A proposal is pending in Congress that would shift medical malpractice liability defense for EMTALA mandated care for ED visits and on-call care from private insurance to the federal government. The plan would have Uncle Sam shoulder the EMTALA civil liability and defense under the Federal Tort Claims Act (FTCA) for both physicians and hospitals. The details of the law and its interaction with EMTALA may make the proposed law a lot less helpful than sponsors and supporters suppose.
Under the proposed law, hospitals, officers, governing board members, employees, contractors, or on-call providers can apply for “deemed status” which would treat the entity or individual as if they were a federal employee. That status would make the federal government responsible to provide legal defense and pay for any covered judgments or settlements. Similar arrangements are currently in place for employees of Tribal healthcare facilities and Federally Qualified Health Centers.
On The Good Side Of The Proposal
On the positive side, the proposal would shift a part of the costs of malpractice claims attributed to EMTALA to the federal government and move the litigation into special FTCA federal review and FTCA courts. The federal system typically results in fewer court cases, lower settlements, and fewer attorneys willing to take cases into the system, as many malpractice firms are not experienced in FTCA practice.
On The Not So Good Side
The proposal limits coverage to items and services that are “furnished to an individual pursuant to Section 1867 of the Social Security Act (EMTALA) and to post stabilization services…furnished to such an individual.” It would extend only to on-call physicians who are “not employed by or under contract with such hospital or emergency department…”
That’s when the technicalities will kick in and begin to cloud the issues.
First, the Office of Inspector General (OIG) has rendered two advisory opinions that can be read to require that on-call physicians cannot be paid by the hospital for being on-call unless they have a contract in addition to merely being on staff. If a contract is in place, as required, the physician would not be eligible under the current wording, effectively limiting coverage to hospitals that do not pay for call.
The second big issue is that not all ED visits would be covered. Once the patient receives the EMTALA medical screening exam and it is determined that the patient does not have an emergency medical condition, EMTALA ceases. Many Emergency Departments raise the threshold for recognizing an emergency medical condition as high as possible to force patients with “minor” conditions to pay or leave the ED. Under these circumstances, it is likely that all care after the determination of “no emergency medical condition” will be subject to normal malpractice exposure. That in turn means that it is highly unlikely that the proposed law will substantially affect malpractice premiums.
What about admitted patients?
Another concern is that care for admitted patients may not be covered. Under current CMS regulations, EMTALA ceases for the patient once they are admitted with the intent that they will be hospitalized at least overnight. Various federal Courts of Appeal are divided in their rulings on whether the rule is valid or CMS exceeded their authority in imposing the rule. If valid, care rendered after admission would cease to be EMTALA care and potentially would not be covered by the proposed legislation. It will take more litigation to determine that coverage issue as the proposal language stands.
How would this apply to transfers?
One can imagine that this law is intended to extend to the specialists at the hospital receiving an EMTALA transfer, but it is not clearly stated. Leaving a gap like that is an invitation for FTCA to protect its budget by refusing coverage to receiving facilities. Why take that risk?
Working With FTCA Is A Trade-Off
Even if the proposed law would apply in a specific case, the physician or hospital will find the FTCA experience is a lot different than dealing with your insurance agent and insurance claims department, if the experience is similar to that experienced by FQHCs.
Applicants have to file applications annually or you aren’t covered. This process currently requires extensive information on risk management programs, policies, procedures, and other details that make the annual “redeeming” process a paperwork nightmare. You will still need to maintain traditional malpractice insurance for the remainder of your practice. When you need help, getting ahold of someone from FTCA legal or risk management services is often challenging, as they are spread thin by budget constraints.
If a claim arises, the physician or hospital must notify FTCA and submit a bundle of paper work before the FTCA office determines whether they will accept the defense as a covered claim. While these lawyers are experienced and competent, they are swamped and providers have no say on who will defend them. Providers often comment that the FTCA representation process is a lot more demanding on the physician than traditional insurance, so don’t expect a big emphasis on customer service. Providers can expect no say in how their case is settled or tried.
Some FQHCs have ignored the offer of free FTCA coverage and purchased regular malpractice insurance, and others have found that the paperwork and deadlines have forced them out of “deemed status.”
