Posts Tagged compensation

What Should You Consider When Planning Physician Compensation?

What Should You Consider When Planning Physician Compensation?

The changes in health care reimbursement and the rising costs of the health care business have prompted groups to look at options related to physician compensation. The addition of mid-level providers and ancillary services, the revenue and costs in a practice can look quite different than it did five to 10 years ago. A group may have adopted a compensation plan for collegiality based on keeping the group together long-term. This model is beneficial due to its simplicity, but only if the physicians worked at an equal pace and the costs were consistent among the group. It is rare to see this model, due to the fact that highly productive physicians want to be compensated for their work. Some physicians are more efficient and confident with electronic aids and can see more patients than their counterparts.

The ultimate goal in physician compensation planning is to ensure everyone believes the plan is fair, transparent and it rewards individual physicians for their work. Our team of accountants and consultants work to understand the goals of the group and the nuances that must be considered to arrive at a fair and compliant decision. The practice administrator’s opinion should be considered in compensation planning, but a trusted advisor is key to leading the effort due to the fact it is a sensitive subject that requires an objective opinion.

Six key issues are important when preparing for a change in physician compensation models. To begin, interview the physicians to get their thoughts on the current compensation structure and what should be considered in a new plan.  Secondly, review the segmentation of revenue by physicians and other billable providers. Dissect professional, technical and ancillary services and review for Stark Law implications related to physician compensation. Review employment contracts related to employed physicians or providers to assure the compliance of a proposed bonus structure.

In addition, analyze the overhead to assign costs as fixed, direct or variable categories. Fixed costs are consistent each month, such as; rent, administrative staff, equipment lease, etc. Variable costs change as the volume of service increases or decreases. Direct costs are those associated with each physician, such as individualized staff, equipment or other resources.

Fourthly, review nuances in the group related to medical directorships, mid-level supervision and lines of business, for example, Obstetrics vs. Gynecological services. Some groups are joining accountable care organizations or engaging is value-based contracts or capitated arrangements that require analysis to assure its effect on the compensation plan.

Fifthly, it is important to plan at least three options for the allocation of revenue, costs and bonus structure revealing the pros and cons for each arrangement. Place a quarter of historical data into a sample to reflect each option for every physician. This allows for questions and requested variations to arrive at the best decision for the group.

Lastly, the group and advisors should meet regularly after the new plan is implemented to address any unforeseen outcomes and continue the impact analysis of the plan.  As value-based revenue and other revenue streams evolve, it is reasonable to review the compensation plan at least every three years to assure practice changes aren’t adversely impacting the group.

Article contributed by Tammie Lunceford, Healthcare and Dental Consultant, Warren Averett Healthcare Consulting Group. Warren Averett is an official Gold Partner with the Medical Association.

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Medical Association’s 2018 State and Federal Agendas

Medical Association’s 2018 State and Federal Agendas

The Medical Association Board of Censors has met and approved the Association’s 2018 State and Federal Agendas. These agendas were developed with guidance from the House of Delegates and input from individual physicians. As the Alabama Legislature and U.S. Congress begin their work for 2018, additional items affecting physicians, medical practices and patients may be added to this list.

Download the Medical Association’s 2018 State and Federal Agendas (PDF)




The Medical Association supports:

  • Ensuring legislation “first do[es] no harm”
  • Extending the Medicaid payment bump for primary care to all specialties of medicine
  • Eliminating the health insurance-coverage gap for the working poor
  • Ensuring fair payment for patient care and reducing administrative burdens on physicians and medical practices
  • Strengthening existing tort reforms and ensuring liability system stability
  • Empowering patients and their doctors in making medical decisions
  • Continued physician compounding, dispensing of drugs
  • The same standards and reimbursements for telehealth and face-to-face visits
  • Training, education and licensing transparency of all individuals involved in patient care
  • Continued self-regulation of medicine over all areas of patient care
  • Increased state funding to upgrade the Prescription Drug Monitoring Program to a useful tool for physician monitoring patients at risk for drug interactions and overdose potential
  • Using data analytics to combat the drug abuse epidemic by strengthening research capabilities of pre-approved, de-identified prescription information
  • Maintaining the Alabama Department of Public Health as the repository for PDMP information to ensure continuity for prescribers and dispensers and security for patients
  • Standard opioid education in medical school so the physicians of tomorrow are prepared to face the realities and responsibilities of opioid prescribing


