Elizabeth Dears, Esq.                                                                                      Division of Governmental Affairs

Senior Vice President / Chief Legislative Counsel                                        MEMORANDUM  IN OPPOSITION

ON ASSEMBLY FLOOR (Cal. #20)                                                  A.285 (WEINSTEIN)

IN SENATE JUDICIARY COMMITTEE                                             S.6596 (DEFRANCISCO)

                                             AN ACT to amend the civil practice law and rules, in relation to accrual of certain causes                                              of action


This bill would amend the statute of limitations for medical, dental or podiatric malpractice to include a discovery of injury rule, allowing the current two and half year statute of limitations to run from the date an injured patient discovers, or should have discovered, that their injury was caused by malpractice. The bill would prohibit a malpractice action to be filed more than ten years after the date of the alleged malpractice. As this measure would potentially lead to enormous increases in the cost of liability insurance for physicians and hospitals at a time when no increases can be tolerated due to the profound changes occurring in our health care delivery and payment system, the Medical Society of the State of New York strongly opposes this measure and urges its defeat.

The effect of this drastic proposal is that it would essentially quadruple the length of the statute of limitations for every single medical malpractice case.  We are advised by the state’s leading medical liability insurance company that a Milliman actuarial study of substantially similar legislation indicated that if this legislation were to be enacted, medical liability premiums would need to be increased by nearly 15%, perhaps even greater.  Given that many hospitals and physicians all across New York State are barely able to keep their door open now to continue delivering the care expected by our patients, any increases of this nature would prompt a very serious access-to-care problem throughout New York State. 

It must be understood that New York physicians pay premium rates that are already among the very highest in the country, if not the highest.  Yet while dozens of other states across the country have passed legislation to reduce these costs, New York State has failed to enact legislation to address this problem. 

For many physicians currently struggling to keep their practices afloat due to the enormous changes taking place in health care delivery in large part brought on by implementation of the Affordable Care Act, this legislation could be the “final straw” to drive them out of practice. Many New York physicians pay liability premiums that far exceed $100,000 and some even exceed $300,000!  The cost of medical liability coverage for the 2015-16 policy year is:

  • $338,252 for a neurosurgeon in Nassau and Suffolk counties;
  • $186,630 for an obstetrician in Bronx and Richmond counties;
  • $141,534 for an orthopedic surgeon in Nassau and Suffolk Counties; •
  • $132,704 for a general surgeon in Kings and Queens counties, and
  • $134,902 for a vascular surgeon or cardiac surgeon in Bronx and Richmond counties.   

Moreover, malpractice payouts in New York State continue to be far out of proportion to the rest of country.  For example, according to a report by Diederich Healthcare and reported in the March 15, 2014 Washington Post, New York State had by far and away the highest number cumulative medical liability payouts ($689,800,300), nearly two times greater than the state with the next highest amounts, Pennsylvania ($356,855,500), and far exceeding states such as California ($274,590,800) and Florida ($199,442,450).    

Additionally, the report indicated that the New York had by far and away the highest per-capita medical liability payments in the country, far exceeding the second highest state Pennsylvania by 57%, the third highest state New Jersey by 67%, and the fourth highest state Massachusetts by 74%.

Another recent article in OB-GYN News details that New York State has by far and away the greatest number of medical liability awards of greater than $1 million (210), 3.5x highest than Illinois (61), the state with the second highest total and nearly 5x greater than California (43), a state with a far greater number of physicians.

Moreover, a recent analysis from the website Medscape listed New York as the worst state in the country in which to practice medicine, in large part due to its overwhelming liability exposure as compared to other states in the country.

These enormous costs are driven by an unpredictable medical liability adjudication system that numerous studies have concluded results in cases where awards are made despite the absence of any negligence whatsoever.  Moreover, under the current system studies have shown that often those truly injured by negligence do not sue.  

While approximately 2/3 of all medical liability cases brought result in no payment, even the costs of defending these cases are extensive and significantly add to the astronomical cost of medical liability insurance.  For example, MLMIC spent over $800,000,000 in the previous decade to defend physicians and hospitals on whose behalf no payment was ever made to the plaintiff. 

