Focus on Health Care Reform: Alternatives to Current Medical Tort Litigation

Under the Patient Protection and Affordable Care Act, the Secretary of Health and Human Services (HHS) is authorized to award demonstration grants to States for the development, implementation, and evaluation of alternatives to current tort litigation for resolving disputes over injuries allegedly caused by health care providers or health care organizations.

Starting in Fiscal Year 2011, the Secretary can begin awarding grants to states, with $50 million available for up to five years. Each state desiring a grant will be required to (1) allow for the resolution of disputes over injuries allegedly caused by health care providers or health care organizations; and (2) promote a reduction of health care errors by encouraging the collection and analysis of patient safety data related to such resolved disputes by organizations that engage in efforts to improve patient safety and the quality of health care.

Each state desiring a grant also will have to demonstrate how the proposed alternative will meet nine criteria, which are found in the document, State Demonstration Program to Evaluate Alternatives to Current Medical Tort Litigation. States will also have to identify the sources from and methods by which compensation would be paid for claims resolved under the proposed alternative to current tort litigation. This may include public or private funding sources, or a combination of such sources. As much as practically possible, funding methods will have to provide financial incentives for activities that improve patient safety.

Other requirements include establishing a scope of jurisdiction such as a geographic area, designated area of health care practice, or a designated group of health care providers so that the effects of the proposed alternative to current tort litigation can be sufficiently evaluated. Patients will need to be notified that they are receiving health care services that fall within the designated scope and given information on how they may opt out of or voluntarily withdraw from participating in the alternative.  Patient decisions cannot be limited in any way.

In awarding grants, the Secretary of HHS will be required to give preference to states that have developed a proposed alternative through substantive consultation with relevant stakeholders, including patient advocates, health care providers and health care organizations, attorneys with expertise in representing patients and health care providers, medical malpractice insurers and patient safety experts. Additionally, preference will be given to state proposals that are likely to enhance patient safety by detecting, analyzing, and helping to reduce medical errors and adverse events, and that are likely to improve access to liability insurance.

The Secretary may also use part of the $50 million, not to exceed $500,000 per state, to provide planning grants for the development of demonstration project applications meeting the criteria.  Additional information may also be found in the NCMS Health System Reform Resource Center.

The NCMS is working with the NC Hospital Association (NCHA) and others to explore the potential for development of a demonstration project for North Carolina.


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