The Medical Association opposes:

  • The radical Patient Compensation System legislation
  • Legislation/initiatives increasing lawsuits against physicians
  • Non-physicians setting standards for medical care delivery
  • Tax increases disproportionately affecting physicians
  • Expanding access to the Prescription Drug Monitoring Program (PDMP) for law enforcement
  • Statutory requirements for mandatory PDMP checks
  • Further expansion of Maintenance of Certification (MOC) requirements
  • Changes to workers’ compensation laws negatively affecting treatment of injured workers and medical practices
  • Any scope of practice expansions that endanger patients or reduces quality of care
  • Biologic substitution legislation that allows lower standards in Alabama than those set by the FDA that doesn’t provide immediate notifications to patients and their physicians when a biologic is substituted, and that increases administrative burdens on physicians and medical practices




The Medical Association supports:

  • Meaningful tort reforms that maintain existing state protections
  • Reducing administrative and regulatory burdens on physicians and medical practices
  • Repeal of the Affordable Care Act and replacement with a system that:
    • Includes meaningful tort reforms that maintain existing state protections
    • Preserves employer-based health insurance
    • Protects coverage for patients with pre-existing conditions
    • Protects coverage for dependents under age 26
    • With proper oversight, allows the sale of health insurance across state lines
    • Allows for deducting individual health insurance expenses on tax returns
    • Increases allowed contributions to health savings accounts
    • Ensures access for vulnerable populations
    • Ensures universal, catastrophic coverage
    • Does not increase uncompensated care
    • Does not require adherence with insurance requirements until insurance reimbursement begins
    • Reduces administrative and regulatory burdens
  • Overhauling federal fraud and abuse programs
  • Reforming the RAC program
  • Prescription drug abuse education, prevention and treatment initiatives
  • Allowing patient private contracting in Medicare
  • Expanding veterans’ access to non-VA physicians
  • Reducing escalating prescription drug costs
  • A patient-centered MACRA framework, including non-punitive and flexible implementation of new MIPS, PQRS and MU requirements
  • Congressional reauthorization of CHIP (Children’s Health Insurance Program) at the current enhanced funding level
  • Better interstate PDMP connectivity
  • Eliminating “pain” as the fifth vital sign
  • Repealing the “language interpreters” rule
  • Requiring all VA facilities, methadone clinics and suboxone clinics to input prescription data into state PDMPs where they are located


The Medical Association opposes:

  • Non-physicians setting standards for medical care delivery
  • Publication of Medicare physician payment data
  • National medical licensure that supersedes state licensure
  • Legislation/initiatives increasing lawsuits against physicians

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What Have You Done for Me Lately?

What Have You Done for Me Lately?

“What have the Medical Association and ALAPAC done for me lately?”

It’s a question posed to me often, in various forms, by physicians whom I’m asking to join the Medical Association and contribute to ALAPAC. It’s a tough one to reply to – not for a shortage of answers – but for the difficulty, even for a seasoned communicator like myself, to encapsulate succinctly.

I like analogies, so here’s one to start: a legislative session is like a surgical procedure; hundreds of things can go wrong, and getting through one without incident is deemed a success. To reiterate: when nothing bad happens in a legislative session that is a victory. Preposterous? Allow me to elaborate.

It’s been attributed to everyone from Thomas Jefferson to Mark Twain, but the old adage “no one’s life, liberty or property are safe while the legislature is in session” certainly rings true. The Alabama Legislature may only be in session three days each week for three-and-a-half months (plus special sessions) a year, but just like with a surgical procedure, countless things can go wrong during that time.

Representing physicians at the legislature, the Medical Association is severely outnumbered. There are nearly 600 registered lobbyists in Alabama, many with clients – drug companies, health insurers, personal injury lawyers – interested in health care but whose corporate profits strategy or legislative goals are at odds with those of patients and physicians. I’ve heard physicians say they don’t like politics, that it’s dirty business. This is understandable but frankly, irrelevant. Feelings have no place here. Like it or not, politicians are in your business.

