The Doctor’s Advocate | Second Quarter 2013
Oregon Enacts Early Disclosure Law
On March 18, 2013, Oregon governor John A. Kitzhaber, MD, signed SB 483, enacting a new law providing for early disclosure and resolution of adverse medical events. The governor promoted this bill as part of a necessary transformation of Oregon’s health system in the wake of federal healthcare reform. In his press release, Governor Kitzhaber announced that the bill would “help resolve many serious medical events before they go to court by helping healthcare providers and patients have early discussions in a confidential setting.”
Critics of the bill have voiced serious doubts about whether the disclosure setting is sufficiently confidential and about the assumptions relied on by the drafters of the bill.
The bill allows healthcare providers to discuss a specific incident with the patient. If the healthcare provider thinks it is warranted, the provider may make an offer of compensation to the patient. The discussion and the offer of compensation are supposed to remain confidential and inadmissible. If the early disclosure and discussion don’t result in resolution, the parties can enter mediation. Participation is voluntary; neither the provider nor the patient is required to enter the discussion or make or accept any offer.
Although the discussion and any offer made under the new law are declared to be confidential and inadmissible, there is an explicit exception in the bill that allows admission of communications if they are offered as evidence contradicting a statement made in subsequent proceedings.
Further complicating the confidentiality question is one of the assumptions behind the bill: Because the discussions with the patient are required to be oral only and the written offer of compensation is not in response to a demand for payment, then no reporting to the National Practitioner Data Bank (NPDB) is required. Federal law, the Health Care Quality Improvement Act of 1986, requires the reporting of payments made in satisfaction of malpractice actions or claims. The bill explicitly provides that a payment under this new law “is not a payment resulting from a written claim or demand for payment.” This language is intended to keep the resolution out of the category of required NPDB reporting. However, it may not be sufficient for a state to declare that NPDB reporting is not necessary. It is not at all clear that declaring payments under this act exempt will actually make them exempt.
Another assumption questioned by critics of the bill is that Michigan’s results can be replicated in Oregon. The bill is designed to follow the example of the University of Michigan Health System, which has been the focus of much attention for its program of early disclosure and the reported benefits of fewer lawsuits, lower compensation costs, and lower litigation costs. Whether these benefits will materialize in Oregon remains to be seen. What is certain, though, is that conditions in Oregon are much different from conditions within the closed system of University of Michigan medicine, where the affected physicians all work in the same group, have the same liability carrier, and are subject to whatever controls the health system chooses to exert. In addition to the conditions that exist within the University of Michigan system, there is the existing liability reform statutory structure in Michigan as a whole, which includes a cap on noneconomic damages.
A further concern is how the new law will work with the 2011 statute establishing coordinated care organizations, or CCOs. The CCO is responsible for coordinating all of the mental, physical, and dental care for Oregon Health Plan members through collaborative relationships. It is not clear how physicians in these relationships will be affected by vicarious liability. This picture is further complicated by the notion of some providers in a collaboration taking part in the disclosure process. The bill does not deal with or exempt early disclosure participants from vicarious liability.
The bill is the culmination of a lengthy process that began in 2010 when the Oregon Health Policy Board appointed a Medical Liability Task Force to develop medical liability reform proposals. From the beginning, the task force and subsequent policy drafters rejected noneconomic damage caps as a viable option, variously citing research critical of damage limits and, more accurately, the political obstacles preventing the enactment of caps. Since the decision in Lakin v. Senco Products, Inc., 329 Or 62, 987 P2d 463 (1999), noneconomic damage caps for medical liability actions have been unconstitutional in Oregon, and two attempts to change the state constitution have been rejected by voters. In the end, the task force recommended an early disclosure program. Its final report is available at http://www.oregon.gov/OHA/action-plan/med-liability-report.pdf.
Subsequent to the work of the task force, the Oregon legislature passed SB 1580. Introduced at the request of the governor on behalf of the Oregon Health Authority, the bill mandated a Patient Safety and Defensive Medicine Workgroup charged with developing a recommendation for legislation. The legislation identified the following priorities for the work group:
- Improve the practice environment to allow physicians to learn from medical errors and improve patient safety;
- More effectively compensate individuals who are injured as a result of medical errors; and,
- Reduce the collateral costs associated with the medical liability system, including costs associated with insurance administration, litigation, and defensive medicine.
The Doctors Company met with the governor’s staff, attended work group sessions and provided testimony, and worked through the Oregon Liability Reform Coalition to try to get some more tried-and-true liability reforms included in the bill or introduced as separate legislation. However, beginning with the task force report, the preference for an early disclosure system never wavered.
With the result inevitable, we worked hard to help the work group come up with a good final product, but many of the bill’s shortcomings were not fixed by the time it was signed. There remain problems with confidentiality, with interaction with the NPDB, and with shared or vicarious liability among providers in CCOs, among other concerns, and critics of the bill were told that additional legislation introduced to address those issues would not be considered this session.
The bill applies to adverse incidents occurring on or after July 1, 2014. The Doctors Company will provide specific guidance and support as more details become available.