September 22, 2017
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PHCA Praises House Judiciary Committee for Favorable Vote on Lawsuit Abuse Reform

H.B. 1037 protects long-term care providers from predatory out-of-state law firms

HARRISBURG — The Pennsylvania Health Care Association (PHCA) today commended members of the state House Judiciary Committee for approving House Bill 1037 and sending the legislation to the full House for consideration. This lawsuit abuse reform measure is crucial for Pennsylvania’s most vulnerable citizens and those who provide their care.

This legislation, if enacted, would limit punitive damages awards up to 250 percent of the amount of compensatory damages for long-term care providers, including skilled nursing facilities, assisted living residences and personal care homes. It would protect hundreds of providers from frivolous lawsuits brought by out-of-state predatory law firms. The high legal costs paid by Pennsylvania long-term care providers as a result of these lawsuits inhibit job growth, increase health-care costs and limit access to medical care.

“This legislation does nothing to limit compensatory damages for individuals who may have been harmed, which includes compensation for pain and suffering in Pennsylvania, which is often a significant award for the individual” PHCA President and CEO W. Russell McDaid said. “Nor does it change the definition of punitive care in the MCARE law in effect for physicians since 2002.”

McDaid expressed “heartfelt gratitude” to state Rep. Warren Kampf, the prime sponsor of H.B. 1037, and House Judiciary Committee Chairman Ron Marsico, for their tireless advocacy and leadership in this important fight to benefit Pennsylvania residents and their providers of care.

According to a recent actuarial analysis on liability costs, the liability cost per Medicaid day in Pennsylvania is $5.39. Given that Medicaid paid for about 19.35 million days of care in 2015, more than $104 million of Pennsylvania Medicaid dollars was spent on liability related costs in 2015, much of this in contingency fees to out-of-state predatory lawyers. This is an increase of more than $9 million over previous expenditures.

Most of the $104 million could have been used to improve the quality of care and the quality of life for skilled nursing facility residents, McDaid said.

“Punitive damage reform is crucial for Pennsylvania’s long-term care providers in order to continue to provide quality care to our most vulnerable citizens. Excessive litigation and damage awards result in higher costs to Pennsylvania’s taxpayers and people residing in long-term care settings. These excessive awards also lead to decreased availability of quality care,” said McDaid.

The bill now heads to the House floor, where McDaid urged leadership to move swiftly and schedule a vote.

“We are hopeful that the state House will pass this bill quickly and send it to the Senate,” McDaid said, “It’s beyond time that we enact this common sense measure which will ensure that Pennsylvania tax dollars are spent on care for vulnerable Pennsylvanians in need of nursing facility care, not to line the pocket of predatory trial lawyers.”

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