This post is part of a series sponsored by PCF Insurance Services.
In the third installment of a three-part series, PCF Healthcare Practice Leader Brian King explains the legal changes and the impact of Assembly Bill 35.
Welcome to the third chapter of our series on health insurance. In this section, we will be looking at a landmark change in the field of health care law: Assembly Bill 35 (AB 35), a landmark piece of legislation that redefined the rules for health care providers and their insurance contracts.
Want to stay up to date? Part 1 and part 2 Before we continue!
My journey as a PCF Healthcare Practice Leader has been to closely examine AB 35 and evaluate its broader impact on the healthcare community. AB 35 represents a fundamental shift in how healthcare professionals approach practice, patient interactions, and risk management strategies. Its nuances and complexities directly impact the financial and legal aspects of healthcare delivery.
In this part of the series, we will unravel the complexities of AB 35, how it will change the structure of medical malpractice insurance, and explore the steps healthcare facilities and professionals can take to effectively navigate this new territory. Also, while Assembly Bill 35 only directly affects California, many state legislatures have passed similar bills (see: Colorado ).
Understanding AB 35 and its ramifications
AB 35 represents a major shift in California’s medical malpractice framework and is reminiscent of reforms seen in the late 1970s. legislation In particular, it increases the caps on non-economic damages, such as pain and suffering, from $250,000 to $350,000, and in wrongful death cases, to $500,000. In addition, these caps will be increased incrementally each year, with the wrongful death cap increasing by $50,000 each year for the next 10 years, and then increasing by 2 percent thereafter. Other non-economic damages will increase by $40,000 each year for 10 years, and then increasing by 2 percent thereafter.Office of Governor Gavin Newsom, May 2022)
Another significant change is that it is now possible to file separate lawsuits against different parties in the same lawsuit. For example, a medical facility can be sued for $300,000 in a wrongful death lawsuit and a doctor for another $500,000, significantly increasing the amount of claims. This escalation will dramatically change the dynamics of litigation.
Additionally, AB 35 will affect the amount that lawyers can seek in damages, allowing them to obtain a higher percentage of larger settlements, which could encourage lawyers to pursue more cases and lead to an increase in litigation in the health care field.
This trend is not unique to California: Similar legal changes are occurring in states such as New Mexico, Florida and Colorado, signaling a national trend that could redefine the field of medical malpractice.
Impact of the Medical Care Act Reform on Insurance
The impact of bills like AB 35 on medical malpractice and facility insurance varies. AB 35 focuses on monetary damages, especially non-economic damages, and can be considered a “fix” to the law. However, other changes to the law may force physicians to change how they practice and bill. AB 35 is a landmark that focuses on the financial aspects of medical practice and litigation.
Compliance with new medical standards
Providers should be familiar with the term “standard of care.” Take advantage of any assistance offered by your insurance company regarding clinical risk management. Your insurance company may be willing to help you free of charge. However, given the evolving legal landscape, you may want to reconsider your risk management strategy. These services may be essential, especially in busy healthcare settings where the medical director holds these responsibilities.
Effective use of a good Electronic Health Record (EHR) system is also important. These systems provide guidelines for accurate records, which is a key defense against lawsuits. Solid risk management, either in-house or outsourced, is essential. Companies like Medpro offer valuable services such as compliance seminars.
Standards of care also depend heavily on adhering to prevailing local practice and maintaining up-to-date training and best practices for each procedure. Regularly reviewing patient consent forms with attorneys and insurance companies is essential to clearly communicate the risks associated with any procedure.
Attention to detail in patient care and documentation is of utmost importance. Missing important aspects can lead to serious problems, especially in the case of negative outcomes or perceived negligence.
Future Trends in Medical Care Law
Looking to the future, the exact trajectory of the health care law remains unclear. How these changes are interpreted and enforced by the courts will be important. Many insurers are seeking rate increases to take these legal changes into account, but there has been resistance to rate increases in California, in particular, and the situation is currently at an impasse.
This conflict has caused insurers to withdraw from the market, reducing competition. Although policy applications may allow for adjustments to coverage, without competition, premiums remain constant and underwriters are less likely to offer discounts or “credits,” which can affect the affordability of policies.
That being said, it is imperative that you do not renew your insurance policy without careful consideration. It is important to consult with an insurance professional familiar with medical malpractice insurance to evaluate your policy’s comprehensiveness and compatibility with the latest legal changes. While it is natural to seek cost savings, medical malpractice insurance is an area that requires strong coverage to protect your business, reputation, license and legacy.
Embracing health care in the wake of AB 35
AB 35 redefines the boundaries of damages that can be assessed against healthcare providers and their practices, so it is imperative that healthcare providers stay ahead of the curve by arming themselves with knowledge and proper insurance. We hope that by embracing this changing environment with a commitment to excellence and protection, we can help defend a pillar of our healthcare system that strives for the highest standards of care.
As we navigate this new chapter in health care, remember that staying informed and prepared is key to successfully navigating these changes.
Is your practice prepared for the challenges and opportunities of this new legal era? Connect with a PCF Healthcare Insurance Expert Make sure you are well prepared for the future.
