The Medical Malpractice Reform Act of 1985

"...WHEREAS, our present tort law/liability insurance system for medical malpractice will eventually break down and costs will continue to rise above acceptable levels, unless fundamental reforms of said tort law/liability insurance system are taken..."

With these words, the Legislature enacted the Comprehensive Medical Malpractice Reform Act of 1985. Two weeks later, on June 17th, Governor Graham signed the ninety-one page Bill with most provisions going into effect on October 1, 1985. Without a doubt, it is one of the most comprehensive and complex bills enacted in the United States to address the malpractice crises.

A number of proposals have been made over the last few years including a form of "no fault" to address malpractice incidents. Many of these would have involved a complete scrapping of the tort system. This type of reform was not undertaken. Instead, the Legislature amended portions of the present system in an attempt to balance the needs of the public and those of the physician.

Whether these reforms will solve the difficulties is the subject of considerable debate.

This article will endeavor to explain some of the more significant reforms enacted and the impact they will likely have on the practicing physician. We can begin by dividing our review into the two primary areas addressed by the Legislature.

The first concerns procedures designed to monitor the quality of health care and the second affects the manner in which malpractice claims may be processed.

Monitoring Health Care Services

The Legislature has increased the responsibility of hospitals, the Department of Health and Rehabilitative Services, the Department of Insurance and the Department of Professional Regulation in monitoring the quality of care provided by physicians.

In an effort to compel hospitals to comply with this duty the Legislature has changed their responsibility with regard to disciplining staff members. Under the prior law, a hospital was authorized to discipline a staff member if that member's conduct was found to fall within several delineated categories. The new law requires that the hospital either suspend, deny, revoke or curtail the staff privileges of a member, or reprimand, counselor require education of that staff member once it is determined that anyone of a number of grounds exist, including the following:

1. That the member has been found liable for medical negligence or malpractice involving negligent conduct by a court of competent jurisdiction.
    
2. That the member has one or more settlements exceeding $10,000 for medical negligence or malpractice involving negligent conduct by the staff member.
    
3. That the member is mentally or physically impaired and said impairment may adversely affect patient care.
    
4. That the member has been found liable for medical negligence or malpractice involving negligent conduct by a court of competent jurisdiction.
    
5. That the member has one or more settlements exceeding $10,000 for medical negligence or malpractice involving negligent conduct by the staff member.
    
6. Medical negligence other than specified in paragraphs 4 or 5 above.
    
7. Failure to comply with the policies, procedures and/or directives of the risk management program or any quality assurance committee of any licensed facility.

In recent years there has been concern among members of peer review committees as to whether they could be personally liable when making decisions concerning the staff privileges of a fellow physician. In an attempt to encourage physicians to participate in the peer review process, the Legislature has afforded them increased immunity from suit. The law, as it now reads, provides that unless the participant acts with intentional fraud he cannot be held liable. In addition, anyone who wishes to file such a suit is responsible, should he lose, for the attorneys' fees and costs of those he sued. One caveat is that this law may not affect a physician's right to bring an action in federal court for violations of the Anti-Trust Act or his civil rights.

The responsibility of the Department of Professional Regulation has also been increased. This is triggered when they receive information that a physician has had three or more claims in a five-year period resulting in payments of $10,000 each. The five-year period includes the three years prior to this Act. Under these circumstances they will investigate the occurrences and determine if action by the Department is warranted.

This raises the question as to how information is transmitted to the Department of Professional Regulation. Providers of medical malpractice insurance coverage will now report to the Department of Insurance the final disposition of all claims for damages alleged to have been caused by medical malpractice. The Department of Insurance will screen these reports and send to the Department of Professional Regulation copies of reports for physicians having three or more claims with indemnities of $10,000 or more each within the appropriate time period. In addition, hospitals and HMO's are now required to provide to the Department of Health and Rehabilitative Services, on an annual basis, a summary of all incident reports resulting in injury to patients.

Finally, physicians will be required to carry medical malpractice insurance as of January 31, 1987. As a condition of licensure in this state a physician must be insured in the amount of $100,000 per incident and $300,000 in the aggregate per year. This is increased to $250,000/$750,000 as a precondition of hospital staff membership.

