Medical arbitration agreements latest volley in tort debate

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Published: May 19,2003

GULFPORT — The Gulfport OB-GYN Clinic, with five doctors, three nurse midwives and three nurse practitioners, delivers an average of 1,200 babies per year. The practice lost its medical malpractice insurance carrier when it left the state and has not found other coverage. As of early May, the clinic was going to be without malpractice insurance by the middle of the month.

Dr. Don Gaddy, an obstetrician with Gulfport OB-GYN Clinic, says the clinic felt the insurance company dropped them for no reason; the clinic had no malpractice claims against it. But when the medical practitioners looked into legal action, they found out that they had signed an arbitration agreement with the insurance carrier. Gaddy said if the insurance companies know that arbitration agreements save money, that is a good indication medical practitioners should be doing the same thing.

Recently, Gulfport OB-GYN Clinic began asking patients to sign an arbitration agreement that waives their right to a jury trial in the event of a dispute. Instead, the dispute goes before an arbitration panel.

“There has been a surprising response from patients wanting to help out,” Gaddy said. “We are not requiring patients to sign. There is no pressure, and we know not all patients will sign the agreement. But 99.8% are signing with no problem. That has been a surprise to us. They are very accepting of the agreement. It is not detrimental to the patient. It helps the system reduce costs for litigation.”

The arbitration agreements have been recommended by the Coast Counties Medical Society, which represents approximately 200 doctors. In addition to Gulfport OB-GYN, one ear, nose and throat practice on the Coast has also reportedly started asking patients to sign the medical arbitration agreements.

The primary hope for the arbitration agreements is that they will reduce the cost of medical malpractice insurance by reducing litigation costs and excessive jury awards. It is also hoped that, since insurance companies apparently like arbitration agreements, that the agreements could bring some medical malpractice insurance companies back to the state.

David Baria, president of the Mississippi Trial Lawyers Association, says medical arbitration agreements eliminate the injured individual’s right to a jury trial guaranteed by the Seventh Amendment to the U.S. Constitution.

“I think it is not only unconstitutional, but unconscionable for medical providers to require patients seeking medical treatment to waive their right to a jury trial even if the doctor commits negligence which injures the patient,” Baria said. “If you want to reduce insurance rates for doctors, why don’t we just say people can’t sue doctors under any circumstance? Insurance rates would be greatly reduced or eliminated. Of course, no one in our society wants to go that route. Even doctors publicly acknowledge there are circumstances where negligence is committed and a lawsuit is appropriate.”

Arbitration agreements in the business world have become more common. But Baria argues that there is a difference between the relationship between a physician and patient and, for example, a customer’s relationship with a finance company.

“They are a little more acceptable in that arena if people know what they are signing,” Baria said. “If you don’t want to sign an arbitration agreement with ABC Finance, you can go to XYZ Finance. Your relationship with your doctor is different. People don’t necessarily feel free to go shopping around for a doctor who has been treating them and now wants them to sign the arbitration agreement. The relationship between a doctor and patient is different, and I think that makes it inappropriate for doctors to require arbitration agreements.”

Baria believes another problem with arbitration agreements is that when someone needs medical treatment, all they want is for the pain or problem to go away.

“If you shove documents in front of them, they are going to sign anything,” Baria said. “Whatever is put in front of you, you will sign. It is not a negotiated instrument. There is duress potentially involved.”

Dr. Arthur Matthews, vice chairman of the board of trustees, Mississippi State Medical Association, said medical arbitration agreements are a response to the desire of the medical community for tort reform.

“The problem with medical arbitration is it has apparently never been tested in the Mississippi Supreme Court,” Matthews said. “The other thing is that arbitration is something that has no place in emergency room situations. The ideal situation is a new patient reads it, the doctor explains the patient is giving up the right to a jury trial in case of alleged medical malpractice, and any kind of dispute over care will be settled by an arbitrator.”

Matthews said his only experience with arbitration agreements is with some private business boards he serves on where some disagreements have gone to arbitration. He said it appears they try to compromise by giving a little to each party in the dispute.

“They sort of split the baby,” Matthews said. “If that happens to physicians, any payment for alleged malpractice will be reported to the national databank. Forever after it will have to continually report that this payment was made when, in fact, the physician may have done nothing wrong. But the arbitrator decided to give a little to each side.”

Matthews said the plaintiff attorney gets cut completely out of the loop. But it remains to be seen how much the arbitration agreements might help with the malpractice insurance crisis. More will be known when cases are tried. He said the agreements aren’t acceptable if a patient is told he or she can’t see a doctor without signing the agreement. However, he says doctors have the right to decide whether or not to take a patient.

Mississippi is in the same boat as the rest of the country. Other states also are just taking up medical arbitration agreements, and not a lot of case law exists on the subject.

One disadvantage Matthews sees is that it increases the amount of time taken up discussing non-medical issues since the physician must discuss the agreement with patients. That is in addition to the time that HIPPA privacy laws have recently added to the registration process, making it longer and more burdensome.

Matthews said it will take time to see if the medical arbitration agreements work as intended.

“Does it help medical care?” Matthews said. “I don’t think I can answer that. If it makes the patient ask more questions, good. But if it makes people more anxious and makes them trust doctors less, then it is not good. Arbitration is just one part of the puzzle. And some doctors have chosen that to possibly control some of their risk. It may identify patients who may be more prone to sue.”

Matthews said if a doctor commits malpractice, the victim should be compensated. But he says the system has gotten out of balance. In addition to plaintiff attorneys who want jackpots, he believes that judges have contributed to the problem.

“Apparently the crisis in Mississippi is a relatively recent problem that has been building for 10 to 12 years,” Matthews said. “If the judges had behaved and not let certain things go on in court, it would never have happened. The judges have a lot of leeway. It is a very complex issue. I certainly don’t know the answer. A main message of all this is that tort reform in Mississippi is not fixed.”

Contact MBJ contributing writer Becky Gillette at bgillette@bellsouth.net.

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