Monthly Archives: December 2013

PPACA Contraceptive Coverage Challenge

On Tuesday, November 26, 2013, the Supreme Court granted certiorari to review portions of the Patient Protection Affordable Care Act requiring employers of a certain size to offer insurance coverage for birth control and other reproductive health services without a co-pay.  In enacting the Affordable Care Act, Congress required large employers who offered health care services to provide a range of preventative care, including no-copay contraceptive services.  However, religious nonprofits were exempted from this requirement, but not for-profit corporations. (NPR) The case will present the issue of whether private companies can refuse to provide coverage for birth control and contraceptives on the basis that it violates their religious beliefs. (CNN)  The case will be heard in the country’s highest court as a result of approximately 50 pending lawsuits filed in federal court by a variety of corporations challenging the coverage benefits under “Obamacare.”  (CNN)

This case will be the first challenge to reach the Supreme Court since it upheld the Affordable Care Act 17 months ago in a 5-4 decision written by the Chief Justice.  (National Federation of Independent Business v. Sebelius)  Beyond that milestone, the recent challenge is significant because it will answer a question with far-reaching consequences — can corporations pray? (USA Today) Hobby Lobby, an Oklahoma City corporation, believes the answer is yes.  In fact, the company closes on Sundays, funnels millions of dollars in profits to ministries, does not sell shot glasses in order to avoid the appearance of promoting alcohol, and does not provide insurance coverage for drugs or devices which it claims are capable of terminating a pregnancy.  (Hobby Lobby Website)

The 10th U.S. Circuit Court of Appeals agreed with Hobby Lobby. It said that the 1993 Religious Freedom Restoration Act protects corporations the same way it protects individuals, ruling that “the contraceptive-coverage requirement substantially burdens Hobby Lobby’s rights under” the law.  (FOX News) The Obama Administration, in its Supreme Court brief, argued that the 10th Circuit was incorrect, and that if the ruling were allowed to stand, it would make the law “a sword used to deny employees of for-profit commercial enterprises the benefits and protections of generally applicable laws.” (FOX News) Furthermore, the Administration and Justice Department point to a long line of Supreme Court cases that have not found a for-profit company to be a religious organization for purposes of federal law. (NPR)

Women’s rights advocates, such as Planned Parenthood, released statements in light of the Supreme Court’s grant of certiorari, expressing that if the Court were to rule in favor of for-profit corporations, that the decision would “create a very slippery slope, giving for-profit employers their own right to impose medical preferences on their employees.” (Planned Parenthood)

All of these views, and more, will undoubtedly be on display when the Court hears the oral arguments that will likely be held in March, with a ruling by late June 2014.  (Politico) Regardless of the Supreme Court’s decision, the nation will be paying attention because the decision is not only important in the context of the Affordable Care Act, but will also answer the question of whether these companies can assert religious freedoms, which will have importance for decades and centuries to come.  (US News)

 

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Medical Malpractice Law and the Changing Healthcare Landscape

Proponents of tort reform are considering asking Congress to revive the Republican-created Help Efficient, Accessible, Low-cost, Timely Healthcare (HEALTH) Act, which died in committee in 2011. (GovTrack)  Supporters say that the Affordable Care Act (ACA) did not go far enough to reform the tort system.  (Politico)  The revived HEALTH Act, among other things, would institute a $250,000 federal cap on damages gotten from medical malpractice cases.  A federal cap would please insurance companies and many doctors because it would decrease their liability to pay when patients successfully bring a civil action.  Patient advocacy groups and many lawyers would be unhappy because such a cap would prevent patients from being able to collect high sums of money for emotional claims and would hurt the bottom lines for many medical malpractice lawyers.    Some opponents to caps on damages even suggest that large jury payouts may help make patients safer by holding doctors and healthcare facilities responsible for their care.  (Forbes)

Aside from a $50 million total allowance to experiment with alternatives to the medical liability system on the state level, the ACA does not make any change or reform to the existing tort system. (Politico)  In spite of losing the battle over tort reform in ACA negotiations, proponents of tort reform have once again called for a $250,000 federal cap on noneconomic damages and shorter statutes of limitation.  (AMA)  If supporters of caps can convince the Republican Party to revisit the HEALTH Act, tort reform could become a major political issue in the near future.  Regardless of whether a federal cap is instituted or not, the implementation of the ACA will change the way the healthcare system works as a whole, and therefore will affect the role of litigators within the system.

So what is the future of tort reform in the medical malpractice system?  The short answer is that nobody knows—yet.  The industry is already evolving, as states enact provider liability shields, damages caps, and no-fault funds to pay victims of medical malpractice.  (Harvard)  But predictions about whether claims will increase or decrease under the ACA vary widely.  There are two irreconcilable schools of thought: those who think that the number of claims will increase as the number of people using healthcare services increases, and those who believe that fewer patients will need to bring claims because their insurance will cover their expenses.

If The Number of Claims Decreases Under the ACA: 

Medical malpractice lawyers would face challenges if the number of claims decreases.  Litigators are already forced to use profitability as a major factor when considering whether or not to take on a case.  Often, if the amount of profit predicted at the verdict is less than the amount it would take to try the case, the case is deemed not viable for trial.  The amount of realized profit from a case with a huge award may not be very much if the lawyer had to spend a lot of money to try the case.  The practice of taking the highest-paying cases in favor of lower paying ones is troubling because it leaves clients who have a potentially viable claim without options.  If the number of claims decreases, medical malpractice lawyers will have to choose their cases more carefully than ever, and choose from a potentially less profitable pool.   (CNN)

Compounding this problem is the practice of placing state caps on non-economic damages, which has grown in popularity over the last decade, is hurting the litigators who must pick and choose their cases and the clients with less profitable cases.  Along the same vein as state caps, many support the implementation of a federal damages cap.  There are many potential benefits to a federal damages cap, the most obvious being that doctors would not have to worry about going bankrupt after a medical malpractice case, and could practice medicine without that fear looming over them.  But a federal damages cap could also effectively shut down the medical malpractice tort system if it prevented attorneys from collecting money necessary to pay for the case out of the case’s award.  Unless an alternative system was put in place, this could prevent patients with small claims from securing representation at all.

If the Number of Claims Increases Under the ACA: 

Courts have faced the overcrowding of claims issue for decades, and adding 20-40 million potential new plaintiffs may compound the problem.  As one litigator points out, “The more people you have accessing medical care, the greater the potential incidence of medical mistakes in which injuries or death occur.”  (PR Newswire)

While the fear of further court backlog is valid, there are possible positive aspects of an increase in claims.  For medical malpractice litigators, more complaints mean more choice in which cases to take on.  Currently, many lawyers choose their cases based on how much money they are predicted to bring in.  Having more clients coming to litigators can be a great thing.  Lawyers who currently turn down small-profit cases could take them on if they had other larger cases whose payouts would act as a sort of ‘insurance’ policy for the smaller cases.  Cases with large profit margins could potentially pay for otherwise not-viable cases.  This gives the lawyers trying those cases more freedom to choose the cases that appeal to them both intellectually and financially, rather than relying on only one of those criteria.

Conclusion:

Of course there is the possibility that, as the ACA is implemented, the number of medical malpractice claims stays relatively unchanged.  However, the tumultuous nature of healthcare law makes it unlikely that nearly any aspect of medical care will stay the same.  As one journalist phrased it, when discussing malpractice insurers, “[a] new healthcare world is emerging, and malpractice [lawyers] are going to have to figure out a way to profitably live in it.”  (Property Casualty)

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