In other historic health care news last week, the state Legislature overruled Gov. John Lynch’s veto of Senate Bill 406, the so-called “early offer” bill. It creates the nation’s first statutory program through which patients who suffered malpractice at the hands of a medical provider can agree to give up some legal options in exchange for an early settlement offer from the provider. Now that legislators have passed it, they need to begin work on reforming it.
The early-offer law is one method of trying to reduce health care costs by reducing the number of malpractice lawsuits. There is some logic to the idea, but as always the devil is in the details. And some of the details of SB 406 are troubling. They give medical care providers a big advantage over patients who opt for the early offer.
Any patient who suffers medical malpractice has the option of suing or taking the early offer (or doing nothing). Those who enter into the early-offer process might get a relatively quick resolution of their claim (a few months rather than many, many months or years). But they are suddenly at the mercy of the provider or his or her employer.
The law lets patients reject an early offer and then sue if they thought the offer too small. But to do that, they have to leap some high hurdles. Having an incentive not to sue makes sense, but these incentives are too onerous. One would require the victim to post a bond equal to the provider’s expected legal costs. Those could be in the hundreds of thousands of dollars. That is a precondition for going forward with a lawsuit. If you don’t have tens, if not hundreds, of thousands of dollars and you get lowballed, tough.
Another states that if the patient rejects the offer and then loses in court or wins a sum that is 125 percent of the early offer amount or lower, he has to pay the provider’s legal fees and costs. That tilts the field too far in favor of providers.
Also, the schedule of payments for certain injuries is too low and the restriction on the types of damages that can be recovered is too broad.
The goal ought to be to encourage people to enter the early-offer program. As the law is written, most people would be foolish to do that.