(3/7/2005) Ohio Republican Senator Kevin Coughlin hopes to help control rising medical liability insurance rates in the state through legislation that would create a mandatory but non-binding arbitration program for all malpractice claims, and observers say it could pass despite opposition from trial lawyers.
Introduced March 2, SB 88 would establish a ten-year pilot program under the direction of Ohio's Superintendent of Insurance to explore the benefits of using non-binding arbitration to resolve medical malpractice claims against hospitals and other health care providers.
Coughlin said in a statement that Ohio must examine all possible options for limiting increases in liability insurance rates. "Arbitration is a common-sense approach for medical negligence cases that I believe will facilitate resolutions and thereby avoid lengthy, and costly courtroom suits," he said.
Dr. John A. Bastulli, chair of the Legislative Committee for the Academy of Medicine of Cleveland/Northern Ohio Medical Association (AMC/NOMA), said arbitration is viewed as one aspect of a comprehensive approach to relieving the medical liability insurance crisis in Ohio.
According to Bastulli, doctors from around the state have been urging AMC/NOMA to push for some sort of alternative dispute resolution process that would resolve cases before they get to court, he said.
Non-binding arbitration is seen as the best process for getting cases resolved, providing parties with a better understanding of the strengths of their case and weeding out frivolous claims, he noted.
The bill includes some interesting provisions, including a loser-pays clause that would require a party to post a $50,000 bond if the arbitration panel determines that their claim is frivolous, he said. If that party loses at trial the bond would be used to pay the costs of the opposing party.
Another interesting provision would allow evidence from the arbitration to be used in a subsequent court proceeding, Bastulli said. The provision seeks avoid the expense of fully litigating the same dispute twice, which was the case when evidence used in arbitration was barred in future legal proceedings, he noted.
The bill says "[t]o the extent permitted by the Rules of Evidence, an admission made by a party or a party's representative to the arbitration panel, and witness testimony and documentary evidence given at the arbitration hearing, shall be admissible in any subsequent court proceeding."
However, the panel's determination would not be admissible as evidence and arbitrators would be barred from testifying in a subsequent trial, the bill says.
Claimants would be required to inform a health care provider of their intent to file a complaint and if the provider rejects the claim the parties would proceed to non-binding arbitration prior to the commencement of a civil action.
The parties would submit their medical malpractice claims arbitration process conducted by a panel of three arbitrators chosen by the parties from a roster of neutrals maintained by the American Health Lawyers Association. Each side would pick one arbitrator and those two would select a third to serve as the panel chairperson, the bill says.
Arbitration costs would be split by the parties but each side would be responsible for paying the fees of the arbitrator that is representing their interests. Prior to the hearing both sides would file briefs on the dispute and a failure to comply would result in a fine of $60 being imposed on the non-compliant party. Parties are free to accept or reject a panel's determination, but "[i]f a party rejects all or any of the arbitration panel's evaluation and awards and the claim proceeds to trial upon the party's complaint, that party shall pay an opposing party's actual costs unless the verdict is at least ten per cent more favorable to the rejecting party than the evaluation," the bill says.
The Ohio Academy of Trial Lawyers (OATL) responded with a strong statement in opposition to the bill, contending that its provisions would increase the costs of litigating medical malpractice claims.
According to Gerry Leeseberg, a member of the OATL legislative committee, state lawmakers in the last legislative session considered and rejected using medical review panels for negligence claims. "Professions that often differ on public policy concluded that screening panels or mandatory arbitration would hurt more than help the process of resolving disputes," he said.
He suggested that the reforms adopted in 2004 in HB 215, which include qualifications for expert witnesses and regulations covering medical claims data, should be allowed to work before additional changes are considered.
Bastulli said the bill has broad support among Republicans in both chambers and with control in their hands the bill has a solid chance of passage, but he stressed that there is a lot of lobbying to be done.
Ohio joins a host of other states that have proposed or adopted various forms of ADR to address rising medical liability insurance rates.
Early this year Maryland approved legislation mandating referral of medical malpractice claims to mediation, neutral fact-finding, or neutral case evaluation and last year New Jersey lawmakers authorized judges to refer medical malpractice cases to arbitration and mediation.
Also last year, Utah authorized patients to seek mediation of claims, and Wyoming voters in November 2004 gave their lawmakers the power to require the use of ADR processes for malpractice cases. Washington lawmakers are currently considering a bill that would mandate mediation before a case is filed.