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Punitive Damages, Licensure Board Reporting, and Oral Chemotherapy Insurance Coverage

By Scot Chadwick

​All indications are that Pennsylvania will not have a new state budget in place when the fiscal year ends on June 30.

Gov. Wolf, a Democrat, and the Republican-dominated state House and Senate remain far apart on several big issues, including the state income tax, the state sales tax, a natural gas extraction tax, property tax reform and education spending, liquor privatization and pension reform. I’m sure I missed a few, but you get the idea.

As I write this, the most likely scenario is that the Republican legislature will pass an on-time, no tax increase budget that does not address the governor’s proposed tax and spending increases, and then the blame game will begin when Wolf vetoes all or part of it. In my three decades in and around this process, I’ve seen these stalemates resolve quickly and I’ve seen them drag on for months. At this point I have no idea how this one will play out.

Meanwhile, there continues to be movement in the House and Senate on a number of health care-related measures.

Punitive Damages

In 1996 the General Assembly enacted a cap on punitive damages that can be assessed against physicians in medical liability actions, limiting those awards to no more than 200 percent of the compensatory damages. In other words, if a jury awarded a plaintiff $100,000 for medical bills, lost wages, and pain and suffering, an additional award of punitive damages, if warranted due to egregious conduct by the defendant, could not exceed $200,000.

Although punitive damages are rarely awarded against physicians in medical liability actions, this provision can play an important positive role, primarily in settlement negotiations, by eliminating the calculation that a runaway jury might issue an award that bears little or no connection to the seriousness of the injuries suffered by a plaintiff.

On June 25, the Senate passed SB 747, legislation that would extend this protection to personal care homes, assisted living communities, and long-term care nursing facilities, by a vote of 40-9. These entities have been under assault from personal injury lawyers in recent years, and are seeking the same protection extended to physicians 19 years ago.

While PAMED supports the bill, we’re watching it closely to make sure it doesn’t also become a vehicle for trial lawyer-generated amendments that would be counterproductive and poor public policy. Having cleared the Senate (traditionally the more difficult chamber for tort reform measures), the bill now moves to the House.

Licensure Board Reporting

Two weeks ago, I reported that SB 538, which would impose new reporting requirements on state licensees (everybody from crane operators to landscape architects to physicians and other health care professionals) who run afoul of the criminal law or another state’s licensing body, had unanimously passed the Senate.

To refresh your memory, the bill would require anyone who holds a license, certificate or registration issued by the Bureau of Professional and Occupational Affairs to, as a condition of licensure, certification or registration, report to their licensing board or commission within 30 days (1) any disciplinary action by a licensing agency of another jurisdiction; and (2) a finding or verdict of guilt, an admission of guilt, a plea of nolo contendere, probation without verdict, a disposition in lieu of trial or an accelerated rehabilitative disposition (ARD) of any felony or misdemeanor offense and any drug or alcohol related summary offense.

Depending on the nature of the action reported, the licensing boards and commissions would be authorized to issue temporary suspensions where warranted. In the case of a legal commitment to an institution due to mental incompetency or a felony conviction under the Controlled Substance, Drug, Device and Cosmetic Act (or its equivalent in another state), the suspension would be automatic.

On June 24, the House Professional Licensure Committee amended the bill, rewording the second point of the requirement set forth above, and then approved it, moving it closer to consideration by the full House. Should the House pass it, as I fully expect, the bill will need to go back to the Senate for a vote on approval of the House amendment.

Oral Chemotherapy Insurance Coverage

Another bill that moved a step closer to enactment is HB 60, which provides that whenever a health insurance policy contains coverage for intravenously administered or injected chemotherapy medications to treat cancer, the policy may not provide coverage or impose cost sharing for an orally administered chemotherapy medication on a less favorable basis than the coverage it provides or cost sharing it imposes for intravenously administered or injected chemotherapy medications.

The legislation would not preclude health insurance policies from requiring an enrollee to obtain prior authorization for the oral medication, and it only applies to oral chemotherapy medications where an intravenously administered or injected chemotherapy medication is not equally effective.

The bill, which passed the House 197-3 back in February, was amended and approved by the Senate Banking and Insurance Committee on June 25, putting it in position for full Senate ratification, I suspect in the near future. Senate approval would send the bill back to the House for concurrence in Senate amendments, a necessary step before the bill reaches the governor’s desk.

I expect a lot more health care-related legislative activity in the coming days, in addition to the anticipated state budget machinations, so check back often.

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