There is no question that this legislation, if enacted, would have disastrous consequences on New York’s health care system, potentially causing another malpractice crisis in this state even more serious than those in 1975-76 and 1985-86.   It would also take a significant step backward from important actions taken by the State Legislature in those years to address the problem of availability and affordability of liability insurance for physicians which, of course, will have a direct impact on accessible health care for New Yorkers.  

In 1975, New York State was facing a crisis so severe that no insurer was willing to write liability policies for physicians.  They had determined that the risk had been so expanded in New York that it was no longer insurable.  The Legislature at that time enacted several reforms to ensure at least the availability of medical liability insurance. One of the most important of these was a bill to restore, at least partially, a statute of limitations which had been completely eviscerated.  In 1985 and 1986, the Legislature had to again act to prevent another medical malpractice crisis in the state.  The reforms adopted by the Legislature included the certificate of merit rule, modest limitations on attorney’s contingency fees and establishment of the Excess Medical Liability Insurance Program which provides a second layer of medical liability insurance for physicians.  Without question, of the reforms enacted in 1975-76 and 1985-86, none was more significant than the statute of limitations changes which this bill would now decimate.

At the same time physicians face these exorbitant costs, health plans continue to reduce payments to physicians by inappropriately denying, delaying and reducing payment for needed care.  The implementation of the Affordable Care Act has caused many insurers to drastically cut their payments to physicians for delivering patient care, particularly for those plans offered through New York State’s Exchange.  Even more, countless physicians have been dropped by health insurers altogether to limit their networks, threatening the ability of these physicians to even operate a medical practice.   At the same time, physicians face substantial new costs as a significant component of their revenue base will be conditioned on participation in often unwieldy value-based payment schemes, including the need to invest tens of thousands of dollars to implement electronic medical record systems.  Moreover, physicians also face huge costs associated with mandates to implement e-prescribing systems as well as the huge cost of complying with the ICD-10 code set that will be required for all claim submissions as of October 1, 2015.   Of perhaps greatest concern, physicians face tens of millions in dollars in lost revenue as a result of the collapse of Health Republic.  When factoring all these problems together, it is no surprise that regions all across New York State are beginning to see shortages in several specialties, according to reports issued by the Center for Health Workforce Studies.

Yet despite these enormous difficulties facing New York’s physicians, this bill does nothing to address these problems and instead would make this problem drastically worse.  Given the already enormous cost of medical liability insurance, increases of this magnitude cannot be sustained by physicians.

Proponents of this measure argue that many other states have incorporated such “date of discovery” exceptions into their statutes of limitation for medical liability actions.  However, many of these states have also included a far shorter outside limit to bring these actions than the 10 year period of time proposed in this legislation.  Furthermore, the vast majority of these states with “date of discovery” rules also have enacted caps on non-economic damages in medical liability actions, thereby significantly offsetting the enormous costs of this provision.  Moreover, those states that have “date of discovery” rules, but no caps on damages, include Alabama, Delaware, Iowa, Kentucky, Rhode Island, Vermont and Wyoming, where physicians pay far less in medical liability insurance premiums than those paid by physicians in New York City, Long Island and the Hudson Valley.  

The reforms of 1975-76 and 1985-86 were absolutely essential to assure that there would not be a health care access tragedy in New York State.  We reiterate that reversing those reforms would have drastic consequences on New York’s health care system, particularly at a time when demand for health care will go up significantly due to the hundreds of thousands of New Yorkers who are now newly insured through the State’s Exchange.   We also remain committed to working with you and all other interested parties to engage in a constructive dialogue regarding how best to achieve meaningful reform of the liability system in a way that is fair to all.  However, we need liability cost decreases, not increases!

Based on the foregoing, MSSNY urges that this legislation be defeated.  

                                                                        Respectfully Submitted,

                                                                        ELIZABETH DEARS, ESQ.


MMA - oppose