THE BLOG
06/04/2016 07:43 am ET Updated Jun 05, 2017

The Affordable Care Act and Medical Malpractice Reform

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The goals of health care reform are to ensure that everyone has access to high quality care and the care is affordable. Most providers believe that significant cost savings would be realized if there was meaningful tort reform. In fact, when the Affordable Care Act (ACA) was being crafted, there were numerous discussions relating to the limitation of future damages for patients injured by medical negligence, modification of the collateral source rule, and funding to the states for experimentation on litigation alternatives or substitutes.

Unfortunately, the only part of the ACA relating to malpractice reform to be passed was section 10607 of the Act which, "authorize[s] the Secretary of Health and Human Services to award demonstration grants to states for the development, implementation, and evaluation of alternatives to current tort litigation." This section does not eliminate malpractice litigation; it will only look at alternative ways of resolving the cases. The risk to providers remains. Malpractice coverage will still be required to practice and losses can be catastrophic. Even if a verdict is within the limits of the coverage, the provider who is found liable will be reported to the National Practitioner Data Bank which could have significant detrimental consequences if he wants to move to a new practice or when his privileges are up for renewal at his current location.

With mandatory health insurance or Medicare and Medicaid, it was hoped that the 30 million uninsured in the country would be covered. With a ban on lifetime payout limits and a prohibition on insurers from excluding patients with pre-existing conditions, the duration of coverage was also significantly increased. With more patients covered and covered for a longer time, it is foreseeable that more malpractice claims will result.

Despite the passage of the ACA, physicians and other health care providers continue to practice "defensive medicine" in hopes of better defending or even preventing future malpractice claims. By ordering more tests and doing more procedures in hopes of covering all the bases and not missing any significant diagnoses, the goal is to avoid any future litigation; the extra procedures and tests may not be in the patient's best interests and some may even be harmful, but it was thought they would allow for an easier defense if faced with a claim.

There are several mandates under Obamacare which require significant expenditures on the part of health care providers. These expenditures have led to increased overhead costs which many, if not most, private practitioners are not able to meet. As a result, many providers are joining health care groups or hospitals whereby they become employees. The groups take care of the overhead costs and the providers are paid a salary.

One of the results of this practice model is that outpatient care and inpatient care is being divided. Patients are no longer the responsibility of a single practitioner. They may see a family practitioner in the office setting, but in-patient care will be provided by a hospitalist who has not yet had the opportunity to form a physician-patient relationship. The lack of this attachment is more likely to result in some animosity, especially if the hospital course does not go well. It cannot be good if the patient is viewed as a customer of the hospital as opposed to a person which the physician has gotten to know well.

When a physician becomes an employee, they are expected to follow guidelines and protocols many of which were approved by Medicare. If the physician is able to meet certain benchmarks outlined in Medicare, they will be rewarded with a share of the savings. Failure to follow these guidelines can lead to economic penalties; the provider is faced with a dilemma--do what he feels is best for the patient or face decreases in pay and, perhaps, even the loss of his job.

If the patient suffers harm, a medical malpractice suit is likely to follow. Then there is the issue of malpractice premiums. If the employer is paying the premiums, will the lawyer hired to defend the case be answerable to the employer or the physician? If this is not spelled out in the employment contract, the physician may need to hire his own attorney to be sure his interests are protected in the suit. This can be a significant expense.

The physician is caught in the middle. Too bad! The jury will not be sympathetic to the economic chains attached to the practice. The jury expects the physician to use his best medical/surgical judgment at all times. The standard of care is unchanged under the ACA; the physician will be expected to do what a reasonable physician would do if faced with the same or similar circumstances. I do not believe that economic considerations will be entertained in this analysis.

It looks like the ACA has created a health care environment where it is more likely for the provider to be the target of a malpractice suit. Although alternative forms of resolution will be investigated, the target will remain the same. Tort reform will likely be a slow process handled by the states. Physicians will vote with their feet. They will not stay where their financial well-being is at increased risk.

Dr. Weiman's website is www.medicalmalpracticeandthelaw.com