When the Task Force on Affordable Automobile Insurance met on Feb. 23, members of the committee heard from an attorney and an orthopedic surgeon who offered what they thought would be a “realistic target” for tort reform that the task force should consider when it makes recommendations for legislation to reduce automobile insurance rates in Louisiana.
Dr. David W Aiken, whose practice is in Metairie, and Robert B. Nolan, an attorney with Adams and Reese in New Orleans, essentially argued for judge and jury awards to limit a doctor’s part of the damage award to the amount prescribed for the procedures performed in the medical fee schedule used by the Louisiana Office of Workers’ Compensation.
Aiken told the panel that medical professionals are billing 10 to 30 times the “going rate” for the services they render to plaintiffs in personal injury lawsuits. Aiken led off his presentation with slides of actual doctors’ bills that demonstrate his assertion. In his tables, he compared doctors’ charges for various procedures with what United Health, Blue Cross and Medicare routinely pay for the same procedure/service.
Apparently, all a judge or jury ever gets to see when determining damage awards is the bill from the doctor. The judge or jury is never privy to what doctors actually get paid by health insurers. The judge or jury never knows that Dr. Y is billing $15,775 for a low back pain injection when Blue Cross pays $775.34 and United Healthcare pays $721.47 for the same procedure, as is the case in one of Aiken’s examples. The upshot is, when damages are awarded, the doctor gets paid whatever is billed.
Under Aiken’s proposal any attorney, representing either the plaintiff or defendant in a personal injury tort, could submit certified medical charges to the Office of Workers’ Compensation to be repriced according to the current Workers’ Compensation fee schedule. Doctors can charge whatever they want, but the court cannot award more than what the fee schedule prescribes.
Aiken believes the workers’ comp fee schedule has rates that are 15 to 20 percent above Blue Cross, United Healthcare and Medicare. He treats workers’ comp injuries and feels adequately compensated.
Sen. Kirk Talbot, R-River Ridge, who chairs the task force and the Senate Insurance Committee, commented that workers’ comp fees are currently stable and uniform for the most part; whereas, years ago there was a huge workers’ comp problem in Louisiana until the Legislature fixed the problem.
The heart of the workers’ comp success is the fee schedule, Aiken added.
There is no guess work in what doctors will get paid in workers’ comp, Talbot observed.
“We haven’t limited the right of the plaintiff,” Aiken said, and “attorneys aren’t targeted. Let them do what they want.” He believes such a system would encourage doctors to be more honest. “When you are charging 30 times more than the going rate, you know you are not doing the right thing,” Aiken said. He believes doctors will continue to treat the patients.
Aiken cited an example of a $50,000 award. The attorney gets 33 percent, or $16,500. The doctor’s bill is not inflated and is $5,000. That leaves the plaintiff with $28,500. In another example, the award is $100,000. The attorney gets 33 percent, or $33,000. The doctor’s bill is inflated and is $55,000. That leaves the plaintiff with $12,000.
“The current system is bad for the plaintiffs and bad for the citizens of Louisiana, Aiken said. “People will say that it’s okay because the insurance companies are paying for it. But where is the insurance company getting the money? They are getting it from the citizens of Louisiana.”
After some discussion the task force determined that RS 37:1285 provides for the State Board of Medical Examiners to discipline doctors for over charging.
Kevin Ainsworth, an attorney with Jones Walker in Baton Rouge, and Sen. Katrina Jackson, D-Monroe, both of whom are on the task force, questioned Aikens wanting to know if he had complained to the State Board of Medical Examiners about attorneys submitting bills for excessive amounts. He has not.
Jackson explained that “as an attorney we have an obligation to report unethical behavior of attorneys.” She suggested that Aiken go to the medical board to seek a resolution. Jackson expressed concern that Aiken was before the Legislature instead of the medical board first, and if the medical board does nothing, then seek a resolution from the Legislature.
Nolan agreed that issues of ethics should be reported. “Everyone in the room involved in a lawsuit knows that overcharges are being presented. So, is the plaintiff attorney obligated to report overcharges to the medical board?” he asked. He has not reported attorneys for presenting those medical overcharges to the court. “But it is on my agenda,” he said.
Nolan said he believes the problem stems from attorneys colluding with doctors. He pointed out that the amount a physician receives in workers’ comp cases has been worked out between medical providers and workers’ comp insurers, so they are fair.
Talbot is leaning toward legislation replicating the law in Alabama where all of the information relative to prices is admissible in court, and automobile insurance rates are “very reasonable.” He favors presenting everything to the jury and judge: what is billed, what is paid and what others bill.
“We all want to make the plaintiff whole,” Talbot said. “It is concerning to see these inflated medical costs. We are all victims.” As a juror, if he sees that an insurer pays $1,000, Medicare pays $800 and the doctor is charging $15,000, “I have an idea what’s too much.”
Talbot said he would reach out to the medical board to get information for the task force.