New Hampshire recently became the first state to enact a law that creates an “early offer” program for patients injured by medical malpractice. Under the program, an injured patient can opt to pursue an early settlement offer rather than litigate a claim. Critics say patients will not understand that accepting an early offer may severely limit their potential recovery.
The law excludes certain types of damages and includes a “loser pays” provision that requires the patient to post a bond if he or she rejects the offer and pursues litigation. “It may do great harm to people with substantial injuries who don’t understand their rights,” said Manchester, N.H., lawyer Leslie Nixon.
Patients cannot recover noneconomic damages under the law, and the economic damages it allows do not include future earning capacity. “It takes advantage of people who are vulnerable,” said lawyer William Woodbury of Laconia, N.H. “It will disproportionately affect the elderly, stay-at-home parents, and children—people without an income, because you can’t recover for pain and suffering or loss of enjoyment of life. They will not be made whole now.”
To participate in the program, the patient signs a waiver, and then the medical provider either extends a settlement offer or declines to do so within 90 days. The law states that if the patient rejects the offer and “does not prevail in an action for medical injury against the medical care provider by being awarded at least 125 percent of the early offer amount, [the patient] shall be responsible for paying the medical care provider’s reasonable attorney’s fees and costs” incurred during the early offer process. To ensure that the patient can pay these fees and costs, he or she must post a bond.
“Our clients don’t have that kind of money,” Woodbury said.
“To call this an early ‘offer’ program is an injustice to the concept of an offer,” said Gabriel Teninbaum, a Suffolk University Law School professor who has spoken out against such programs. “Once a patient has been talked into participating, turning down the offer would put the patient at an unacceptably high personal risk.”
Woodbury expressed concern that insurance liaisons will show up at injured patients’ bedsides with waivers, and that patients with chronic conditions will be offered lump sums before they know the extent of their injuries or future medical expenses.
If the patient is not represented by counsel, the medical provider selects a “neutral advisor” to assist him or her. If the patient decides to withdraw the waiver, he or she must do so within five days of meeting with the advisor.
The bill was intended to lower health care costs and lengthy, costly litigation. But the idea that the medical malpractice system is raising costs is a myth unsupported by data, Nixon said.
Woodbury said he and other members of the New Hampshire Association for Justice fought the bill and then tried to convince bill sponsors to include safeguards in it. The two largest medical liability insurance carriers in the state also opposed the bill for several reasons, including that it would “force them to create an administrative infrastructure that would require them to raise their premiums,” Woodbury explained.
The campaign for the bill was part of a national tort “reform” effort by medical groups, which saw New Hampshire as “low-hanging fruit” because of an overwhelming Republican majority in the legislature, Woodbury said. The governor vetoed the bill, but the legislature overrode the veto. “It was like trying to stop a freight train,” Woodbury said.
Critics of the new law are concerned that similar laws will be introduced in other states. Woodbury noted that the New Hampshire law is “incredibly complex,” and “it is clear that many of the legislators who voted for it do not fully comprehend its ramifications.”
“If the medical-insurance industry is so serious about early offers, why not just make them?” asked Teninbaum. “Why force patients to give up categories of damages and penalize them for not accepting each and every offer made through this program?”