By the authority vested in me, pursuant to part II, Article 44 of the New Hampshire Constitution, on June 20, 2012, I vetoed SB 406, an act establishing an early offer alternative in medical injury claims.
SB 406 would be the first statutory early offer program in the nation. This legislation establishes a voluntary program to allow medical patients to waive their rights to certain remedies for a medical injury and obtain a payment from the provider for their economic damages (medical expenses and lost wages) plus an additional payment based on the level of harm. Injured patients who accept an early offer waive their right to a judicial determination of their damages and do not receive any compensation for lost earning capacity, loss of enjoyment of life, loss of consortium, physical impairment, and pain and suffering among other damages.
SB 406 was the subject of substantial effort by its sponsors and by committee members in the House and the Senate. It is intended to provide an alternative to the current system for resolving medical malpractice claims, and I support efforts to improve our tort system. While this legislation is well intentioned, I do not believe that it sufficiently and fairly balances the interests of the general public with the interests of medical providers in expeditiously resolving medical injury claims. SB 406, as presented to me, lacks certain fundamental safeguards that are necessary to protect injured patients. For that reason, I have decided to veto SB 406.
In order to participate in the early offer program, an injured patient must sign a waiver of their rights and submit a notice of injury to the medical provider. When those documents are submitted, the medical provider must then provide a "neutral advisor" to an injured patient who is unrepresented. The neutral advisor is an attorney or retired judge, who is required to offer assistance to the patient and encourage him or her to retain a private attorney.
After the first meeting with the neutral advisor, the patient then has only 5 business days to decide whether or not proceed with the early offer process, or to withdraw the waiver of rights and notice of injury in order to preserve all of their rights to a judicial determination. That is too short a period of time for an unrepresented patient to adequately consult with the advisor concerning his or her rights and merits of their case. It is particularly insufficient for patients who then choose to identify, hire and consult with a different private attorney. The medical provider is afforded at least 90 days to evaluate a patient's request for an early offer. Patients deserve more than five business days to obtain legal advice and decide to waive important rights.
SB 406 also contains a so-called "loser pays" provision. Under the bill, an injured patient who receives an early offer may reject that offer and seek damages in court. In that event, the injured patient must first submit his or her case to the medical screening panel established under RSA 519-B. SB 406 does not make any changes to current law for those injured patients who wish to adjudicate their medical injury claims in court, and the screening panel remains a prerequisite to a judicial determination of damages for medical injuries in New Hampshire. When an injured patient who has rejected an early offer goes to court, he or she will be responsible to pay the medical provider's legal fees incurred in the early offer process unless the court awards the patient at least 125% of the early offer amount.
That standard is inappropriate for medical malpractice cases. For example, an injured patient submitted a claim for $175,000 in economic damages. The medical provider disagrees on the costs of treatment and offers $140,000. If a jury eventually agrees with the patient but awards only $172,000 because there was a double billing error, the patient has won the case, but will still have to pay the medical providers legal fees because the award was less than 125% of the early offer. That is not the right result.
In addition, before the case proceeds in court, the injured patient who has rejected an early offer must post "a bond or other suitable security for payment of the medical provider's reasonable attorney's fees and costs before the case can proceed." This requirement for the posting of a bond or other security could have a chilling effect on a patient's ability to challenge an early offer he or she considered unfair.
I believe that the legislature's efforts to fashion a balanced, reasonable early offer program should continue. It needs more work in order to adequately protect the interests of injured patients.
For all of these reasons, I am vetoing SB 406.