On average, a typical legislative session will see a combined 1,000 House and Senate bills introduced, with roughly 15 percent touching health care in some fashion. Over a four-year legislative cycle, that’s 600 “procedures” to get through with as few complications as possible. Some of these are initiatives the Medical Association supports, others will need tweaking through amendments or substitutes, still others will have no redeeming elements whatsoever and are outright opposed.

If that sounds simple in principle, it is not so in practice. To illustrate the complexity and unpredictability of an average legislative day, picture an emergency physician. At the State House, there is little warning of what daily catastrophes will present themselves or what will have to be triaged depending on severity. Committee testimony, one-on-one meetings with legislators, bill negotiations with opposing parties, these are all part of a typical legislative day. Getting through the day without any bad happenings is a success, even more so all 30 days of the session.

While it is the Medical Association’s role to lobby the legislature on issues important to physicians, it is the role of the Alabama Medical PAC (ALAPAC) to help elect candidates to office with whom physicians and the Medical Association can work on important health-related issues. Over just the past few legislative sessions alone, the Medical Association, with the help of ALAPAC-supported legislators, successfully saw passage of several important bills.

These include “virtual credit card” legislation to help medical practices from unknowingly getting hit with hidden processing fees in electronic payments from health insurers and RCOs; the chemical endangerment “fix” legislation protecting pregnant women and their doctors from prosecution for the issuance of legitimate prescriptions (after the courts issued a new interpretation of Alabama’s chemical endangerment of children law); and, direct primary care legislation, which ensures state government stays out of private contracts between physicians and their patients. The list also includes legislation related to increasing naloxone availability, establishing guidelines for interstate medical licensure, and preventing Medicaid cuts, to name but a few.

On the opposite end of the spectrum, other proposed legislation is so bad there is no “fixing” it, bills like the Patient Compensation System legislation from 2016. The PCS legislation would levy an $80 million tax increase on physicians to fund a new government-administered malpractice claims payout system that would deprive physicians and legitimately-injured patients of their legal rights, undo decades of medical liability reforms and make Alabama doctors appear – on the national claims database – to be practicing sub-standard medicine. This legislation was, with the assistance of ALAPAC-supported legislators, defeated.

In the same vein as the PCS bill, pharmaceutical legislation was introduced in 2017 that would (1) lower biologic pharmaceutical standards in Alabama law below those set by the FDA, (2) withhold critical health information from patients and their doctors and, (3) significantly increase administrative burdens on physicians. This legislation met the same fate as the PCS legislation, but both bills are expected to return in a future session. (Click here for a complete recap of the 2017 legislative session.)

Clearly, the Medical Association and ALAPAC have been hard at work for physicians and patients, from the primary care doctor to the sub-specialist. There is a natural tendency for physicians to associate and support their respective specialties, which they unequivocally should. At the same time however, the collective strength of a unified state medical society representing all physicians of all specialties and the patients they care for is much greater than any individual specialty on its own.

This article began with a question and so it is fitting to end with one: What have you done lately to help the Medical Association and ALAPAC succeed for you?

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U.S. House Passes Legislation to Repair Medical Liability System

U.S. House Passes Legislation to Repair Medical Liability System

The U.S. House of Representatives passed a comprehensive medical liability reform bill, H.R. 1215, the Protecting Access to Care Act of 2017 (PACA), by a vote of 218 to 210, which includes significant reforms to help repair our nation’s broken medical liability system, reduce the growth of health care costs, and preserve patients’ access to medical care. The AMA submitted a letter to Congress strongly supporting H.R. 1215.

PACA provides the right balance of reforms by promoting speedier resolutions to disputes, maintaining access to courts, maximizing patient recovery of damage awards with unlimited compensation for economic damages while limiting non-economic damages to $250,000. Importantly, H.R. 1215 includes language to protect medical liability reforms enacted at the state level. The CBO determined that H.R. 1215 would reduce federal health care spending by $44 billion over 10 years and reduce the deficit by $50 billion over the same period.

Proponents of the measure said it would help bring down costs of health care and increase the availability of doctors. They pointed to litigation reforms in California to lower medical malpractice liability insurance premiums for health care providers as the basis for the legislation considered on the House floor during debate.

