Text of Michael W. Wise's Testimony at the Ohio Statehouse

Chairman Stivers and members of the Senate Insurance Committee, Thank you for the opportunity to testify on SB 59. I am pleased to have Dr. Bastulli with me from The Academy of Medicine of Cleveland & Northern Ohio (AMCNO) in Cleveland and because of his testimony, I would like to limit my testimony to the changes in the Sub. Bill and legislative activity taking place in other states. 

The Substitute Bill contains five changes to SB 59. The AMCNO helped draft each of the changes. 

First, historically, a party to an arbitration could purposely not put forward their best case and then rely on an inflammatory dissenting opinion from their chosen panel member to protect them in a subsequent court proceeding. Therefore, we clarify that dissenting arbitration opinions are not admissible in a subsequent court proceeding. 

Second, we addressed a constitutional concern about selection of the pilot counties by choosing our pilot counties using a concept found elsewhere in the Ohio Revised Code. The constitutional argument is typically an equal protection argument. With the Amendment, the counties shall be selected by the Director of the Director of the Department of Insurance, after consultation with the Ohio Supreme Court. In addition, three counties must have populations of two hundred fifty thousand or more, one additional county must have population of one million or more, all counties must be in the top 25th percentile as far as medical malpractice premiums as determined by ODI, and the Director of ODI may choose other counties at her discretion (limit of 7 total). 

Third, the applicability of the Bill is expanded. The Bill now covers individuals who are agents or employees of the covered doctor. 

Fourth, the current SB 59 allows a respondent/defendant to just not respond to the arbitration and force the matter into Court. The Substitute Bill provides for appointment of an additional panel member and an order against the respondent for failure to reply and participate in the arbitration proceeding. 

Last, the Substitute Bill adds a Unity of Provisions Clause. The point had been raised that the keys to S.B. 59 being successful is the mandatory arbitration requirement and the loser pays component. If the loser pays component was challenged under the open courts doctrine and it failed to withstand a judicial challenge then we would be left with the mandatory arbitration provision and none of the benefits of loser pays component. Consequently, the Unity of Provisions Clause was added and that provision requires that if any provision of the Bill is determined to be unconstitutional, the entire Bill would be struck down.

As far as activity outside Ohio, in Florida, lawmakers have approved legislation to amend the state's law on non-binding arbitration. Courts were authorized to order parties into non-binding arbitration but the statute did not provide much guidance on how the arbitrations should be conducted - statutory non-binding arbitration is primarily used in medical malpractice and tort cases. The Bill changes the statute by including specifics on how a statutory arbitration proceeding would be conducted once a court orders parties into the process. More importantly for us in Ohio, the Bill provides that parties who request a trial de novo but do not obtain a more favorable judgment at trial may be assessed court and arbitration costs and attorney's fees. The Bill states, "Upon motion made by either party within 30 days after entry of judgment," the court may assess costs, "including arbitration costs, court costs, reasonable attorney's fees, and other reasonable costs such as investigation expenses and expenses for expert or other testimony which were incurred after the arbitration hearing and continuing through the trial of the case," on a plaintiff who requested a trial de novo where the judgment at trial is "at least 25 percent less than the arbitration award." 

In North Carolina, legislation was introduced aimed at encouraging parties to a medical negligence claim to agree to arbitrate after the dispute arises. The Bill would make pre-dispute agreements to arbitrate professional negligence claims void and unenforceable while authorizing post-dispute arbitration agreements. The Bill is designed to move parties to medical negligence claims to arbitration, in the hope that it will limit the costs and time of resolving a dispute while still getting a fair result. The Bill requires that the losing party would pay the arbitrator's fees and expenses and the bill would require the arbitrator to review the reasonableness of the attorneys' fees. An award could be overturned only for evident partiality, corruption, misconduct, or if an arbitrator exceeded his or her powers. 

Finally, in Pennsylvania the House of Representatives is considering a Bill that would require mandatory arbitration of medical malpractice disputes and cap non-economic damages in arbitration at $250,000, while allowing the right to a trial de novo with no caps. The Bill, HB 1343, was introduced in the House on May 24th and includes provisions that are meant to discourage customers and providers of health care services from requesting a trial de novo. The decision of an arbitration panel, as well as the inability of an arbitration panel to reach a decision, shall be introduced at trial either by the testimony of one of the arbitrators or by stipulation of the parties. Under the Bill, the arbitration panel would be selected randomly by a judge and would consist of a lawyer who practices law in the jurisdiction, a medical professional and a retired judge. The sponsor of the Bill hopes that the mandatory arbitration concept would stem the tide of medical professionals leaving the state. The sponsor is also confident that mandatory arbitration could lower insurance rates and reduce the caseload of the courts.

Thanks for allowing me this opportunity to testify. Last General Assembly this Committee and the full Senate pass mandatory arbitration but there was not sufficient time to pursue the Bill in the House. The current legislation, while better is not significantly different. I urge your prompt attention to and passage of this important Bill for Ohio’s medical community.