Liability, Medical Error Legislation

Liability. To a physician, the word conjures the threat of a malpractice lawsuit and the reality of escalating insurance costs. But some protection may be at hand in the form of several laws recently passed by Congress that aim to relieve both threat and reality.

Hospitalists and Liability

For the time being, the majority of hospitalists are covered by their employer’s liability insurance, according to the cover article in the December 2005 issue of The Hospitalist (“A Malpractice Primer” p. 1). However, that doesn’t mean they’re unaffected by risk of malpractice suits.

Mary A. Germann, RN, MN, CHE, certified healthcare compliance officer and founder of Operations Solutions for Healthcare, Inc., a consulting firm based in Atlanta, has answered many liability questions from hospitalists and believes they are at least as worried about the issue as other physicians.

“Hospitalists tend to be concerned about their risk,” she says. “They want to know how to protect themselves. Even though they may not be ‘personally’ at risk, their medical license is still on the line."

Germann explains that hospitalists may in fact be more vulnerable to liability suits than other physicians. “In some ways [hospitalists] are more at risk because they are usually new to their patients,” she says. “They have not had the opportunity to build a relationship with a patient, and must create trust and open communications in a very short time. This weak link can increase a hospitalist’s vulnerability. Lack of information and communication is one of the biggest reasons reported that patients choose to sue.”

With this in mind, let’s take a look at current and pending legislation that will shape liability risk and claims for years to come.

The HEALTH Act of 2005

Passed into law in July of last year, the HEALTH Act (or Help Efficient, Accessible, Low-cost, Timely Healthcare Act), places multiple limits on liability claims. The law caps noneconomic damages in medical malpractice suits at $250,000 for compensating patient injury, limits attorneys’ contingency fees, and requires a finding of malicious intent to support an award of punitive damages. The law also exempts manufacturers and distributors of medical products from punitive damage awards if the U.S. Food and Drug Administration approved the product.

The Patient Safety and Quality Improvement Act of 2005

Also signed into law last July, this act establishes a voluntary, confidential reporting structure for use by physicians, hospitals, and other healthcare professional and entities. This law renders reported medical errors into confidential, privileged data and allows healthcare providers to report their medical errors under a “patient safety activity” umbrella that prohibits the information from being used in a civil action (i.e. liability case). All medical errors reported are covered by the law and not subject to subpoena, Freedom of Information Act request, or use in a disciplinary proceeding.