Medical Malpractice Insurance Background in North Carolina
North Carolina Voluntary Arbitration of Negligent Health Care Claims Act
When House
Bill 1671, the North Carolina Voluntary Arbitration of Negligent Health
Care Claims Act, went into effect on Jan. 1, 2008, it was the first substantive
tort reform enacted by the Tarheel State in more than 20 years and marked one of
the few times the state’s medical and legal professions had reached a consensus
on medical liability reform.
The tort reform bill passed both of North Carolina’s legislative houses by a near-unanimous
vote in late 2007. The most notable aspect of HB 1671 was that it limits monetary
damages in medical malpractice cases to $1 million for those who agree to go to
binding arbitration. Physicians favored the bill because it addressed their concerns
that the cost of resolving medical malpractice claims needs to be controlled to
bring down liability insurance premiums, and it addressed their goals of limiting
the size of judgments and shortening the time frame for resolution. Attorneys endorsed
the bill because it gave plaintiffs access to a resolution even if they did not
have the financial resources to pursue litigation, and HB 1671 clearly defines the
arbitration process.
The march toward the passing of HB 1671 began years earlier as medical liability
premiums were spiking across North Carolina as well as nationwide. Medical Mutual
Insurance Company of North Carolina, the state’s largest medmal insurer, reported
that from 1995-2003 the base premium rate increased tremendously, as follows:
- For general surgeons: a 127-percent increase to $40,000 per year in basic liability
premiums;
- For OB/Gyns: a 137-percent increase to $100,000 per year;
- For family practitioners with no obstetric practice: a 115-percent increase to $9,000
per year;
- For emergency room physicians: a 153-percent increase to $24,000 per year
The North Carolina premium increases were not unique—as the entire nation had been
experiencing similarly inflating rates—neither were the state’s physicians being
sued at a greater frequency than their counterparts in other states. Mimicking nationwide
trends, 55 percent of Medical Mutual’s emergency physicians, 62 percent of its OB/Gyns
and 70 percent of its general surgeons had been sued for malpractice.
While North Carolina’s medical liability climate had yet to reach an acute crisis
stage, by 2004 both the medical profession and political representatives began serious
discussions about the potentially damaging statewide effects the growing problem
of medical liability premiums could have on the quality and affordability of healthcare.
Ultimately, the North Carolina medical establishment, legal community and state
legislators agreed that mediation can be much more effective than litigation in
resolving claims of medical negligence because mediation is less expensive and more
efficient; it can take into account monetary and non-monetary values, and it facilitates
communication between the parties.
The resulting Voluntary Arbitration of Health Care Claims Act marks the first time
doctors in North Carolina have had any cap on medical liability awards. In addition,
the statute sets up specific procedures and timelines for selecting arbitrators
and conducting discovery. Hearings start within 10 months of the parties’ agreement.
Arbitrators must issue a decision within two weeks of the hearing’s completion,
versus the average two to three years it can take for a case to make its way through
trial.
While both sides agree that the bill was an important step, they point to other
areas of future reform where agreement will be difficult. The North Carolina Medical
Society has gone on record saying that they intend to continue pushing for greater
medical liability tort reforms that will ensure affordable liability coverage and
access to care for the state’s citizens.
|
