitioner, it must report annually to both AHCA and the DOH the name and judgments entered against that Practitioner.

Safety Plans. Each facility must adopt a patient safety plan and appoint a patient safety officer and patient safety committee to promote the health and safety of patients, review and evaluate quality of patient safety measures, and assist in the implementation of a safety plan.

Notice to Patients of Incidents. An affirmative duty is imposed on licensed facilities to inform each patient, or the patient's representative, in person, of any adverse incidents that result in serious harm to the patient. The legislation provides that this notice will not constitute an acknowledgement or admission of liability, and cannot be introduced as evidence.

AHCA Review of Presuit Notices. A copy of any pre-suit notice of intent to initiate litigation must be sent to the AHCA if the complaint involves a facility licensed under Chapter 395. The Agency is required to review the complaint to determine if it involved conduct by a licensed facility that is subject to disciplinary action.

PRACTITIONERS

Profile. The practitioner profile information available to the public has been modified to require that DOH provide a summary of any complaint that had been filed against a Practitioner and the final disciplinary action imposed against that Practitioner. The profile content has also been modified to require that DOH include (i) information relating to liability actions within the previous 10 years if the claim pad exceeds the amount of $100,000, and (ii) any disciplinary action taken against a Practitioner by a hospital or ambulatory surgical center. The Practitioner is required to verify the contents of profiles submitted to them. A Practitioner who fails to verify the profile contents or correct any factual errors in the profile within 30 days is subject to a fine of up to $100 per day. In addition, he or she may be subject to additional disciplinary action. Practitioners must update any required information in the profile within 15 days of any change of information. As a consequence, we are recommending that each of our Practitioner clients review their profile (available at www.doh.state.fI.us/mqa/profiIing/) as the information required to be included in their profile has been expanded and amendments must be made within fifteen (15) days of any change in information.

Reports of Claims Physicians, osteopathic physicians, podiatric physicians, and dentists must report to the Office of Insurance Regulation ("OIR") any claim or action for damages related to the performance of professional services. Previously, these reports were made after a final judgment or settlement of the civil complaint. The reports will be made a part of the practitioner's profile within 30 days after receipt by OIR. As a result, a practitioner's profile will contain the fact that a claim of negligence has been made prior the disposition of that claim.

Obtaining Records for Investigation DOH will no longer be required W obtain a patient's consent to obtain their records from a Practitioner, or establish the previously required determination that there is reasonable cause to believe a violation occurred. DOH merely needs to attempt to obtain authorization, and if the patient refuses to cooperate or the attempt fails, it can assert that the failure to obtain patient records would be detrimental to the investigation in order to obtain the records.

Notification to Patient of Incidents. Every Practitioner must inform the patient or the patient's representative, in person, of any adverse incident that resulted in serious harm to the patient. This notification will not constitute an admission of liability and may not be admissible as evidence.

Statute of Limitations. The previously enacted statute of limitations on investigations for disciplinary actions has been extended to allow investigations of any claim for medical liability in excess of $50,000 within six years of the payment of the claim.

Informal Hearings. Previously, if a Practitioner raised a disputed issue of fact during an informal hearing, the hearing had to be terminated and a formal hearing before an ALJ conducted. This provision has been deleted. Therefore, if a Practitioner requests an informal hearing, but then disputes a factual allegation, it appears that the licensing board can continue to hear the matter.

Citation Authority. The citation authority has been clarified so that a citation for a first offense will not be considered to be a disciplinary action. The licensing boards frequently issue citations for minor alleged violations of statute or rule.

Mediation. Mediations are available only for alleged violations that have been so designated by the DOH, and then only if the complainant and the subject of the investigation agree to mediation. The type of cases subject to mediation for resolution has been expanded. However, mediation is unavailable for any case involving intentional misconduct, a standard of care violation involving any type of injury, or any case involving an adverse incident as defined by statute. A successful mediation does not constitute disciplinary action.

Financial Responsibility. The minimum amount of insurance coverage or other means to address financial responsibility requirements imposed on physicians with hospital privileges must now be met by physicians who perform surgery in an ambulatory surgical center. These limits are $250,000/$750900.

Emergency Investigations. The new legislation requires an emergency investigation of a Practitioner who has paid three professional liability claims within 60 months to determine if the physician should be disciplined.

Self Insurance. A group of 10 or more Practitioners may now self-insure.

Judges with Expertise. DOAH is required to designate at least two ALJs who will specifically preside over actions involving DO H and its boards. Each of these judges must be a member of the Florida Bar with legal, managerial, or clinical experience in issues related to health care, or be Board certified by the Florida Bar in Health Law.

These changes become effective on September 15, 2003.