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Court ruling triples verdict by counting inflation twice
A coalition of New York’s leading health care providers and workers, representing close to 75 hospitals, is protesting a recent court ruling that they say has sent medical malpractice premiums spiraling out of control in New York State. Residents will lose critical medical services and thousands of health care jobs could be put at risk if the court ruling stands, they say.
As a result of the ruling, hospitals have been notified that insurance premiums will increase substantially, or coverage might not be available at all, says Spencer Foreman, MD, president and CEO of Montefiore Medical Center in New York City. Foreman is a member of the New York Healthcare Alliance, a coalition of health care providers and workers from approximately 75 hospitals throughout the state of New York. The coalition is calling on the New York State Legislature to avert the crisis by passing legislation to clarify the malpractice law.
"We are on the verge of a social and medical catastrophe that will force some of the finest hospitals in the world to stop providing service," Foreman says. "A technicality in the law will compel hospitals to stop delivering babies, shut down emergency response units, and lay off workers."
The debate was touched off recently when the New York State Court of Appeals upheld a lower court’s interpretation of New York’s structured judgment law (CPLR 50A). In the case, known as Desiderio v. Ochs, the trial court increased the jury award for future medical expenses from $40 million to $140 million by "averaging" and counting inflation twice, Foreman says. In rendering its unprecedented decision, the Court of Appeals implored the legislature to clarify the law, passed in 1986, which was designed to moderate the increases in medical malpractice premiums.
The ad hoc coalition of health care providers and workers has called upon both houses of the legislature to restore the original intent of the law and bring financial awards back in line with accepted norms and in proportion with the related injury. Such a change would remove the "averaging" and "double-inflation" features of the law, says David P. Rosen, president and CEO of Jamaica Hospital Medical Center, Brookdale University Hospital Medical Center, Flushing Hospital Medical Center and MediSys Health Network, all in New York.
"This law was originally written to ease the malpractice insurance burden on hospitals while ensuring that the jury awards to plaintiffs were fulfilled," Rosen explains. "But ambiguities in how the law was drafted has had unintended consequences and malpractice costs are about to threaten every hospital in New York."
Simply repealing the law will not solve the problem, says Lisa Kramer, president and CEO of FOJP Service Corp., an insurance program for hospitals in New York City. "That would bring back the malpractice insurance crisis of the 1980s that the law was intended to resolve," she says. "The structured judgment law attempts to control malpractice costs by making jury awards more equitable and by encouraging out-of-court settlements so that plaintiffs can decide for themselves how best to use the money. But the arithmetic prescribed by the statute needs to be fixed."