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Proposal to Cut Venue Rule in Medical Malpractice Cases Sparks Debate

Kim Kocher, (left) and Dan Ferhat, (right) of White and Williams.

The Civil Procedural Rules Committee’s proposed rescission of the venue rule in medical malpractice cases has sparked spirited debate in legislative, medical, legal and underwriting spheres. The committee’s process is confidential. The publicly available information is limited. But, no known data supports the committee’s conclusion that the rule “no longer appears warranted,” see 48 Pa. Bulletin 7744 (Dec. 22, 2018). Health care providers, insurers, members of the defense bar and related organizations, therefore, strongly support the Supreme Court’s recent decision to defer consideration of any amendment to the rule pending the report of the Legislative Budget and Finance Committee on the potential effects of the proposed rule change.

Reform Measures Addressed the Medical Malpractice Crisis

The well-documented insurance crisis of the early 2000s was a health care crisis, see Bovbjerg et al., "Understanding Pennsylvania’s Medical Malpractice Crisis: Facts about Liability Insurance, the Legal System, and Health Care in Pennsylvania," The Project on Medical Liability in Pennsylvania funded by The Pew Charitable Trusts (2003) (the Pew Study). It is well-recognized that skyrocketing premiums caused a significant decline in the growth rate of the numbers of physicians from 1997 to 2000. The 2003 Pew Study expressly concluded that the largest cost component affecting the affordability of coverage was the rising cost of legal claims.

In response to the health care crisis, the Pennsylvania legislature and the Pennsylvania Supreme Court adopted reform measures to restore balance to the medical liability insurance market and ensure continued access to high quality health care services. The centerpiece of the effort, the Medical Care Availability and Reduction of Error (MCARE) Act, contains multiple provisions designed to rein in costs. In conjunction with the MCARE Act, the Supreme Court promulgated rules to further these objectives: the Certificate of Merit Rule, Pa. R. Civ. P. 1042.3, which requires a qualified physician to attest to the legitimacy of a potential claim before a plaintiff may bring suit and the medical malpractice venue rule, Pa. R. Civ. P. 1006(a.1), and its related counterparts, which locate venue in the county where the care at issue was rendered.

The professional liability venue rule was the product of deliberations by all three branches of government through the Interbranch Commission on venue. The court adopted Rule 1006(a.1) to redress the undue expansion of venue, due to the consolidation of healthcare systems and prevent forum shopping, in medical malpractice actions, as in Searles v. Estrada, 856 A.2d 85, 92 (Pa. Super. 2004).

The Reforms Are Working

The available data demonstrates that the reform measures are working. In the 16 years since the passage of MCARE and the amendment of the venue rules, statistics maintained by the Administrative Office of Pennsylvania Courts (AOPC) indicate that the total number of medical malpractice lawsuits has declined statewide, see AOPC-Case Load Statistics. The average number of medical malpractice cases filed statewide since 2002 has dropped approximately 50 percent. The overall reduction in case filings demonstrates that the Certificate of Merit requirement has likely had the intended effect of a reduction in the filing of frivolous lawsuits.  Wilson v. El-Daief, 964 A.2d 354, 370 (Pa. 2009).  As for the specific intended effect of the venue rule, case filings in Philadelphia County decreased while filings in other counties, especially neighboring Montgomery County, increased.

The AOPC data demonstrates that the decline in the number of recoveries or plaintiff’s verdicts is essentially proportionate to the overall 50 percent decline in case filings. In other words, there is no meaningful change in the percentage rate of defense verdicts after the reform measures. Nor does the data indicate any decline in annual dollars paid out disproportionate to the drop in case filings. To the contrary, the data from the National Practitioner Data Bank (NPDB) indicates that the percentage of total reported dollars paid out per year is proportionately greater than the 50 percent drop in filings, see NPDB Analysis Tool. In fact, while there has been approximately a 50 percent drop in case filings statewide since 2002, the NPDB data demonstrates less than an approximate 40 percent drop in total average reported payouts per year statewide since 2002. By all known metrics, since the enactment of the MCARE-related reform measures, the insurance market has stabilized and the growth rate of the number of physicians has steadily increased.

