Executive Summary of Proposed Florida Legislation

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1 EXECUTIVE SUMMARY Executive Summary of Proposed Florida Legislation Florida House Bill 1233 / Senate Bill 1588, the Patient Compensation System sponsored by Rep. Jimmy Patronis, R-Panama City, and Sen. Alan Hays, R-Umatilla

2 BILL OVERVIEW The bill replaces the costly, slow, and arbitrary system of medical malpractice civil litigation with an administrative system that is focused on expediency and fairness. As compared to previous reform efforts that have been oriented solely towards the reduction of medical malpractice insurance rates, this proposed administrative system the Patient Compensation System is multi-dimensional in its focus on the reduction of the cost of defensive medicine and an increase in true patient access to justice. It is these goals that prior efforts have utterly failed, and in which the Patient Compensation System will succeed. Scope The bill will provide compensation to a patient for a medical injury that would have been avoided under the care of an experienced practitioner under the same circumstances (lines *). Rationale: As referenced in the legislative intent (lines ), the medical injury standard is positioned above no fault, but below negligence. This standard will compensate more patients as compared to a negligence standard, and is compelled by legal precedent that requires the provision of greater rights to the patient to justify a restriction in access to the court system. In addition, the use of the term medical injury was chosen instead of avoidable harm to avoid the implication that the Patient Compensation System (PCS) is a fault-based system. Providers covered by the bill include all individual practitioners and facilities that are currently covered by medical malpractice insurance, such as hospitals, ambulatory surgery centers, nursing homes, physicians, nurses, dentists, and chiropractors (lines ). Rationale: The PCS is intended as a comprehensive solution to address the cost of defensive medicine and patient access to justice. Without complete participation of all relevant practitioners and facilities, the benefits of the system will not be fully realized as omitted providers may be subjected to ever increasing litigation.

3 Governance The PCS will operate independently of any state agency, and will be governed by an eleven member board, whose members will serve 4 year terms. The board members will be chosen by the Governor, the President of the Senate, and the Speaker of the House of Representatives, and will represent the medical, legal, patient, and business communities (lines ). Rationale: The PCS is governed independently by appointees so that the purpose and mission of the PCS is not adulterated over time by unappointed agency staff. A regular rotation of appointments by the executive and legislative branches of government will ensure accountability in the operation of the system. Within the PCS, three offices are established: the Office of Medical Review, the Office of Compensation, and the Office of Quality Improvement. The Office of Medical Review is House Bills 1233 and 1235, the Patient Compensation System responsible for the investigation and evaluation of applications; the Office of Compensation is responsible for the allocation of compensation for each application; and the Office of Quality Improvement is responsible for the development of best practices based on a regular review of data culled from applications (lines ). Rationale: The office structure allows the board to make important, high level decisions while the day-to-day operations are delegated to the offices. This delegation will improve the efficiency of the PCS operations, while ensuring that service on the board is practicable for busy practitioners.

4 Filing and Evaluation of Applications An applicant will file an application to request the investigation of an alleged occurrence of a medical injury (lines ). Rationale: The use of the terms applicant and application (lines ) were chosen to distinguish this system from an adversarial, litigation system, wherein claimants file claims. This terminology also arguably means that applications resolved under this system will not be reported to the National Practitioner Data Bank (see lines ), an important issue for physicians. Each application will be initially reviewed by the Office of Medical Review within 10 days of filing to determine whether, on its face, the application constitutes a medical injury (lines ). Rationale: The initial review will function as a screening mechanism for applications that do not present a valid case of medical injury. If the Office of Medical Review determines that the application constitutes a medical injury, the relevant provider will have 15 days from the date of notification to support the application (lines ). If a provider supports the application, the review process will be expedited (lines ). Rationale: Allowing a provider to support an application will increase the expediency of the process. Moreover, the PCS is not an adversarial system and as a result, providers should be willing to support legitimate applications. If a provider does not support an application determined to constitute a medical injury, the Office of Medical Review will conduct a thorough investigation of the application. After completion of the investigation, an independent medical review panel will review the information gathered by the office to determine the existence of a medical injury (lines ). The independent medical review panel will be

5 composed of at least 3 panelists, and may review multiple applications at the same time, as appropriate (lines ). Rationale: The Office of Medical Review will conduct the initial investigation so that the busy practitioners who serve as panelists are able to efficiently review each application. There will likely be multiple independent review panels operating at the same time, although the intent is for each panel to review related applications at one time, when practicable. Determination of Compensation If the Office of Medical Review determines that an application constitutes a medical injury, the Office of Compensation will determine an award of compensation in accordance with a predetermined compensation schedule (lines ). The compensation schedule will be developed so that projected cost of medical practice does not exceed the prior year cost of medical malpractice, and payments for each injury must not be less than the average payments reported by the Physician Insurers Association of America (lines ). Rationale: The compensation schedule is capped at the prior year cost of medical malpractice for all practitioners so that the increased number of applications do not result in increased medical malpractice premiums for providers. This cap and the linking of individual injury payments to national data (the Physician Insurers Association of America) are intended to provide predictability so that insurers can accurately price premiums under this new system.

6 Right of Appeal An applicant may generally appeal a determination of the Office of Medical Review and the Office of Compensation (lines ; lines ). The provider may appeal a determination of the Office of Medical Review (lines ). An appeal will be initially handled by an administrative law judge, and only for the purpose of determining whether the proper processes were followed (lines ). The decision of the administrative law judge may be further appealed to the District Court of Appeal (lines ). Rationale: Appeal rights are included to ensure that the proposed system does not violate an applicant s or provider s due process rights (i.e., the opportunity to be heard ), and also to ensure that there is an opportunity for an external review of the operations of the system. Administrative Costs The administrative cost of the PCS will be funded by a contribution amount determined for each provider (lines ). A provider who does not timely pay the contribution amount will be subject to discipline by the appropriate agency or regulatory board (lines ). Rationale: A provider contribution avoids the complexities of other financing options and will apply to all providers, regardless of whether they are insured or self-insured. The contribution pays only for the expenses of the system, while payment of awards will be made as they are today by the insurer or, for self-insured providers, the provider.

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