“Health care costs are out of control due in large part to unlimited lawsuits and other problems ObamaCare failed to solve or ObamaCare made worse,” said Rep. Steve King (R-Iowa), the author of the bill.

The Medical Association had requested our Congressional Delegation to support the legislation and would like to thank the following members who voted for the bill: Alabama Reps. Robert Aderholt, Mo Brooks, Bradley Byrne, Gary Palmer, Mike Rogers and Martha Roby.

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CMS Updates Proposed Rule for MACRA; Eases Burden for Some Physicians

CMS Updates Proposed Rule for MACRA; Eases Burden for Some Physicians

The Centers for Medicare & Medicaid Services has unveiled a 1,058-page proposed rule updating the Medicare physician payment system implemented under the Medicare Access and CHIP Reauthorization Act of 2015 with changes to make it easier for small independent and rural practices to participate.

The proposed rule would make changes in the second year of the Quality Payment Program as required by MACRA. According to a statement from CMS, the goal is to simplify the program, specifically for small, independent and rural practices, while ensuring fiscal sustainability and high-quality care within Medicare.

“We’ve heard the concerns that too many quality programs, technology requirements, and measures get between the doctor and the patient,” said CMS Administrator Seema Verma. “That’s why we’re taking a hard look at reducing burdens. By proposing this rule, we aim to improve Medicare by helping doctors and clinicians concentrate on caring for their patients rather than filling out paperwork. CMS will continue to listen and take actionable steps towards alleviating burdens and improving health outcomes for all Americans that we serve.”

The proposal will allow for the exemption of small providers participating in the program by increasing the low-volume threshold to $90,000 or less in Medicare Part B charges or 200 or less Medicare patients annually. The original threshold was $30,000 in Medicare Part B charges or 100 Medicare patients. The agency believes the move will exclude about 134,000 clinicians from MIPS.

American Medical Association President David Barbe released a statement commending the CMS for hearing the concerns of practicing physicians. “Not all physicians and their practices were ready to make the leap, and many faced daunting challenges. This flexible approach will give physicians more options to participate in MACRA and takes into consideration the diversity of medical practices throughout the country,” he wrote.

The news may come as a relief for some clinicians. In March, Healthcare Informatics found 43 percent of more than 2,000 providers stated they needed help with MACRA preparation while 30 percent said that are not prepared at all. However, after exclusions, CMS estimates 36 percent of clinicians will be eligible for participation in 2018.

The American Academy of Family Physicians stated the regulation would help improve family physicians’ ability to participate in payment reforms successfully.

“We’re pleased that, consistent with the Department of Health and Human Services’ directive, CMS has taken steps to reduce administrative and regulatory burden,” John Meigs Jr., M.D., president of AAFP, said in the statement. “We’re equally pleased that CMS agreed with the AAFP recommendations on medical homes. For example, the financial risk borne by medical homes rolls out more slowly, providing more time for family physicians to move toward full participation in the Advanced Payment Model track. Equally important are the significant steps to reduce risk for practices of all sizes in the MIPS program.”


New Quality Payment Program Resources Available

The Centers for Medicare & Medicaid Services revamped the look of the Quality Payment Program website and posted new resources to help you successfully participate in your first year of the Quality Payment Program. READ MORE

Posted in: CMS, MACRA

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What If No One Was on Call [at the Legislature]?

What If No One Was on Call [at the Legislature]?

2017 Legislative Recap

In times of illness, injury and emergency, patients depend on their physicians. But what if no one was on call? Public health would be in jeopardy. However, the same holds true during a legislative session. What would happen if the Medical Association was not on call, advocating for you and your patients at the legislature? Keep reading to find out.

Moving Medicine Forward

Continued success in the legislative arena takes constant vigilance. Click here to see our 2017 Legislative Agenda.

If no one was on call… Alabama wouldn’t be the 20th state to enact Direct Primary Care legislation. DPC puts patients and their doctors back in control of patients’ health and helps the uninsured, the underinsured and those with high-deductible health plans. SB 94 was sponsored by Sen. Arthur Orr (R-Decatur) and Rep. Nathaniel Ledbetter (R-Rainsville) and awaits the Governor’s signature.