Multiple Litigation Risks
One of the other practical challenges of the proposed law is that sets up the prospect of litigation in multiple courts and very different procedures. If malpractice claims are determined not to be covered by the FTCA, those that are not will be heard in state courts and the counts covered by EMTALA will be heard in the FTCA court.
While it is possible to end up in multiple courts under the present law, it is not common. State and federal courts may handle all counts in a single court in most cases.
Should You Support The Proposal?
As I indicated earlier, working with FTCA is a trade-off. The proposal currently has some gaps or questions in it that could be addressed before passage, which might clarify some issues.
But, if you expect this to dramatically reduce malpractice premiums for hospitals, EDs, and on-call physicians, I predict that it is not likely to meet your expectations.
In Congress
The bill is HR 36, known as the Health Care Safety Net Enhancement Act of 2013, is sponsored in the house by Rep. Charles W. Dent, Republican, Pennsylvania. A companion bill has reportedly been filed in the Senate. The current bill has been referred to the Subcommittee on Health.
Co-sponsors of the bill in the House are:
Rep. Sessions, Pete [R-TX-32]*
Rep. Matheson, Jim [D-UT-4]
Rep. Langevin, James R. [D-RI-2]
Rep. Ruppersberger, C. A. Dutch [D-MD-2]
Rep. Barr, Andy [R-KY-6]
Rep. Hanna, Richard L. [R-NY-22]
Rep. Blackburn, Marsha [R-TN-7]
Rep. Graves, Sam [R-MO-6]
Rep. Cassidy, Bill [R-LA-6]
Rep. Duncan, Jeff [R-SC-3]
Rep. Grimm, Michael G. [R-NY-11]
Rep. Schock, Aaron [R-IL-18]
Rep. Burgess, Michael C. [R-TX-26]
Rep. Capito, Shelley Moore [R-WV-2]
Rep. Guthrie, Brett [R-KY-2]
Rep. Rogers, Mike J. [R-MI-8]
Rep. Hultgren, Randy [R-IL-14]
Rep. Heck, Joseph J. [R-NV-3]
Rep. Wilson, Joe [R-SC-2]
Rep. Stivers, Steve [R-OH-15]
Rep. Long, Billy [R-MO-7]
Rep. Walden, Greg [R-OR-2]
Rep. Roe, David P. [R-TN-1]
Rep. Marchant, Kenny [R-TX-24]
Rep. Luetkemeyer, Blaine [R-MO-3]
Rep. Amodei, Mark E. [R-NV-2]
Rep. Harris, Andy [R-MD-1]
Rep. Fitzpatrick, Michael G. [R-PA-8]
Rep. Young, Don [R-AK-At Large]
Rep. Murphy, Tim [R-PA-18]
Rep. Flores, Bill [R-TX-17]
Rep. Lance, Leonard [R-NJ-7]
Rep. Gerlach, Jim [R-PA-6]
Rep. Shimkus, John [R-IL-15]
Rep. Boustany, Charles W., Jr. [R-LA-3]
Rep. Wittman, Robert J. [R-VA-1]
Rep. Ruiz, Raul [D-CA-36]
Rep. Kinzinger, Adam [R-IL-16]
Rep. Buchanan, Vern [R-FL-16]
Rep. Johnson, Bill [R-OH-6]
Rep. Fleming, John [R-LA-4]
Rep. Farenthold, Blake [R-TX-27]
Rep. Latta, Robert E. [R-OH-5]
Rep. Ribble, Reid J. [R-WI-8]
Rep. Scalise, Steve [R-LA-1]
Rep. Bucshon, Larry [R-IN-8]
Rep. Thornberry, Mac [R-TX-13]
Rep. Coffman, Mike [R-CO-6]
Rep. Bonner, Jo [R-AL-1]
Rep. Sensenbrenner, F. James, Jr. [R-WI-5]
Rep. Latham, Tom [R-IA-3]
Rep. Hartzler, Vicky [R-MO-4]
Rep. Bishop, Rob [R-UT-1]
Rep. McKinley, David B. [R-WV-1]
Rep. Young, Todd C. [R-IN-9]
Rep. Roskam, Peter J. [R-IL-6]