As these things go, we lawyers know that the best way to get to the bottom of things is to “follow the money” and that’s what this post is all about.

And of course, what I’m talking about is the very recent creation of a “grass roots” effort to change the the laws of medical malpractice in North Carolina. That “grass roots” organization stealthily sprung to life on March 10, 2011, as a non-profit organization called “North Carolinians for Affordable Health Care, Inc.”

What follows is the story of the “birth of an astro-turf” organization. And if you are not familiar with that term, let me give you my definition. We’ve all heard of “grass roots” organizations, right? They start out with regular people who have a concern about something. Those people organize and get the word out and suddenly they create a movement which gains momentum. And when that movement gets big enough, these regular people get a “voice” on the public stage with the politicians and large corporations that can simply “buy” access to government with lobbyists. Well, “astro-turf” is the opposite of that. An “astro-turf” organization is something created by a corporation or a lobbyist to appear to be “of the people” when it is, in fact, just a shill by “the man”- some corporate interest that wants to pose as “the people.”

As you read this rather lengthy post, you’ll get to see how a small group of politically connected lawyers created an “astro-turf” organization to persuade politicians and the public to take away the rights or regular people to bring a claim against an insurance company and hospital when that hospital makes a mistake that injures, maims, or kills someone they love.

3/10/2011 Articles of incorporation for North Carolinians for Affordable Health Care (NCFAHC) is filed.

It is, of course, a Section 501(c)(4) Corporation.

The name and address of the incorporator is R. Donavon Munford, Jr.,

P. O. Box 2611, Raleigh, NC 27602-2611.

Reference: NC Secretary of State Filings

North Carolinians for Affordable Health Care is incorporated by a Republican former member of the NC General Assembly who is a partner in the Smith Anderson Law Firm

R. Donovan “Don” Munford was a Republican member of the North Carolina General Assembly representing the state’s thirty-fourth House district, including constituents in Wake County from 2002. Munford is a lawyer and accountant from Raleigh, North Carolina.

Munford ran for re-election to the North Carolina House of Representatives in the 2004 General Assembly election. He defeated J.H. Ross in the Republican primary, but lost to Democrat Grier Martin in the November 2004 general election.

 He is a partner at Smith Anderson, the largest law firm in the Raleigh area. He practices in the areas of corporate and business law, estate planning and asset protection planning. Munford is also a licensed Certified Public Accountant. (Reference: Munford Wikipedia Entry)

Smith Anderson Law Firm is a leading Medical Malpractice Insurance Defense law firm and also a government lobbying law firm.

Smith Anderson Law Firm registered the website for NCFAHC.

Reference: WhoIS Registration link

Smith Anderson Law Firm has a longstanding relationship with the North Carolina Medical Society and lobbies for them before the General Assembly.

The North Carolina Medical Society is lobbying for immunity from negligence for Emergency Rooms in NC.

3/16/2011 NCFAHC releases a commercial falsely alleging that North Carolina is experiencing “frivolous lawsuits” which increase taxes and insurance costs.

Follow the Money

Are “North Carolinians” demanding immunity for negligent Emergency Rooms and physicians, or is a small group of lawyers, lobbyists, and physicians looking to walk away from their responsibility to the injured, maimed, and killed?

Can anyone explain how making Emergency Rooms immune from claims or lawsuits for “negligence” furthers the Medical Society’s stated purpose to”raise the standards for their profession” and “protect the quality of patient care?”

North Carolina Senate Bill 33 (SB33) does exactly the opposite. SB 33 changes the rules for any medical person in the Emergency Room and eliminates responsibility for “negligence”. This does not “raise the standard” for the profession, but in fact drastically lowers the standard. 

So how does this “protect the quality of patient care?” Well, what happens when you say “you can no longer be held financially accountable for the consequences of sloppy work, negligent work, or breaking and ignoring the established rules in all other Emergency Rooms in the state of North Carolina?”

Does taking accountability away from Doctors, Nurses and Hospitals somehow make people more responsible? Or does it make them act “less responsible?”

How about this? What would happen if we eliminated all speed limits in North Carolina, and just told people not to drive “grossly fast”? Would our roads be safer, or less safe?

Bottom line, the NC Medical Society, through their lawyers and lobbyists are “posing” as you, the people, in an effort to take away your right to hold a small group of bad doctors accountable.

And of course, where do the ACTUAL people stand on this issue?

Please write your elected House member a note and tell them to oppose this Bill.

Here is how to look them up: Who Represents Me?

(Scroll down to the bottom and look up by your Zip code)

This proposed Senate Bill S33 is a laundry list of of ways to limit the rights of normal citizens in NC. While physicians may THINK this proposed Bill will help them, in reality, the bill is a giant GIFT to the insurance industry because it simply reduces the amounts of money insurance companies might have to pay in legitimate claims. Or put another way, it limits the recovery of individuals whom a jury have determined are truly injured by medical negligence.

Here is a quick rundown on the Bill and my comments on the reality of the provisions.

EMERGENCY MEDICAL CARE- If your emergency room doctor commits negligence, you can’t sue them. You can only sue if they are GROSSLY negligent, like, if they were drunk. So, when the ER doc gives your spouse an injection of penicillin, even though her medical chart says she is severely allergic to it, and she dies- too bad. Gross negligence is a very high standard in North Carolina.

BIFURCATION OF TRIALS ON ISSUES OF LIABILITY AND DAMAGES in any case over $75,000.