If no one was on call… the Board of Medical Scholarship Awards could have seen its funding slashed but instead, the program retained its funding level of $1.4 million for 2018. The BMSA grants medical school loans to medical students and accepts as payment for the loan that student’s locating to a rural area to practice medicine. The BMSA is a critical tool for recruiting medical students to commit to practice in rural areas. As well, the economic footprint of every physician is at least $1 million, which improves both community health and local economies.

If no one was on call… Medicaid cuts could have been severe, possibly reducing access for patients within an already fragile system in which less than 20 percent of Alabama physicians participate. Due to work done during the 2016 second special session and the 2017 session, sufficient funds were made available for Medicaid without any scheduled cuts to physicians for 2018. Increasing Medicaid reimbursements to Medicare levels — a continuing priority of the Medical Association — could further increase access to care for Medicaid patients.

Beating Back the Lawsuit Industry

Personal injury lawyers are constantly seeking new opportunities to sue doctors. While Alabama’s medical liability laws have fostered fairness in the courtroom and improved the legal climate, each year personal injury attorneys seek to undo parts of the very law that helps keep “jackpot justice” and frivolous suits in check.

If no one was on call… an $80 million tax increase on physicians to fund a new government-administered malpractice claims payout system called the Patients Compensation System could have passed. The PCS would administer damage claims for physical injury and death of patients allegedly sustained at the hands of physicians. Complaints against individual physicians would begin with a call to a state-run 1-800 line and would go before panels composed of trial lawyers, citizens and physicians to determine an outcome. In addition, any determinations of fault would be reported to the National Practitioner Databank. The Patient Compensation System would undo decades of medical tort reforms which the Medical Association championed and is forced to defend from plaintiff lawyer attacks each session. The PCS deprives both patients and doctors of their legal rights.

If no one was on call… physicians could have been exposed to triple-damage lawsuits for honest Medicaid billing mistakes. The legislation would create new causes of civil action in state court for Medicaid “false claims.” The legislation would incentivize personal injury lawyers to seek out “whistleblowers” in medical clinics, hospitals and the like to pursue civil actions against physicians and others for alleged Medicaid fraud, with damages being tripled the actual loss to Medicaid. The standard in the bill would have allowed even honest billing mistakes to qualify as “Medicaid fraud,” creating new opportunities for lawsuits where honest mistakes could be penalized.

If no one was on call… physicians would have been held liable for the actions or inactions of midwives attending home births. While a lay midwife bill did pass this session establishing a State Board of Midwifery, the bill contains liability protections for physicians and also prohibitions on non-nurse midwives’ scope of practice, the types of pregnancies they may attend and a requirement for midwives to report outcomes.

If no one was on call… the right to trial by jury, including jury selection and jury size, could have been manipulated in personal injury lawyers’ favor.

If no one was on call… physicians could have been held legally responsible for others’ mistakes, including home caregivers, medical device manufacturers and for individuals following or failing to follow DNR orders.

Protecting Public Health and Access to Quality Care

Every session, various pieces of legislation aimed at improving the health of Alabamians are proposed. At the same time however, many bills are also introduced that endanger public health and safety, like those where the legislature attempts to set standards for medical care, which force physicians and their staffs to adhere to non-medically established criteria, wasting health care dollars, wasting patients’ and physicians’ time and exposing physicians to new liability concerns.

If no one was on call… legislation could have passed to lower biologic pharmaceutical standards in state law below those set by the FDA, withhold critical health information from patients and their doctors and significantly increase administrative burdens on physicians. ICYMI, read our joint letter to the Alabama Legislature opposing the bill.

If no one was on call… allergists and other physicians who compound medications within their offices could have been shut down, limiting access to critical care for patients.

If no one was on call… numerous scope of practice expansions that endanger public health could have become law, including removing all physician oversight of clinical nurse specialists; lay midwives seeking allowance of their attending home births without restriction or regulation; podiatrists seeking to amputate, do surgery and administer anesthesia up the distal third of the tibia; and marriage and family therapists seeking to be allowed to diagnose and treat mental disorders as well as removing the prohibition on their prescribing drugs.

If no one was on call… state boards and agencies with no authority over medicine could have been allowed to increase medical practice costs through additional licensing and reporting requirements.

If no one was on call… legislation dictating medical standards and guidelines for treatment of pregnant women, the elderly and terminal patients could have been placed into bills covering various topics.