As justification for repeal of the venue rule, the Civil Procedural Rules Committee cited the AOPC data showing a reduction in medical malpractice case filings in the last 15 years, and additionally noted that “it has been reported to the committee that this reduction has resulted in a decrease of the amount of claim payments resulting in far fewer compensated victims of medical negligence.” While the AOPC data does reflect a decline in medical malpractice filings, the decline in filings actually demonstrates the continued success of the 2003 reform measures, particularly the Certificate of Merit requirement. Otherwise, the source of the report, referenced by the committee, regarding under-compensation of claimants is not publicly available.

No publicly available data indicates that the medical malpractice venue rule denies the medical malpractice plaintiff access to justice. The 2017 report of the Patient Safety Authority, cited by advocates of repeal, does not reflect the incidence of medical negligence in Pennsylvania, see 2017 Annual Patient Safety Authority Report at 65; 40 P.S. Section 1303.302. Nor does the patient safety data demonstrate any under-compensation of medical negligence. Nothing in any of the reform measures prohibits the patient, with a meritorious clam of medical negligence, from pursuing recovery for his injuries. The constitutional guarantee of due process is a fair trial not a maximum recovery, a tenet which is embodied in the MCARE declaration of policy (noting that the reform measures are designed “to ensure a fair legal process and reasonable compensation for persons injured due to medical negligence ... .”

Repeal of the Venue Rule May Reignite the Health Care Crisis

The reasons for the medical malpractice venue rule—the expansion of venue and forum shopping—still exist. Repeal of the rule will allow for forum shopping in Philadelphia County and other venues where verdicts are known to be highest. A return to an era where a disproportionate share of medical malpractice cases is brought in Philadelphia County will almost certainly result in increased settlement amounts and jury awards which will, in turn, increase premiums.

No data indicates that repeal of the rule will not adversely affect the availability of insurance and, consequently, access to health care in the commonwealth. Although the 2003 reform measures redressed the healthcare crisis of the 2000s, there is no current additional capacity in the primary insurance market in Pennsylvania. To the contrary, the Pennsylvania Department of Insurance reviewed the basic insurance market capacity in a 2017 report, finding “it cannot be determined that additional basic insurance capacity is currently available for calendar year 2018.” If history is any indication, returning to the pre-reform era will inure to the detriment of Pennsylvania’s citizens in the form of higher costs and reduced access to physicians and health care resources.

The prevention of forum shopping due to the expansion of venue carries even greater import today than in 2002 with the continued consolidation of health care systems in the commonwealth. And, the greater time constraints imposed on individual providers to defend claims in distant counties will likely disrupt daily patient care for thousands of patients across the commonwealth, particularly in rural counties where access and availability are already limited.

The available data, therefore, demonstrates that the venue rule continues to play a key role in stabilizing the health care market; no data indicates that the rule has deprived any injured patient access to justice; and every indicator shows a repeal of the rule would run a great risk of reigniting the health care crisis that necessitated reform in the first place. To borrow from the wisdom of Justice Ruth Bader Ginsberg, throwing out the medical malpractice venue rule when it has worked and is continuing to work to curtail forum shopping is like throwing away your umbrella in a rainstorm because you are not getting wet, see Shelby County v. Holder, 570 U.S. 529, 590 (2013) (Dissenting Opinion).

Kim Kocher, a partner at White and Williams, focuses on appellate advocacy in a wide range of practice areas, including medical negligence, products liability, insurance coverage, premises liability and constitutional law. She has briefed and argued appeals in the Pennsylvania Supreme Court, New Jersey Supreme Court, Delaware Supreme Court and the U.S. Courts of Appeals for the Second and Third Circuits.

Daniel J. Ferhat, a partner with the firm, focuses his practice on medical malpractice litigation and general liability matters. As a trial lawyer, he defends hospitals, physicians, nurses and other health care practitioners against professional liability claims at the trial court and appellate court levels.