Summary of HB 2

Based on the summaries of the legislation available to date and our preliminary review of the bill language, a summary of the situation is as follows:

Economic benefits.

The bill provides a four-year insurance rate stabilization program for physicians starting at $41 million per year, limiting their insurance rate increases to 5 percent for 2005, and probably also for 2006. It also would result in substantial additions to Medicaid for physician reimbursement both during the initial four-year period and indefinitely thereafter. During the initial four-year period, the bill would add an estimated total of $533 million, including matching federal funds. Thereafter, the bill would add about $160 million per year to Medicaid funding.

Liability reforms.

1. Expert witnesses. New provisions would require that if the defendant physician is board certified, the expert must be board certified in the same specialty as the defendant. An exception to this rule applies if the expert taught medicine in the defendant’s specialty or a related field of health care. In addition, the provisions would require that an expert have been engaged in actual practice or taught medicine in the same or similar specialty within 5 years of the date of the injury.

2. Non-economic damages reform. The cap on non-economic damages in wrongful death cases would be reduced to $812,500 from its current level of $1.625 million. In addition, for all cases the cap would be frozen at its current level of $650,000 for a period of four years, during the period when the rate stabilization program is in effect.

3. Economic damages reform. Past medical expenses would be calculated based on the amount incurred by the patient, rather than the billed amount. The bill also would codify an existing procedural rule.

4. Certificate of Merit strengthening. The current requirement that litigants must file a Certificate of Merit signed by a physician attesting to the basis for the claim, would be strengthened to require much greater specificity as to individual defendants and as to the basis for the claim or defense.

5. "Apology" law. The final bill adopted an "apology law" intended to encourage physician-patient dialogue immediately after an unexpected outcome to deter lawsuits, but an exception exists that could deter physician contact with patients.

6. Miscellaneous provisions. Several other provisions in the bill would alter procedures for malpractice claims, require mediation of cases before trial, and adopt the federal "offer of judgment" rule to encourage quicker settlements.

"Patient safety" and physician discipline.

1. Reporting of adverse events. Provisions would add fines for failure of hospitals to report to DHMH adverse events under current reporting requirements.

2. Standard of proof in physician discipline. The Board of Physicians would adopt the "preponderance of evidence" standard of proof in disciplinary actions involving alleged substandard care, instead of the current "clear and convincing" evidence standard.

Insurance reforms

The bill would require a variety of "insurance reforms," including requiring the MIA to produce a comparison guide for malpractice insurance, barring exclusivity agreements in broker contracts, creating a People’s Counsel among other provisions.