Other Bills of Interest

Rural physician tax credits… legislation to increase rural physician tax credits and thereby increase access to care for rural Alabamians did not pass but will be reintroduced next session.

Infectious Disease Elimination… legislation to establish infectious disease elimination pilot programs to mitigate the spread of certain diseases failed to garner support on the last legislative day.

Constitutional amendment proclaiming the State of Alabama’s stance on the rights of unborn children… legislation passed to allow the people of Alabama to vote at the November 2018 General Election whether to add an amendment to the state constitution to:

“Declare and affirm that it is the public policy of this state to recognize and support the sanctity of unborn life and the rights of unborn children, most importantly the right to life in all manners and measures appropriate and lawful…”

If ratified by the people in November 2018, this Amendment could have implications for women’s health physicians.

Coverage of autism spectrum disorder therapies… legislation passed to require health plans to cover ASD therapies, with some restrictions.

Portable DNR for minors… legislation establishing a portable DNR for minors to allow minors with terminal diseases to attend school activities failed to garner enough votes to pass on the last legislative day.

If the Medical Association was not on call at the Alabama Legislature, countless bills expanding doctors’ liability, increasing physician taxes, and setting standards of care into law could have passed. At the same time, positive strides in public health — like passage of the direct primary care legislation — would not have occurred. The Medical Association is Alabama physicians’ greatest resource in advocating for the practice of medicine and the patients they serve.

Click here for a downloadable version of our 2017 Legislative Recap.

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What You Need to Know about the Business of Practicing Medicine

What You Need to Know about the Business of Practicing Medicine

While physicians today learn cutting-edge medical treatments and technologies, most of them don’t receive any instruction on the business side of medicine. That’s an unfortunate omission; practicing medicine requires doctors to enter contracts, to be aware of applicable rules, laws and regulations, to market themselves, to understand proper coding requirements, and to properly collect patient payments.

Today we will focus on one of the first business documents a physician will encounter: a contract with a physician practice. What subjects will it cover? What questions can you ask? Should you get a professional to look at the document?

Compensation is one item that will be addressed in the contract. Be sure you understand how your compensation is determined, whether you have the opportunity to earn a bonus, and exactly what a bonus will be based on. You may be offered a trial period to practice as a salaried physician (perhaps one to three years) before you can join the practice as a partner.

Don’t be afraid to ask questions. If you are required to work as a salaried physician for a time, how does the practice decide whether or not to offer you a partnership? What has happened to physicians who have come before you? Has anyone failed to make partner, and if so, what were the reasons?

If you are fortunate enough to be considering competing offers, don’t look at salaries in a vacuum. A quick online search will reveal the average income of a physician in your specialty in the city you are considering. Similarly, you can search and compare the cost of living in different cities. A slightly lower offer may go farther in a city with a much lower cost of living.

Do not forget to factor in benefits as well. A practice that pays for your CME, malpractice insurance, health and disability insurance, and makes generous contributions to your retirement account is relieving you from paying thousands of dollars per month.

OnBoard Healthcare is a partner of the Medical Association. Visit them online for more information.

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Injured? Dial 1-800-4-MED-MAL

Injured? Dial 1-800-4-MED-MAL

Legislation Threatens Decades of Medical Tort Reforms

If 1-800-4-MED-MAL sounds like a personal injury firm advertisement, think again. But if proponents of a radical new alternative medical liability system get their way, 1-800-4-MED-MAL could be an avenue for turning every persistent migraine, bout of acute pain and post-operative bruise into cash payments.

This radicalized approach – called the Patients’ Compensation System (PCS) – would abolish a physicians’ right to trial by jury and undo decades of tort reforms championed by the Medical Association, laws that foster a stable liability environment in Alabama and laws which must be defended from personal injury lawyer attacks each year. Proponents of the PCS want Alabama physicians to trade existing, proven protections from trial lawyer shenanigans for the false hope of an untested, unrealistic and radical approach to medical liability.

Let’s examine arguments by proponents of PCS legislation one by one.

