Oregon Legislative Update
Earlier this year, the Oregon Legislature passed Senate Bill 483, which was signed by Governor John Kitzhaber, and entitled Resolution of Adverse Health Care Incidents. The new law is intended to provide a framework for early, confidential resolution of disputes related to “adverse health care incidents.”
Loosely based on the system pioneered by the University of Michigan, SB 483 strives to reduce costs and time delays encountered by aggrieved patients who wish to assert claims for compensation. The law ostensibly provides some benefits to health care providers as well by making disputes under the new procedure exempt from reporting to state licensing boards and the National Practitioner Data Bank. A health care provider’s participation in the new dispute resolution system is entirely voluntary. The law also charges the Oregon Patient Safety Commission (created in 2003) with making rules and procedures to implement the new system, establishing quality-improvement “techniques,” and developing evidence-based “prevention practices” to improve patient outcomes. The new law applies to adverse health care incidents that occur on or after July 1, 2014.
There are potentially significant flaws with this new statute. SB 483 is an outgrowth of the desire to have meaningful tort reform that would improve our existing litigation system. However, instead of reforming the system we already have, SB 483 adds a completely new framework for resolution of health care disputes while leaving the existing system in place with no changes. Some hail this as a new breakthrough that will produce great benefits. Others see this as nothing more than window dressing that will do little to change the current tort system and will add another layer of administrative and procedural burden.
It appears the key potential advantage to patients is a streamlined system that leads to open discussion and quick resolution of claims at relatively low cost. The advantage to health care providers may be the possibility that some claims can be resolved without adverse reporting consequences and licensing board investigations. Once this law becomes effective, Physicians Insurance will assist physicians and clinics to evaluate whether to participate in this process after an adverse incident occurs. There are many important unanswered questions, and the company will work with you to make a decision in your best interests. The unanswered questions include the following:
- How will the new law impact the number and type of claims made against Oregon health care providers? Who will determine whether or not the claim involves “serious physical injury” as required by the statute?
- Is the law consistent with National Practitioner Data Bank reporting requirements? Does federal law governing National Practitioner Data Bank reports preempt state law on the same subject? Will the National Practitioner Data Bank object to the new Oregon law and assert that settlements under the new program are reportable events?
- Given the statute’s fast-track approach to dispute resolution, will lienholders, including but not limited to Medicare, be willing or able to meaningfully participate in negotiations?
- Without formal discovery, will the rules give the defense the ability to adequately evaluate a claim, such as by requiring patient cooperation in securing access to the patient’s health care information?
- How will the Oregon Patient Safety Commission create rules to implement the new system? How will the commission use information it collects about adverse health care incidents? For example, can the information be used to limit or deny hospital privileges?
- How can settlement documents be executed and enforced given the statute’s confidentiality provision? If court approval is necessary, how will that be obtained if no public legal claim has been made or lawsuit filed?
Significantly, SB 483 was the result of a collaborative effort of the governor’s office, the Oregon Medical Association, and plaintiff attorneys. Despite multiple requests to be included, neither insurance companies doing business in Oregon (including Physicians Insurance) nor the defense lawyers who represent health care providers had a seat at the table while the law was being drafted. Just prior to the legislature’s passage, members of the Oregon Medical Association (OMA) endorsed the bill with a vote that passed by a very narrow margin.
In summary, the new procedures create a framework in which a patient can put a health care provider on notice of an adverse health care incident. The notice is not deemed a written claim or a demand for payment, but can then lead to a discussion of the event. The discussion may then lead to an offer of compensation to the patient or a denial of any compensation. The patient also has the option of going to mediation. If the matter is settled at any point in the process, the new law provides that the settlement is not reportable to state licensing boards or the National Practitioner Data Bank. If the matter is not settled, the patient can still go through the conventional litigation process.
PHYSICIANS INSURANCE REMAINS ENGAGED
- We will continue the dialogue established with the Oregon Medical Association regarding its interpretation of the new statute and the recommendations it plans to give to its members.
- We will initiate a dialogue with the American Medical Association to see if it has taken an official position or has any statement to make in regard to SB 483.
- We will contact the National Practitioner Data Bank to determine its position as to whether cases resolved under SB 483 are considered “reportable events.” Specifically, we will be asking the National Practitioner Data Bank for an advisory opinion as to whether it will honor the non-reporting provisions of SB 483, or whether it objects to such provisions.
- The governor’s office consulted with several plaintiff attorneys at length as SB 483 was drafted and raised. We will seek to interview these attorneys to make sure we understand the full intent of the new law and to see if we can find areas of common ground in cases where the new procedures are implemented.
- The law provides that a task force will be appointed to evaluate the implementation of the new law and to report to the legislature regarding its findings. The task force can recommend additional legislation. We will continue to encourage the governor to include medical professional liability carriers and defense attorneys in the process as well as follow the rule-making process under way.
Learn more by reading the full text and a simplified outline of SB 483.