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Focused risk management battles tort reform storm


When the medical malpractice insurance market came crashing down and premiums skyrocketed a decade ago, physicians began to focus on the cost of medical malpractice lawsuits.

Key Points

When the medical malpractice insurance market came crashing down and premiums skyrocketed a decade ago, physicians began to focus on the cost of medical malpractice lawsuits. Aggressive lobbying efforts in many states led to successful tort reform, including caps on non-economic damages and limits regarding who could testify as experts in medical negligence cases. Risk management also was high on every practice's list of priorities.


Plaintiffs' attorneys have worked to erode other tort reform provisions, too. In New Jersey, a medical malpractice lawsuit cannot be filed without an accompanying affidavit of merit (AOM), essentially a certification from a doctor stating that no justification exists to bring a lawsuit against another physician. Formerly, the doctor signing the AOM had to be board-certified in the same specialty and subspecialty (if applicable) as the defendant, and the AOM had to be filed no later than 120 days after the lawsuit was filed. A recent court decision, however, relaxed the physician-related requirement, holding that a doctor who signs an AOM need not be in the same specialty as long as he or she practices in a specialty that relates to the facts of the case. The New Jersey Supreme Court, in another case, is now debating whether the 120-day rule can be enforced if the parties have not had a case management conference.


As physicians lose political ground and court battles, practices should not lose their focus on internal risk prevention methods. When insurance premiums were punitively high, practices were forced to focus on risk management to mitigate or avoid lawsuits. With premiums down, the urgency of continuing these efforts can diminish. Setting up sound policies and procedures-and continuing to adhere to them-is as important as ever, however. If these efforts wane, malpractice cases could increase in frequency, the insurance market cycle could turn again, and premiums could skyrocket again.

Good risk management continues to center on good documentation. Many cases are lost simply because charts are not properly documented. One area of particular concern is the lack of documented informed consent. Comprehensive (and signed!) consent forms often can be the deciding factor in whether a plaintiff brings a case. Complete documentation also can prevent the "he said/she said" cases that so often are decided in favor of the plaintiff.

Another area that should receive constant attention is patient screening. Physicians concerned about the cost of insurance coverage and the risk of lawsuits can restrict the types of patients they will see and the types of cases and/or procedures they will perform. But when their economic focus shifts from expense to revenue, physicians may become less selective. Possible red flags include patients who present with complications from prior surgery, those "shopping" for opinions, and patients who push for a treatment or a procedure that is medically questionable.


On a brighter note, the traditional insurance market once again is fiercely competitive; having to settle for coverage with companies that emerged during the crash-and that have poor reserves or limited claims experience-largely has ended. Many large health systems already have moved away from "alternative risk" models and have made prudent moves within the traditional market to shore up coverage well into the future. Practices that ignore well-financed, high-quality insurance coverage, when available, do so at their peril.

When the market cycle turns, cries for tort reform will grow louder, political action will become stronger, and sound risk management principles will return to the forefront of medical practices. In the meantime, the best strategy for most practices remains focused risk management.

The author is a co-founder and partner of Argent Professional Insurance Agency in Warren, New Jersey. Malpractice Consult deals with questions on common professional liability issues. Unfortunately, we cannot offer specific legal advice. If you have a general question or a topic you would like to see covered here, please send it to medec@advanstar.com

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