Legislative Update: SB4 – Medical Review Panels

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According to the National Practitioner Data Bank, Kentucky reported an average of 269 payments each year from 2011 through 2015. This number includes all payments arising out of written malpractice claims, including settlement payments and jury awards. To healthcare practitioners, these numbers are not insignificant, nor are they unique to the Commonwealth.

Several states have enacted “tort reform” to stem the flow of medical malpractice claims. For example, Indiana enacted tort reform in 1975, instituting “medical review panels” and caps on damages. This year, members of the Kentucky Legislature propose that our state follow Indiana’s lead.

Enter Senate Bill 4. Entitled “AN ACT relating to medical review panels,” SB4 is sponsored by Senator Ralph Alvarado, R-Winchester, who is a licensed internist. If enacted, the bill will establish “medical review panels” to evaluate the merits of proposed malpractice complaints before suit can be filed in court. This article provides a broad overview of SB4 as it is currently written. While changes to the bill may yet occur, its core provisions will likely remain the same.

SB4 applies to all lawsuits arising out of healthcare or professional services that were, or should have been, provided by a healthcare provider to a patient. The bill defines the term “healthcare provider” to include individual providers, practice groups, hospitals, nursing homes, and agencies, as well as the administrators, officers, directors, agents, and employees of any healthcare practitioner or entity. The bill covers all causes of action arising out of the provision of medical care including negligence, wrongful death, informed consent, battery, breach of contract, and violation of a statute or regulation.

Pursuant to SB4, a patient who wants to sue for medical malpractice must first submit his case to a “medical review panel” for review on the merits. The parties can forego the panel process, but only if all parties to the proposed action agree. Claims governed by a valid Alternative Dispute Resolution agreement are exempt from the requirements of SB4.

To institute a medical malpractice action under SB4, the patient must file a “proposed complaint” with the Commonwealth’s Cabinet for Health and Family Services. The parties must then appoint an attorney “chairperson” and a three-person voting panel.

All healthcare providers who are licensed to practice in Kentucky are eligible to serve on the panel. When possible, the chosen panelists should practice in the same specialty as the defendants. However, that is not guaranteed. Chosen panelists may be dismissed upon a successful challenge, upon agreement of all parties, or for “good cause shown.” A panelist who fails to fulfill his duties may be removed and subjected to civil sanctions.

Once the panel is set, the patient has 30 days to present his evidence. The provider then has 45 days to submit rebuttal evidence. These deadlines may be extended in the event of “extenuating circumstances.” The panel may request additional materials from the parties, perform its own research, and “consult with medical authorities.”

Within 30 days of receiving the provider’s evidence, the panel must issue one of the following three “expert opinions” as to each of the providers: (1) the evidence supports the conclusion that the healthcare provider breached the applicable standard of care, and that breach was a substantial factor in producing a “negative outcome” for the patient; (2) the evidence supports a breach but not causation; or (3) the evidence does not support a breach.

This opinion must be issued within 180 days of the panel’s formation. Thus, allowing three months for the panel to be formed, the entire process is designed to take less than one year from start to finish. However, given the relatively short (and unrealistic) timeframes given for the presentation of evidence, one could expect the process to take anywhere from one to two years. Anecdotal evidence from Indiana suggests the process could take as long as three years.

Once the patient receives the “expert opinion,” he has 90 days to file a lawsuit – regardless of the “expert opinion” issued by the panel. However, if the matter proceeds in the circuit court, the panel’s opinion may be admissible as evidence. The panelists may also be called to testify as witnesses in the court matter.

Each panelist may be paid up to $350 for all worked performed as a panel member (not including trial) plus reasonable travel expenses. SB4 does not appear to limit the number of times a healthcare provider can serve on a medical review panel.

Proponents of SB4 claim it is necessary to slow rising healthcare costs, prevent the practice of “defensive” medicine, and attract medical talent to Kentucky. Its opponents claim that the bill obstructs an injured patient’s path to justice. To be clear, SB4 does not prevent any patient from filing a lawsuit in the state court. Upon conclusion of the panel process, the patient may choose to file suit regardless of the experts’ opinion. What SB4 does do is essentially require patients to practice their cases for up to three years prior to filing suit.

SB4 is not expected to significantly decrease litigation costs. However, it is expected to “weed out” cases with questionable liability and increase the frequency of pre-trial settlements. For those cases that do proceed to trial, SB4 is expected to decrease the time from filing to trial.

SB4 passed the Senate with a vote of 23-13 in early January. At the time this article was written, the bill was awaiting hearing in the House Committee. Assuming it completes the legislative process, SB4 will likely become effective in July 2017. It will only apply to claims filed after it is signed into law. The full text of SB4 can be located at http://www.lrc.ky.gov/record/17RS/SB4.htm.

Proponents of SB4 claim it is necessary to slow rising healthcare costs, prevent the practice of “defensive” medicine, and attract medical talent to Kentucky. its opponents claim that the bill obstructs an injured patient’s path to justice. To be clear, SB4 does not prevent any patient from filing a lawsuit in the state court.

Editor’s note: As of press time, SB4 passed the House Health and Family Services Committee and is still waiting for a full House vote.

Stephanie Wurdock is a healthcare litigation attorney at Sturgill, Turner, Barker & Moloney, PLLC in Lexington. Her biography and contact information is available at www.sturgillturner.com. This article does not, nor is it intended to, constitute legal advice.