Bill that placed cap on damages in suits filed by Medicaid participants moves Scott toward a goal to protect doctors

During the 2010 campaign for governor, Rick Scott made two promises in an effort to help some doctors avoid expensive lawsuits.

"Rick Scott supports extending sovereign immunity to physicians acting on behalf of the Department of Health, as already provided to those acting as agents of the Department of Corrections, and providing some measure of indemnification to those physicians who primarily treat Medicare and Medicaid patients."

The idea of granting immunity to doctors who treat Medicaid patients was a subject of debate before Scott took office. In late 2010, a report commissioned by then-CFO Alex Sink warned that giving doctors who treat Medicaid patients immunity from lawsuits could cost taxpayers at least $69 million a year. The report also stated that extending sovereign immunity to Medicaid providers could be challenged on the grounds that providers aren't truly agents of the state. Sink, a Democrat, lost to Republican Scott in November 2010. Her campaign was backed by trial lawyers while his received the support of the Florida Medical Association.

Sovereign immunity bars lawsuits against the state or political subdivisions for the torts of officers or employees unless the immunity is expressly waived. Instead of holding the employee or agent liable, the state defends the claim.

Medicaid is a partnership of the federal and state governments that provides health services for low-income people and is the second-largest program in the state behind education -- representing more than 25 percent of the budget in 2010-2011. Medicare, a federally-run program, is a health insurance program for seniors.

Florida House Bill 7109 included a limit on noneconomic damages for medical negligence. The bill passed the House 80-39 and Senate 26-12 May 6 as amended and was approved by Scott in June. The bill analysis explains:

"The limitation will apply when a Medicaid recipient brings an action for personal injury or wrongful death alleging medical negligence by the practitioner. The amount of noneconomic damages is limited to $300,000 per person; however, no practitioner individually will be liable for more than $200.000. Additionally, the bill creates an exception and the limitation will not apply if the Medicaid recipient pleads and proves, by clear and convincing evidence that the practitioner acted in a wrongful manner. 'Wrongful manner' means in bad faith or with malicious purpose or in a manner exhibiting wanton and willful disregard of human rights, safety, or property."

State law defines "noneconomic damages” as nonfinancial losses that would not have occurred but for the injury giving rise to the cause of action, including pain and suffering, inconvenience, physical impairment, mental anguish, disfigurement, loss of capacity for enjoyment of life, and other nonfinancial losses to the extent the claimant is entitled to recover such damages under general law, including the Wrongful Death Act.

That bill placed a cap on damages but that isn't sovereign immunity, said Jeff Scott, general counsel for the Florida Medical Association.

"The way that bill started out was a discussion about originally giving physicians sovereign immunity for treating Medicaid patients," Scott told PolitiFact Florida in an interview. "We had a conversation with folks in the Legislature who supported that idea, the governor supported it, we were all set to do that. When it got down to crafting the actual language it became clear that an easier way to go rather than substitute the state for physicians would be to limit damages -- that's an easier sell."

Since the legislation passed, Gov. Scott "asked his policy, legal and health experts to look at ways to move toward granting full sovereign immunity, or other options that would best serve Florida"s patients, health care providers, and taxpayers," Scott spokesman Brian Burgess said in an e-mail. Burgess said that that effort relates to doctors who treat Medicaid patients. In our conversations with Burgess and attempts to obtain information from a Department of Health spokeswoman we heard no indication that anything has happened under Scott's tenure to provide sovereign immunity to doctors at the Department of Health.

The second goal is intended to encourage doctors to see Medicaid and Medicare patients. We'll focus on Medicaid here because there isn't a shortage of doctors in Medicare, according to Alan Levine, a former state secretary of Florida's Agency for Health Care Administration and chair of Scott's health and human services transition team.

Scott promised to provide "some measure of indemnification" to doctors who primarily treat Medicare and Medicaid patients. HB 7109 placed a cap on damages for doctors who treat Medicaid patients. But does that qualify as a measure of indemnification?

We turned to two law professors for an answer: Robert Jerry, an expert in contracts as well as health insurance at the University of Florida, and Mary Coombs who teaches and writes in the areas of torts and law and medicine at the University of Miami.

" 'Indemnity' is a sum paid by A to B for the purpose of compensating B for a loss. ... Thus, a cap on damages -- i.e., a limit on what one party can recover in a claim against the other -- is not really the same thing as indemnification," Jerry said in an e-mail. "A cap prevents an aggrieved party from recovering compensation for a portion of the loss, i.e., the loss above the cap. ... But no one is 'indemnifying' the doctor for his/her liability above the cap; rather, the physician is made immune from responsibility for the loss above the cap. So, in my opinion, it is incorrect to refer to a cap as 'some measure of indemnification.' It is true that a cap protects the physician in the same way that indemnification would do so, but the cap is not, in and of itself, indemnification"

Coombs noted the limits of the cap since it only applies to non-economic damages: "So if, for example, a doctor committed malpractice in a way that caused serious economic damages (e.g. future expenses for medical care or rehabilitation or the need for assistance, such as becoming paraplegic) these are not limited; (2) it only applies to Medicaid, not Medicare; and (3) it applies even if this is the only Medicaid patient Dr. X ever treated, not just those 'who primarily treat' Medicaid (although as a practical matter many physicians don"t ever treat any Medicaid patients!)"

How Scott fared

Scott made a two-part promise when he said: "Rick Scott supports extending sovereign immunity to physicians acting on behalf of the Department of Health, as already provided to those acting as agents of the Department of Corrections, and providing some measure of indemnification to those physicians who primarily treat Medicare and Medicaid patients." We couldn't find any evidence that the first half of the promise -- extending immunity to Department of Health doctors -- has occurred. On the second half, the Legislature passed a bill -- and Scott signed -- that placed a cap on damages in cases filed by Medicaid recipients. This doesn't equate to "indemnification," but it meets Scott's broader goal of limiting doctors' exposure in exchange for treating Medicaid recipients. We rate this promise In the Works.