Joint Committee on the Judiciary
The Massachusetts Health & Hospital Association (MHA), on behalf of its member hospitals, health systems, physician organizations, and allied healthcare providers, appreciates this opportunity to offer testimony regarding medical malpractice, treble damages and public charities.
MHA strongly supports HB1151. This legislation seeks to clarify several statutory provisions related to medical malpractice based on recent Supreme Judicial Court rulings. Overall, HB1151 will decrease unnecessary administrative costs within the healthcare system while also advancing the improvement of healthcare practices and services. This bill expands the application of peer review standards to accountable care organizations and other entities, which will allow integrated care organizations to conduct quality improvement activities as the patient moves from one level of care to another. This is a timely and critically important clarification to current law. Secondly, the bill would ensure the rates set for damages and interest rates in malpractice awards are set at the current federal funds rate plus two percent. The bill would also clarify that malpractice awards should be determined based on the actual findings of negligence and harm caused by a provider. Lastly, the bill offers meaningful solutions to recent cases that have been brought against providers of liability coverage for failure to settle a claim prior to a judgement being entered in a case.
HB3419 / SB1028 would bring important equity to the application of penalties related to violations of the state’s wage and hour laws. Under Chapter 149 of the General Laws, all violations of Massachusetts wage and hour statutes are subjected to mandatory treble damage awards with no available defense. This means that any and all alleged violations, including inadvertent violations or omissions, are considered to be outrageous in nature and the result of an employer possessing evil motive or reckless indifference to the well-being of employees. This standard unfairly and overly penalizes employers for violations committed without intent. HB3419 / SB1028 would correct this inequity by limiting the current extra-punitive application of treble damages to those instances of “willful” violations of the law. This important bill recognizes that errors and mistakes can be made, and in such unintentional instances employers should not be subject to onerous punishment.
MHA is opposed to HB813 / SB996, which seeks to entirely eliminate the liability cap for any charitable organization. During a time of continued cuts to non-profit organizations including hospitals that provide critical and timely care to a large population of Medicare and Medicaid patients – and which are held to significant requirements and limitations pursuant to their non-profit status -- it is important that public protections are in place to help preserve continued access to vital healthcare services in the commonwealth. Many hospitals are operating under slim margins. Removing this public protection for such organizations would affect access to community-based services and programs, as facilities would have to allocate already-limited funding to increased liability coverage.
MHA strongly opposes HB3331, which imposes an inappropriate and limiting definition of a charitable organization for purposes of charitable immunity protections. Under Section 222 of Chapter 224 of the Acts of 2012, the legislature amended the charitable immunity cap to increase the amount that applies to medical malpractice awards, as compared to any other suit that is filed against a charitable organization. Specifically, the legislature adopted a $100,000 cap for medical malpractice claims targeting healthcare providers. This provision of Chapter 224 was developed after careful consideration and agreement by healthcare providers, malpractice attorneys, legislators, and other public officials. HB3331 would undo these efforts by limiting any charitable immunity to small organizations whose operating revenues are entirely derived from donations. HB3331 fails to take into any consideration that hospitals, while considered large charitable organizations, derive a majority of their revenue from public programs like Medicare and Medicaid and are held to strict requirements and limitations in order to preserve their nonprofit status. Removing the current charitable immunity protections threatens hospital charitable assets and the ability to provide essential healthcare services and a broad range of important community benefit programs. Hospitals and related healthcare services are employment drivers in the commonwealth and provide 24/7 emergency level services, often at an operating loss. They ensure that the care they provide meets the highest standards, measured through numerous federal, state, and national accreditation forums. HB3331 proposes treating charitable organizations differently based on the size of the organization and their operating revenue, rather than on standards that were developed based on broad stakeholder support. For similar reasons, MHA also opposes SB841, which would raise the agreed-upon cap under Chapter 224 to $125,000.
MHA is also opposed to HB3656 which would hold a practitioner who issues a prescription for a controlled substance that contains an opiate liable for the payment of the first 90 days of in-patient hospitalization costs, if the patient develops a substance use disorder and is subsequently hospitalized. MHA and our member hospitals are dedicated to addressing the opioid epidemic and providers and practitioners have taken significant steps to reduce opioid prescribing. This legislation takes a narrow view of a complex issue, and MHA believes that there are far better, more comprehensive policies to further the commonwealth’s progress in addressing this epidemic.
MHA is opposed to SB986, which seeks to limit compensation for certain employees within a nonprofit organization or public charity. While the hospital community does not compensate board members for their services, we are very concerned with any effort to limit salaries for staff that are managing multifaceted and sophisticated organizations. Hospital boards, comprised of community leaders and local experts, consistently follow a thoughtful and deliberate process in determining executive compensation, based on federal and state rules and national standards. In addition, an independent panel drawn from a hospital’s board of trustees is typically charged with evaluating and developing compensation based on benchmark data from similar organizations, reports from independent consultants, and reviews of national- and state-level financial filings. To attract and retain qualified leadership, hospital boards must have the unfettered ability to set compensation levels that are competitive to other similarly-sized organizations. Many hospital CEOs also manage an array of healthcare services beyond the hospital walls, including physician groups, home health organizations, and primary care clinics. Executives must have the abilities required to address community concerns, interpret government regulations, and navigate complicated payment relationships with physicians. Their compensation reflects the necessary skills, education, and experience to meet the demands of the position. Imposing arbitrary caps such as those suggested by SB986 will prevent non-profit organizations like hospitals from recruiting, retaining and appropriately rewarding the most talented and able leaders.
Thank you for the opportunity to offer testimony on this matter. If you have any questions regarding this testimony, or require further information, please contact Michael Sroczynski, MHA's Senior Vice President of Government Advocacy at (781) 262-6055 or msroczynski@mhalink.org