Officials: Rule Changes Reduce Malpractice Suits

Two legal rule changes have reduced the number of malpractice cases filed in Pennsylvania, according to state judicial officials.

The state Supreme Court initiated a certificate of merit and a new venue rule in 2003. The certificate of merit requires attorneys to find an expert to certify that a malpractice case is justified. The goal of the certificate is to prevent frivolous lawsuits. The venue rule requires attorneys to file a case in the county where the incident occurred, instead of where the hospital system is based. Critics had argued that lawyers stretched the rule so they could argue cases in Philadelphia County, where jury awards were among the highest in the nation.

Since the rules took effect, Philadelphia’s caseload dropped by more than half – from 1,365 filings in 2002 to 559 in 2004 according to the Administrative Office of Pennsylvania Courts. Several counties in Central Pennsylvania reported similar declines. Lancaster County reported the only caseload increase, from nine filings in 2002 to 31 in 2004, the highest number of cases in five years (see shrinking caseload, below).

The Administrative Office attributes the decline in the number of cases to the rule changes, said Art Heinz, a spokesman for the courts. Overall, the Administrative Office found that malpractice case filings dropped 37 percent from 2002 to 2004. That decline has not shown up in lower premiums or insurance settlements yet, according to federal and state insurance officials.

Dr. Sambhu Kundu, 69, of Camp Hill, said he could vouch for that. The surgeon’s malpractice insurance rates will not go up next year as long as the state gives him a discount on the premiums for the states malpractice buffer fund. The fund, known as MCARE, is mandatory second-tier coverage that every doctor in Pennsylvania must have.

Kundu, a gynecologist, will pay $46,000 next year for insurance coverage instead of $58,000 because of the MCARE abatement. Although that discount helps, it still is more than four times higher than the $11,000 he paid in 2002 for malpractice coverage. The practice still carries the name Central Pennsylvania ObstetricsGynecology Inc., but Kundu stopged delivering babies in 2003 because of the high cost of insurance.

Kundu Kundu’s practice broke even last year, so he had to borrow the money for his insurance premium in 2006. His salary was less than $50,000. His employees did not get raises last year.

“The certificate of merit, venue-shopping (ban) … these are all good things, but I don’t see any relief in my practice,” he said.

Officials with the Pennsylvania Department of Insurance believe any effect the rule changes have had on medical-malpractice rates has been minimal, said Melissa Fox, a department spokeswoman.

“Given the poor underwriting results of companies that write this business, they are cautious in responding to such changes until the benefits materialize,” Fox said.

However, premiums are increasing more slowly. For example, PMSLIC insurance premiums will go up by 10.8 percent July 1. The increase compares favorably to the 15 percent increase last year and the 54 percent increase in 2003.

An independent actuary will produce a report on the impact of the legal reforms on malpractice rates to the state insurance commissioner by midsummer, Fox said. The report is required by Act 13, the medical-malpractice reform law passed in 2002.

High rates continue to be a problem for doctors and hospitals, said Chuck Moran, a spokesman for the Pennsylvania Medical Society in Lower Paxton Township.

Insurance companies paid $448 million to settle malpractice claims in Pennsylvania in 2004, or 13.5 percent more than in 2003, according to the U.S. Health Resources & Services Administration. Payments had been decreasing from a high of $424 million in 2001. The payouts include the cost of lost wages and health care expenses. The Associated Press first reported the information in March.

Pennsylvania hospitals spent $636 million – 74 percent of their net income – on medical-liability coverage in 2004, according to a report by the Pennsylvania Health Care Cost Containment Council.

The Pennsylvania Medical Society is using the findings of both reports to push for more legislative reforms, such as caps on damages for pain and suffering. The organization praised Act 13, which created a Patient Safety Authority and a medicalerror reporting system. The law also eliminated joint and several liability, a practice that forced all defendants to pay jury awards regardless of their level of fault.

Roger Mecum, the society’s executive vice president, said legislators should work on a way to mediate disputes outside the courtroom. In addition, he is pushing for limits on attorneys’ fees.

“When such a large amount of money is spent for liability- insurance coverage and diverted from patient care, there’s little doubt that priorities are mixed up,” Mecum said in a statement.

Kundu said he would like to see a federal medical-malpractice court that would handle cases nationwide. He said the court would bring some uniformity to the system.

Kundu believes bad doctors need to be punished, but he resents what he calls the litigious nature of patients. He believes he fell victim to that distrust when a patient sued him for nicking a small intestine during surgery in 1997. The woman recovered through his care, but she filed a lawsuit. Kundu said he settled the case for $200,000 last year because he did not have the resources or the will to keep fighting it after seven years.

Copyright Journal Publications Inc. Jun 10, 2005