Ohio Legislative Update - Subrogation Changes and Proposed Medical Injury Compensation System
After several years of relative tranquility, the 131st General Assembly stirred up the Ohio civil justice system in the last six months. Two bills are important to note for the civil practitioners and our clients.
First, the House introduced HB 157 in an attempt to reform Ohio's medical malpractice law. The bill essentially seeks to convert medical malpractice into workers compensation by creating the Medical Injury Compensation System (MICS). This new system will create a new state agency staffed by physicians who will determine whether a patient is entitled to compensation and how much compensation the patient will receive. The MICS will cover all medical negligence cases including those against doctors, hospitals, and nursing homes.
As introduced, the MICS requires an injured patient or deceased family member to file a claim within 6 months of discovery of the injury. There is a four-year statute of repose and no affidavit of merit is required. The claimant doesn't need a lawyer and must name all providers in the claim. Compensation will be reduced by the percentage of the unnamed providers' negligence.
Under the system, the claim is assigned to a physician for review. The claimant must submit signed releases and submit to an exam if requested. Failure to comply may result in a dismissal. The reviewer can obtain statements from the provider and any other personnel who treated the patient and obtain expert opinions. The claimant has no right to submit expert reports, opinion letters or to take depositions. Compensation is allowed upon a finding of clear and convincing evidence.
If the reviewer decides the patient is entitled to compensation, the case is sent to an actuary to determine economic and non-economic damages. While either party can appeal the reviewer's decision that the patient may or may not receive compensation, the actuary's decision on the amount of compensation is final. Appeal goes to a three-member panel of physicians. Either party may submit an expert's report to the panel but no other discovery is permitted.
The panel's determination can be appealed to the Common Pleas Court for a jury to decide. The jury can only decide whether the provider fell below the standard of care and cannot consider the amount of damages.
Needless to say, HB 157 is a practice-altering bill and is being watched very closely by a number of other interested parties. It is currently in the House Committee on Insurance.
The second bill of importance is one that will actually become effective on September 28, 2015. As part of the annual budget bill, (HB 64) Senate President Faber introduced language to codify the "make-whole" doctrine in Ohio. In 2004, the Ohio Supreme Court in Lawson held that insurers could avoid application of the make-whole doctrine if its reimbursement agreement clearly establishes that (1) the insurer has a right to a full or partial recovery of amounts paid by it on the insured's behalf and (2) that the insurer will be accorded priority over the insured as to any funds recovered. Northern Buckeye Education Council GHB Plan v. Lawson, 103 OhioSt.3d 188, 2004-Ohio-4886.
The new provision provides, regardless of any contractual or statutory provision to the contrary: "(1) If less than the full value of the tort action is recovered for comparative negligence, diminishment due to a party's liability under sections 2307.22 to 2307.28 of the Revised Code or by reason of the collectability of the full value of the claim for injury, death or loss to person resulting from limited liability insurance or any other cause, the subrogee's or other person's or entity's claim shall be diminished in the same proportion as the injured party's interest is diminished." R.C. 2323.44(B)
Whether the new statute has retroactive application is unclear but this new provision will alter the tort recovery landscape significantly, especially in cases where there is limited insurance coverage available.