'Early offer' bill emerges

Last modified: 6/2/2012 12:00:00 AM
A bill designed to speed up medical malpractice settlements and skip costly and lengthy court proceedings emerged from a committee of conference this week still backed by House and Senate leaders and opposed by trial attorneys who argue it favors hospitals over patients.

Senate Bill 406 would pioneer a system allowing victims of malpractice to request an 'early offer' from medical providers to avoid going to court with an unknown outcome. If the patient rejects the offer and chooses to go to court, they must pay the medical provider's attorney fees if the court settlement ends up being equal to or less than 125 percent of the early offer.

The early offers would account for lost wages, medical expenses and an additional payment based on the type of injury. The additional payments range from $6,600 for 'a temporary injury involving only emotional harm, without physical injury' to $140,000 for 'a permanent injury involving grave harm, or an injury resulting in death.' The payments would not account for pain and suffering.

The bill initially said that, if a patient rejected the early offer, the legal threshold would be raised so the patient would have to prove the medical injury was the result of 'gross negligence.' This raised concern in the House about hospitals giving patients lowball offers and then easily winning the court cases based on the heightened criteria.

Rep. Brandon Giuda, a Chichester Republican and practicing attorney, crafted the new language to instead require the patient to pay the medical provider's attorney fees if patients decide to go to court but don't receive more than 125 percent of the early offer.

'To his credit, I think that was sort of the linchpin of the whole compromise,' said Senate Majority Leader Jeb Bradley, a Wolfeboro Republican and the bill's primary sponsor.

The possibility of paying the medical provider's legal costs 'is still a disincentive if you get a reasonable offer to sort of game the system by seeing what you can get' in court, Bradley said.

The New Hampshire Association for Justice, which represents trial attorneys in the state, has strongly opposed the bill. Bill Woodbury, the group's legislative committee chairman, said the committee of conference report 'keeps a lot of the stuff that we were opposed to at the beginning.'

Giuda's compromise language is 'a particularly egregious 'loser pays' provision,' Woodbury said. He noted that before the court hears a case from someone who rejects the early offer, the patient must post bond to ensure they can pay the medical provider's attorneys fees.

'You've got to post bond, and then you've got to win by 125 percent,' Woodbury said. 'The majority of people in New Hampshire don't have a lot - to get a bond, you've got to put your house up, you've got to put your life savings up.'

Supporters of the bill point out that the early offer system is only voluntary, and patients can still go straight to court if they feel that's their best option. Bradley has called it a 'win-win-win' for all involved.

But Woodbury said uninformed patients told 'if you sign here you can get your money faster' could choose the early offer system and end up with significantly less than going the traditional litigation route. The bill states that if the patient doesn't have legal counsel when they receive notice of their medical injury, 'the medical care provider shall provide a neutral advisor who is a member of the New Hampshire Bar or a retired judge, at the medical care provider's expense, to offer assistance to the claimant and medical care provider.'

'Among other things, the neutral advisor shall encourage the claimant to consider retaining an attorney, and shall ensure the claimant is aware of the differences between' the early offer system and regular malpractice litigation, according to the bill.

The bill has also been opposed by two malpractice insurance companies who insure nearly half of the doctors and other health care providers in the state. Mary Elizabeth Knox, vice president of claims for Maine Medical Mutual, wrote in a letter to the Senate last month that the bill 'will be extremely costly' for her company by increasing its administrative burden and other costs.

The bill's supporters, which include hospital executives, say it would be the first system of its kind in the nation and finally give patients an option to receive a quick and guaranteed malpractice settlement. Democratic Gov. John Lynch has yet to take a position on the legislation, but a spokesman says he 'has concerns about the bill and will be reviewing it carefully.'

The bill must again pass the House and Senate next week before heading to the governor's desk. The bill initially passed both chambers with veto-proof majorities. While Republican lawmakers are excited about the potential for New Hampshire to become a tort reform trailblazer, Woodbury said 'other people haven't done this because other states see the problem with this.'

'There's just something different about this bill - the force with which it was rammed through, the complexity of it,' Woodbury said. 'It's like trying to stop a freight train.'

(Matthew Spolar can be reached at 369-3309 or mspolar@cmonitor.com or on Twitter @mattspolar.)

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