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(June 2005) Three years ago, then-Governor Mark Schweiker signed into law Act 13, the MCARE Act. Pennsylvania set the stage for meaningful reform of the state's medical liability system and for the state to gain national attention for its public policy addressing medical liability and patient safety.

After three years, a study by the Joint State Government Commission, numerous judicial reforms, the creation of the Patient Safety Authority, and more, has the climate for medical professionals and patients in Pennsylvania improved? IssuesPA examined the MCARE Act - to get a better understanding of what was passed, and the impact the law has had.

What changed because of the MCARE Act?

The MCARE (Medical Care Availability and Reduction of Error) Act tackled three areas: patient safety initiatives, financial reforms and tort reforms.

#1. Patient Safety Initiatives. To help reduce the number of medical malpractice incidents and to improve safety for all patients, the MCARE Act created a Patient Safety Authority (PSA) to review medical errors and make recommendations on improving patient safety. Hospitals are required to report medical errors or serious events to the PSA as they occur. Medical facilities also are required to develop and implement patient safety plans.

The law requires doctors to report any medical malpractice claims against them to the state licensing board. In addition, medical boards are obligated to investigate reports of malpractice and can increase fines for licensure violations to $10,000. The law includes penalties for failure to report incidents. And it has an expanded continuing medical education requirement, to 100 hours per 2-year licensure period.

In 2004, the Patient Safety Authority (PSA) fully implemented its secure, web-based Pennsylvania Patient Safety Reporting System (PA-PSRS). Health care providers across the state must report medical errors through PA-PSRS. The PSA has begun its analysis and quarterly reporting to advise medical facilities of immediate changes that can be instituted to reduce serious events and incidents. The reports are available online.

#2. Financial Reforms. The MCARE Act contained efforts to help doctors with the increasing costs of malpractice insurance and to improve the structure of Pennsylvania's liability insurance system. The law created the MCARE Fund, a government-controlled financial pool that replaced the old Medical Professional Liability Catastrophe Loss Fund (the CAT Fund, a patient compensation fund managed by the state to provide resources for excess coverage in medical malpractice cases). The MCARE Fund supplements traditional medical malpractice insurance using assessments on doctors as well as a portion of punitive damage awards. Provided there are sufficient market-driven options for full liability coverage (determined by the state Department of Insurance), the MCARE Fund is scheduled to be phased out by 2009.

Other financial reforms included the following:

• Modifying the collateral source rule so claimants cannot recover damages for loss compensated by another source.
• Allowing payment for future damages to be made over time unless the future damages are less than $100,000.
• Transferring 25% of punitive damage awards to the MCARE fund (the remainder is paid to the claimant).
• Reducing liability insurance minimum coverage from $1.2 million to $1 million.
• Discounting MCARE payments by part-time physicians up to 10%.
• Requiring basic insurance carriers to offer discounts to medical facilities for reducing medical errors through implementation of a recommended patient safety program.

#3. Tort Reform. The MCARE Act established a 'statute of repose,' meaning adult patients have seven years to discover injury or negligence. Previously, there was virtually no discovery time limit. A two-year statute of limitation still applies for filing a lawsuit. Therefore, a potential plaintiff has seven years to discover an injury or negligence, and two years after discovering injury or negligence to file a lawsuit against the defendant. This means there's a maximum window of opportunity of nine years from time of injury.

The law also limited vicarious liability of hospitals and some medical professionals, meaning liability limitations protect hospitals and medical centers in cases where the policies and practices of the institution didn't play a role in the negligence. This prevents hospitals and medical centers from being named in a lawsuit simply for their presumed deep pockets. Further, doctors or other medical professionals can be dismissed from a lawsuit if the health care provider files an affidavit confirming they weren't part of the alleged incident or negligence.

Too early to gauge success?

Yes. It's too soon to see the full impact of the MCARE Act and its new systems and reforms in the health care system. For example, consider patient safety. Developing and implementing new or modified legal or reporting systems takes time. The Patient Safety Authority fully implemented its data collection system to begin collecting data statewide just last summer. Though the PSA has begun reporting findings, there isn't yet a good measure of reduced errors. Pennsylvania's reform efforts are considered cutting edge, and policymakers here and elsewhere are watching to see the impact of the MCARE Act and the reforms that followed. Though three years may not be long enough to realize the full impact of the MCARE reforms, policymakers should be encouraged by - and perhaps take advantage of - the momentum toward change.