This post is part of a series sponsored by PCF Insurance Services.
In the third installment of a three-part series, PCF Healthcare Practice Leader Brian King discusses legislative changes and the impact of Assembly Bill 35.
Welcome to the third chapter of our health insurance series. In this segment, we examine a significant change in the healthcare legal arena—Assembly Bill 35 (AB 35), a landmark piece of legislation that redefined the rules of the game for healthcare professionals and their insurance policies.
Need to catch up? Check out part one and part two before continuing!
As a PCF Healthcare Practice Leader, my journey has involved a careful examination of AB 35, examining its far-reaching effects on the healthcare community. AB 35 represents a fundamental change in the way healthcare professionals need to approach their work, patient interactions and risk management strategies. Its nuances and complexities have a direct impact on the financial and legal aspects of health care delivery.
In this part of our series, we aim to unravel the complexities of AB 35, examine how it is changing the fabric of medical malpractice insurance and what steps healthcare facilities and professionals must take to successfully navigate this new environment. And while Assembly Bill 35 only affects California directly, many state legislatures have passed similar bills (see Colorado).
Understanding AB 35 and Its Ripple Effects
AB 35 represents a significant change in California's medical malpractice framework, reminiscent of changes seen in the late 1970s. The law significantly increases the cap on non-economic damages, such as pain and suffering, from the longstanding $250,000 to $350,000, rising to $500,000 for wrongful death cases. Additionally, these caps will increase progressively each year, with wrongful death rates increasing by $50,000 per year for the next 10 years, followed by a 2 percent increase thereafter. For other non-economic damages, the annual increase will be $40,000 for 10 years, followed by a 2 percent increase thereafter. (Office of Governor Gavin Newsom, May 2022)
Another important change is the allowance of different cases against different parties in the same case. For example, a medical facility can be sued for $300,000 and a doctor for an additional $500,000 in a wrongful death lawsuit, greatly increasing the amount of potential claims. This increase significantly changes the power of the case.
Additionally, AB 35 affects how much attorneys can seek in damages, allowing for a higher percentage of large settlements. This encourages lawyers to pursue more cases, which may lead to an increase in cases in the health care sector.
This practice is not found in California. States like New Mexico, Florida, Colorado and others are experiencing similar legislative changes that indicate a potential nationwide trend that could redefine the medical malpractice field.
Impact of Health Care Law Reforms on Insurance
The impact of bills like AB 35 on medical malpractice and institutional insurance is varied. AB 35 focuses on pecuniary damages, particularly non-economic damages, and can be seen as “fixing” the law. But some legal changes may force doctors to change their practices or payment methods. AB 35 marks an important milestone in its focus on the financial aspects of medical practice and litigation.
Staying Compliant with New Healthcare Standards
Health care providers should be familiar with the term “standard of care.” Take advantage of any help your insurance company can provide regarding clinical risk management. They may offer help for free. However, given the evolving legal landscape, revisiting your risk management strategies is recommended. These services are sometimes essential, especially in busy health care settings where a medical director is tasked with these tasks.
Effectively implementing the best electronic health record (EHR) systems is also important. These systems provide accurate charting guidelines, an important defense against lawsuits. Having strong risk management, whether internal or contracted, is essential. Firms like Medpro offer valuable services, including compliance conferences.
The standard of care, in essence, also depends on adhering to common practices in your area and maintaining the latest training and best practices for each procedure. Regular review of patient consent forms with your attorney and insurance carrier is important to ensure clear communication of the risks involved in any procedure.
Attention to detail in patient care and documentation is important. Missing key features can lead to significant issues, especially following a poor outcome or apparent negligence.
Future Trends in Health Care Law
As we look to the future, the actual trajectory of health care laws remains uncertain. Court interpretation and enforcement of these changes will be critical. Many insurance carriers are calling for rate increases as a result of these legislative changes, but there is a pause, particularly in California, where rate increases are met with resistance.
This disagreement led to insurance companies exiting the market, reducing competition. Although policy filings may still allow for adjustments in coverage, the lack of competition means that rates may remain the same, where underwriters may be less likely to offer discounts or “credits,” which can affect the purchase of insurance policies.
That being said, it is important not to renew insurance policies without careful review. Consulting with an insurance professional who is familiar with medical malpractice insurance to check your overall understanding and keep up with the latest legal changes is important. While it's natural to want to save costs, medical malpractice insurance is an area that requires strong coverage to help protect your business, reputation, license and legacy.
Embracing Health Care in the Wake of AB 35
As AB 35 redraws the boundaries of assessable damages for providers and their practices, it is important for healthcare providers to stay ahead of the curve, armed with information and the right insurance coverage. We have embraced this changing environment with a commitment to efficiency and safety, aiming for the highest standards of care and helping to protect the pillars of our health care system.
As we move forward into this new chapter in healthcare, remember that staying informed and prepared is key to successfully navigating these changes.
Is your healthcare profession ready for the challenges and opportunities of this new regulatory era? Contact a PCF Healthcare insurance agent to review whether you are well equipped for the future.
Source link
