Why the state Supreme Court and General Assembly may go head-to-head over medical malpractice rules

By: - February 27, 2019 6:29 am

House Majority Leader Bryan Cutler speaks out against the proposed change in state medical malpractice rules at a Jan. 30 rally in the Capitol (Capital-Star photo).

Where you can and can’t file a medical malpractice lawsuit is shaping up to be a partisan battle between Pennsylvania’s legislative and judicial branches.

On one side you have the state Supreme Court, which may once again allow lawyers to file suits in the county of their choosing. That rule was changed more than a decade ago in the midst of “a medical malpractice crisis.”

On the other there’s the state’s medical industry and Republican lawmakers, who fear a return to venue-shopping for big payouts. House Speaker Mike Turzai, R-Allegheny, called the high court’s proposal “an invitation to a constitutional fight.”

The issue, then

Here’s what everyone can agree on: In the late ‘90s and early 2000s, Pennsylvania had a problem with soaring malpractice insurance rates.

The total premiums health care providers paid increased by a third in just four years — from $278 million in 1998 to $371 million in 2001 — according to a 2003 Pew study.

The increases meant doctors — especially specialists like OB/GYNs — were leaving the state, according to Jeff Bechtel, senior vice president of health economics and policy for the Hospital and Healthsystem Association of Pennsylvania, an industry trade group.

That’s where the agreement ends.

Talk to the medical community, and they say the rules of the game were the issue. Lawyers across the state were taking their cases to Philadelphia and trying them in front of juries who awarded big payouts.

On average, according to state court data, 44 percent of state medical malpractice cases were filed in Philadelphia between 2000 and 2002.

Plaintiffs in those Philly cases were also more likely to end up with money in their pockets. Out of 407 cases resolved by juries between 2000 and 2003, 166 — or a little more than 40 percent — ended in cash payouts. Eighty-three of those cases ended with $1 million or more awarded.

Allegheny County saw 147 jury decisions during the same time period. Plaintiffs won cash awards in just 19 percent of those decisions.

“Philadelphia was an extreme outlier,” Becthel said.

But plaintiffs’ lawyers, like Cliff Rieders, a former president of the state trial lawyers association, points to a different explanation.

He said the price spike for doctor’s liability insurance came from a collapse of some of the state’s biggest insurers at once — four, according to Pew — and increased reliance on smaller firms with higher prices.

“Eighteen years ago, you had no insurance market,” Rieders said.

A (temporary?) solution

In response, the General Assembly passed the MCARE Act in 2002 to try and slash the number of malpractice suits.

One change let doctors pay into a new, state administered insurance plan. The act also created a commission that suggested limiting aggrieved patients’ suits to the county where the incident happened.

After the Legislature passed the law, the trial lawyers, led by Rieders, sued. The state Supreme Court found changing court rules was outside the powers of the Legislature and struck the law down.

But the Supreme Court agreed to voluntarily — and at least temporarily — limit the location where aggrieved patients could file their lawsuits as a “tip of the hat” to the legislature, according to Rieders. The rule went into effect in 2003.

Since MCARE and the court rule change, state medical malpractice cases have fallen 47 percent, from an average of 2,733 a year between 2000 and 2002 to 1,449 in 2017.

In the first year alone after the new rule was instituted, 1,000 fewer cases were filed.

The issue, now

A decade-and-a-half later, in December 2018, a Supreme Court panel known as the Civil Procedure Rules Committee floated proposed regulations to get rid of the rule.

The committee is made up of 13 lawyers appointed to six-year terms, who aid in the “preparation, revision, publication, and administration of the rules of civil procedure.”

Lawyers and judges — including the Supreme Court justices — can make suggestions to the committee. After review, public comment, and approval, the state’s seven Supreme Court justices have a final say in adopting rules.

Pennsylvania’s medical establishment opposes the change, fearing a return to the bad old days. That could increase malpractice insurance rates, drive away doctors, and cut into care — especially in the state’s rural areas.

The hospital association’s Bechtel said the consolidation of the state’s health care industry would make it even easier for lawyers to “venue-shop,” or seek plaintiff-friendly destinations that offer big payouts.

Rieders countered that venue shopping is already possible in other industries. If a person is involved in a crash with tractor-trailer in Montour County, they could sue the company at its headquarters in, say, Lancaster, he said.

“Tell me why there should be an special exception just for the medical industry?” he asked.

If the case takes place in a small county where the health care provider is a top employer, it only further stacks the odds against a victim seeking justice, he added.

Citing data from the the state Patient Safety Authority, Rieders also claimed “unanticipated events” during medical care has more than tripled since 2004.

Last year, more than 300,000 medical incidents were reported to the PSA, a state agency charged with keeping track of medical missteps to improve care.

But Regina Hoffman, a former nurse and executive director of the PSA, said the increased number had more to do with additional reporting by state medical professionals than increased errors.

“It’s disheartening to me to see the numbers used the way they are,” Hoffman said.

In fact, she said serious harm from medical mistakes or complications has fallen, from 727 incidents in 2005 to 445 in 2017, according to authority data. She defined serious harm as death, near-death, or permanent harm.

The politics of donations

Why is this a political football? So many reasons.

As reported by Forbes, the Philadelphia Trial Lawyers’ Association political action committee spent millions on electing the state’s current Democratic Supreme Court majority in 2015. The PAC dropped more money to bring the majority to 5-2 in 2017.

Forbes’ reporting also showed that five members of the court committee proposing the venue change work at Philadelphia malpractice firms. These same firms’ lawyers contributed half a million dollars to the trial lawyers’ PAC.

The Committee for a Better Tomorrow, run by Philadelphia trial lawyers, is a big money player in state Democratic politics. The group donated almost a million dollars to Gov. Tom Wolf during his 2018 reelection campaign.

Not that the money doesn’t flow the other way. The Hospital and Healthsystem Association has given $243,000 to state Republican candidates since 2016. Another group vocally opposed to the change, the Pennsylvania Coalition for Civil Justice, includes organizations like the PA Chamber and the state chapter of the National Federation of Independent Businesses.

What’s next?

After rallying at the state Capitol with a dozen white-coated doctors, legislative Republicans took action.

The Senate passed a resolution from Sen. Lisa Baker, R-Luzerne, on Feb. 5 to have the bipartisan Legislative Budget and Finance Committee study the potential impact of a rule change on health care in Pennsylvania.

A week after the study passed, the state Supreme Court told Republican leadership it would delay a decision on the rule change until after the study is released.

The study vote fell along mostly partisan lines, 31-18, with three Democrats joining with Republicans to authorize the deeper dive.

Senate Minority Leader Jay Costa, D-Allegheny, defended the “no” vote and advocated for the rule change in a letter with House Minority Leader Frank Dermody, D-Allegheny.

“Not only do fairer procedures for the filing of lawsuits allow victims of medical malpractice to obtain justice, they oblige hospitals to continually strive for better patient safety,” the letter reads.

The study must be released by Jan. 1, 2020.

Republican Policy Chair Donna Oberlander, R-Clarion, doesn’t want the court to wait that long. Instead, it should reject the rule change now “to preserve Pennsylvania’s robust health care system.”

“Further, we ask the court to not repeal the venue rule in the future because the venue rule represents the right public policy for Pennsylvanians,” she said in a statement.

Lawmakers on both sides of the aisle agree that changing the rule is up to the Supreme Court, and the Supreme Court alone — setting up a fight of powers that Turzai warned of.

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Stephen Caruso
Stephen Caruso

Stephen Caruso is a former senior reporter with Pennsylvania Capital-Star. Before working with the Capital-Star he covered Pennsylvania state government for The PLS Reporter.