This means that in any case with a value of over $75,000 (which is almost every medical malpractice case out there) you essentially have two trials. The first part is on the question of negligence. Did the doctor make a mistake. The second part is on the damages. Sounds tempting and simple but the real reason behind this is two fold. First, it makes trials longer and more costly for the injured party. Many witnesses who could testify once, now have to testify twice. Experts are very expensive, sometimes $5,000 per day. Insurance Companies have nearly unlimited resources to bring in experts. Injured people do not. Second, by keeping out the damages, the jury does not have any idea how badly the mistake has affected the injured person. This “depersonalizes” the case which is an advantage to the Defendant.

LIMITING THE AMOUNT OF NONECONOMIC DAMAGES THAT MAY BE AWARDED ($250,000 cap on damages) As used in this section, ‘noneconomic damages’ means damages to compensate for pain, suffering, emotional distress, loss of consortium, inconvenience, physical impairment, disfigurement, and any other nonpecuniary, compensatory damage. So if your child is burned on 90% of their body in a negligent surgical fire, they get about $3,000 a year for life. And of course, this cap on damages ONLY affects people who have a legitimate case, i.e., some one whom a jury has just determined is injured as a result of negligence. This cap also disproportionately effects retired people who do not have future lost earnings. And of course, this means insurance companies can get off cheap, even if a jury thinks a higher amount is warranted.

BY AUTHORIZING THE PERIODIC PAYMENT OF FUTURE ECONOMIC DAMAGES IN LIEU OF A LUMP-SUM PAYMENT. Basically, this is in there because if the person who is awarded damages by a jury dies later, their family will not inherit the money. It will go back to the insurance company.

MODIFYING APPEAL BONDS IN MEDICAL MALPRACTICE ACTIONS. This just makes it cheaper for insurance companies to appeal when they lose.

If approved, this act becomes effective October 1, 2011. (Better go to the doctor now.)

When “tort reform” was being debated on the Federal level, I produced a mock “Do It Yourself Tort Reform Release” which tried to demonstrate the reality of what the law makers were proposing. It got picked up by some national press and “went viral,” in as much as something about the law goes viral.

So, if you just can’t wait for Medical Malpractice “tort reform”, just download this handy form, sign it, and take it to your next doctor’s appointment.

The main insurer for physicians, NC Medical Mutual, has just announced that they MADE so much money last year, they are issuing a refund to doctors. And guess what? This is NOT a result of tort reform. We have had no major laws pass in our state which resulted in “savings.”

In fact, based upon actuarial studies, the reality appears to be that when lobbyists for the insurance companies were screaming for tort reform, what they were doing behind the scenes was RAISING premiums for physicains to create what I would call a “manufactured problem.” The doctors’ own insurance company was gouging them, and then asking them to donate money to “tort reform” causes, which of course, are insurance company lobby groups.

Looks like the physicians have finally reigned in their own insurance company by realizing that the “crisis”, if there is one, is mostly in the minds (and wallets) of the insurance industry.

from the News and Observer

N.C. insurer to pay dividend

Medical Mutual will also pay off debt as drop in malpractice suits boosts profit

David Ranii, Staff Writer

The state’s largest medical malpractice insurer says that fewer lawsuits filed against doctors will allow it to pay its policyholders a $3 million dividend — its first dividend ever.

Raleigh-based Medical Mutual Insurance Co. of North Carolina said it posted a 7.4 percent increase in profit last year as the number of lawsuits filed against its policyholders fell to 298 last year. That’s down from 326 in 2006.

In addition to paying the first dividend since the company was founded in 1975, Medical Mutual also plans to erase its $10 million in debt this year. And, over the next four years, it plans to refund $12 million in capital supplied by its policyholders in 2003 as part of a plan to shore up the company’s finances and stabilize its premium rates.

In recent years the N.C. Academy of Trial Lawyers, whose members include the personal-injury attorneys who sue doctors for malpractice, has bashed Medical Mutual for charging rates that the lawyers’ group labeled excessive.

Medical Mutual’s CEO Dale Jenkins said the dividend and capital refund to shareholders demonstrates “we are a very good steward of the resources the [doctors] have provided to us. We recognize every day that it is their money.”

Medical Mutual hasn’t sought a rate increase from state regulators since 2005. The latest positive financial results will allow the insurer to hold rates steady again this year.

Medical Mutual’s dividend will be in the form of a credit that physicians receive when they renew their policies, said Jenkins. The average credit will be about 5 percent of the annual premium for most of the 6,300 North Carolina physicians who are policyholders. Medical Mutual is a mutual insurance company that is owned by its policyholders.

“We’re always glad to see a company … able to give money back to its shareholders,” said N.C. Insurance Department spokeswoman Chrissy Pearson.

Jenkins said the number of medical malpractice lawsuits has fallen nationwide. In addition, Medical Mutual has taken steps aimed at limiting lawsuits. The company has established stringent underwriting guidelines in order to avoid insuring doctors it considers high-risk, Jenkins said. “We do not take all comers,” he said.

The company also sends out teams of nurses to assess doctors’ practices and recommend ways to minimize risks, he said.

Profit last year totaled $26.1 million, up from $24.3 million in 2006, Medical Mutual reported. Assets increased by $44.9 million, to $416.2 million.

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Chris Nichols
www.NicholsTrialLaw.com