Proponents Say PCS Will Be Good for Physicians

While supporters claim the PCS would free physicians from burdens of the civil justice system, the opposite is true. The Medical Association won numerous hard-fought battles with personal injury lawyers since the 1980s in order to bring stability to Alabama’s medical liability environment. Maintaining that stability can only be achieved through a vigilant defense at the Legislature.

If it became law, the PCS would levy an annual tax on physicians to fund a new state government agency to handle all claims of physical injury or death allegedly at the hands of M.D.s and D.O.s. The PCS would be mandatory, with no option for a jury trial. The PCS would have authority to investigate, determine fault and award damages. Instead of a plaintiff hiring an attorney to file suit, each claim under the PCS would be initiated by dialing a 24-hour hotline.

The PCS would not govern allegations filed against a hospital though, meaning a physician could still be party to a suit involving an institution even with the PCS in place. Unlike a professional liability policy, the costs for defense counsel would not be included in the annual payment to the PCS. The committees reviewing PCS claims would be largely political appointees, meaning a physician’s fate could hinge on who’s in office at the time a claim is made. If the PCS found wrongdoing by a physician and compensated a claimant, it would be reported to the National Practitioner Databank. With the bar for entry lowered to the level of a phone call, a “woodwork effect” as word spreads about the PCS is an almost certainty. With the subsequent spike in payouts, Alabama physicians could see reports for minor injuries to the National Practitioner Databank increase as exponentially as their taxes to fund the PCS.

Proponents Claim PCS Will Be Good for Patients

Those pushing the PCS say the current system doesn’t adequately compensate injured patients, and those compensated wait too long for justice. Few physicians who’ve been sued would argue the civil justice process is a short one, but that is indicative of long dockets that are the product of an overly-litigious culture.

The practice of medicine is just that; a practice, with few certainties. Most patient injuries are no one’s specific fault. In a minority of situations, the opposite is true and those injured should be able to seek recourse. But under the bureaucrat-run PCS, the number of claims paid for even minor injuries could increase sharply, quickly depleting the balance of available funds through thousands of small payouts, funds that should be reserved for the aforementioned minority of situations of serious physical injuries or death.

Once the funds from the PCS physician tax dries up each year, no further claims can be paid, even those already filed but not completed. Given that, instances of serious physical injury would fare better in the court system. The PCS proponents also promise a dramatic reduction in the length of time between injury and award. That’s difficult to believe as few if any government programs have actually improved efficiency for those utilizing them.

Proponents Say PCS Will Reduce “Defensive Medicine”

Promised as a way to reduce unnecessary care and thereby shrink Medicaid expenses by giving physicians liability comfort, PCS supporters cling to the flawed premise physicians base their medical decisions on criteria other than established standards and what’s best for the patient. Statements to the contrary are not only insulting to most physicians, they’re false, as anyone intentionally billing unnecessary services would be committing fraud. Whether under the civil justice system or the PCS, standards of care will still exist. And, because all awards for injury are reported to the National Practitioner Databank, the reporting of thousands of minor injury awards under the PCS might actually encourage additional testing and procedures, creating the opposite atmosphere PCS proponents claim their system will eliminate.

Proponents Say PCS Will Cut Health Care Costs, Especially in Medicaid

Also proposed as a cost savings for Alabama Medicaid via anticipated reduction of alleged unnecessary care, PCS supporters claim Alabama physicians order more than $1 billion worth of “defensive medicine” for fear of being sued. They claim the PCS, if implemented, could substantially slash the cost to Medicaid alone by hundreds of millions of dollars. As explained above, the myth of “defensive medicine” doesn’t hold up. How could a radical new system that pays out substantially more claims for injuries contain even its own expenditures, much less curb the growth in health care costs? The PCS will create a “woodwork effect” expected to increase the cost each year, leaving physicians burdened with higher taxes to fund the unrestrained and irresponsible growth.Conclusion


The PCS is an expansion of big government-funded on physicians’ backs that will undo decades of significant tort reforms. With uncertainty already surrounding the future of the state’s Medicaid program, destroying Alabama’s medical liability environment could push physicians into early retirement or send them to states with more stable liability atmospheres. The PCS legislation and its empty promises should be cast aside in favor of meaningful civil justice reforms that solve problems instead of creating them. The PCS is indeed an answer in search of a question, and one that’s bad for patients, bad for physicians and wrong for Alabama.

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