Medical Malpractice Claims

Significant revisions have also been effected in the procedures by which plaintiffs may bring medical malpractice claims. These are designed to eliminate frivolous claims and encourage the early settlement of meritorious claims.

The Legislature has provided that a plaintiff must notify each prospective defendant in writing at least ninety (90) days before a suit may be filed. During this ninety days a pre-suit screening process occurs. The defendant, through his insurer, is entitled to information which he might have obtained later in formal discovery. They are also entitled to have a screening or medical panel interview the plaintiff and the plaintiff must, if requested, submit to a physical examination.

At the end of the ninety days, the defendant and his insurance carrier have three options. They may reject the claim in which event the plaintiff may then file suit. They may make a settlement offer, which if rejected, would result in the plaintiff filing suit. Finally, they may admit liability and offer to arbitrate the amount of damages. If the final option is selected, the results of the arbitration are binding on the parties. It is interesting to note that even if the parties do not agree to a pre-suit arbitration, the judge may order the parties to participate in a non-binding arbitration. The Legislature apparently felt that this could assist the parties in identifying those cases in which one or the other had improperly evaluated his case.

If suit is filed, the Complaint must contain a certification of the plaintiff's attorney that he has conducted a reasonable investigation which has given rise to a good faith belief that grounds exist for an action for each named defendant. If the court later determines that such certificate was not made in good faith and that there was no justifiable issue with regard to the health care provider, the attorney faces sanctions. The court will award attorneys' fees and costs against the attorney who brought the action and submit the matter to the Florida Bar for disciplinary review of the attorney. By placing this burden on the attorney it is hoped that a more thorough review will occur which should discourage frivolous actions.

Another difficulty encountered by physicians is that experts retained by the plaintiffs to testify against them are at times not really qualified in the area of medicine pertaining to the case. The law, as modified, further restricts those individuals that may testify against a physician. The witness must be a similar health care provider. If not, he must demonstrate to the court that he has sufficient training, experience and knowledge resulting from practice or teaching within the five years prior to the incident in the specialty of the defendant or in a related field of medicine. It should be apparent to trial court judges that the clear intent of the Legislature is to allow testimony only from witnesses who know the prevailing professional standard of care for the case at issue.

The Legislature also turned its attention to the apportionment of damages. A great deal of publicity has surrounded the theory of "joint and several" liability. Under this theory, if two or more defendants are found negligent, then the plaintiff has the option of collecting the entire amount from either. The defendant, who has then paid more than his share is left with the burden of collecting the excess from the other defendant. At times this caused an inequity among the defendants. Under the new law entitled "contributory fault," if two or more defendants are found negligent, the plaintiff has the burden of attempting to collect from each defendant that portion of the judgment equivalent to his proportion of the guilt. Even if a defendant is uninsured or underinsured, the plaintiff must still attempt to collect against his personal assets. Only if he has made that attempt in good faith and failed, may he then turn to the other defendants to collect the remainder of the judgment.

Finally, the Legislature addressed the question of attorneys' fees. In recent years a number of cases have been determined which appeared to allow a fee to the attorney which was out of line with the circumstances. The new Act prohibits excessive fees. It does, however, recognize the value of the contingency fee system in providing a method by which the citizens of the state are able to seek access to the courts regardless of their own resources. In attempting to strike a balance, the Legislature determined that until the Supreme Court adopted specific guidelines, it would establish a schedule of fees which, although not mandatory, would be presumed reasonable. For cases where the recovery is up to $2,000,000 the schedule slides between fifteen percent and forty-five percent, depending on when the matter is resolved. For that portion of a recovery beyond $2,000,000, the reasonable multiplier is presumed to be fifteen percent.

As noted at the outset, this Bill encompasses ninety-one pages. In addition to the areas discussed, it addresses risk management, licensure, the standard of care, structure of damage awards, punitive damages and other procedural matters. It is apparent that the Legislature is gravely concerned. Will these reforms solve our problems? Only time will tell. There will certainly need to have periodic reviews and refinements. With such continued effort, we will hopefully move towards a resolution.