Tort reform, a topic at the intersection of legal systems, healthcare, and economic policy, has profound implications for personal injury victims, healthcare providers, insurers, and taxpayers. Through the lens of Florida HB837 and similar legislative enactments and insights from Gary Amos, CEO of Golden Pear, we delve into the complex dynamics of tort reform and its ripple effects across various sectors.
Legislative enactments such as HB837 limit plaintiffs' access to necessary medical treatment for injuries arising from personal injury incidents. This limitation stems from its impact on medical providers by curtailing their flexibility and ability to bill for services rendered at rates they deem acceptable and customary. This has a twofold effect.
Medical providers' inability to offer services for injuries suffered by plaintiffs causes a shift, directly and indirectly affecting taxpayers. If tortfeasors and their property and casualty insurers are not required to pay a reasonable rate for providers’ treatment due to legislation like HB837 reducing providers’ reimbursement rates, the healthcare sector will be placed under high financial stress. As private medical providers are forced out of the marketplace, affected individuals will be forced to rely on public hospital systems and public programs like Medicaid, all at the expense of the taxpayer.
Plaintiffs who don't have access to medical treatment or limited access due to lack of insurance or alternative means vis-a-vis Letters of Protections (LOP) could burden taxpayers. Patients with injuries worsening over time due to limited treatment could end up relying on the public health system. Government assistance programs and or reliance on long-term disability all have implications for the taxpayers. Without the proper access to treatment supported by a “cash pay” model, LOP's plaintiffs could find themselves struggling to obtain the necessary treatment they deserve.
Historically, insurance companies covered a wide range of services and compensated providers generously. However, as healthcare costs rise and medical advancements continue, even those with commercial insurance policies face increasing out-of-pocket expenses, further complicating the landscape for all involved.
When an attorney is required to present evidence of a plaintiff's damages to either a jury or the defendant's insurer in settlement negotiations, quantifying the full extent of injuries suffered and the treatment required is a critical factor in determining an individual's physical and mental suffering which is the key component in determining compensable damages.
If the treatment victims receive for their injuries is less than what is required due to lack of financial ability and provider access, it raises the questions: Is the full extent of a victim’s injuries and damages accurately represented? Whether it's an arbitrator, a judge, or a jury evaluating the case, can they truly grasp the severity of the injuries if the appropriate treatment hasn't been administered for any reason?
Specialty finance, medical receivables, and funding companies can work with healthcare providers to bridge coverage gaps for uninsured and underinsured individuals. There are opportunities for medical providers and funding companies to negotiate rates for services rendered, often where payments are made to the provider in advance of services rendered.
It's important to acknowledge that the private healthcare community operates as a business to support the livelihoods of provider participants and their families, with a responsibility to earn a profit. Assurance of payment for services rendered at a fixed and negotiated rate, either at the time of or sometimes before service delivery to the plaintiff by the funding company, creates a mutually beneficial scenario. This arrangement can bridge the gap created by the natural lag in the insurance system, where insurance companies and providers negotiate rates that may not always cover the needed services. There is always the possibility of an insurance company denying a claim, either in advance or after submission, often preemptively.
This strategy effectively addresses the void of uncovered procedures or those requiring immediate attention through cash payments. From the perspective of a healthcare provider's profit and loss statement, they have what is known as a "payor mix," which describes the sources of their revenue - whether from Medicare, Medicaid, commercial insurance, or cash payments. This third category, cash, includes funds from letters of protection and medical receivables, which are services provided by funding companies. Without such arrangements, healthcare providers often face significant potential write-offs and losses due to a lack of payments.
Our extensive history in consumer litigation funding has endowed us with profound domain knowledge, particularly in assisting personal injury victims. Through this experience, we have gained a comprehensive understanding of liability, damages, and insurance—core components crucial to the intersection of injuries and insurance. This expertise in consumer litigation finance allows us to offer financial assistance where the victim’s needs are greatest.
Over the past four to five years, we have significantly enriched our institutional knowledge by recruiting medical doctors, attorneys with relevant expertise, and a sales team with healthcare expertise familiar with the sector. This strategic hiring has enabled us to effectively assist injury victims with medical provider access and key points of service, facilitating access to a wide network of high-quality medical providers across various geographic regions.
Now, we possess a comprehensive understanding of the plaintiff's journey, encompassing their medical and legal needs. We stand out as one of the few organizations that fully grasp how to support the injured victim plaintiff in both their consumer litigation funding needs and medical treatment access journey with their medical providers. This represents a significant differentiation and highlights how our institutional knowledge benefits all parties involved, offering a holistic 360-degree view of the plaintiff.
Releasing “trapped liquidity” for medical providers enables them to invest in their practice and, at times, even acquire new technology to support their patients' health journey. Our goal is to enhance liquidity, thereby reducing the associated overall burden and costs, which could lead to acquiring the proper equipment and modern technology for best-in-class patient treatment. This is especially pertinent when the receivable owed is tied to a personal injury victim, and the ability to monetize the billed services may not be immediately recoverable.
Furthermore, providers can significantly benefit by addressing the “trapped cash” issue and removing personal injury invoices from the confines of their accounts receivable. In the ever-changing landscape of healthcare and the various complexities of navigating the system, our goal at Golden Pear is to provide a symbiotic approach that allows the providers, personal injury victims, and their attorneys the ability to manage a treatment plan without the burden of financial costs to all parties involved until the case settles. We can bridge that financial gap for everyone so that they can focus on treatment. We do this by working closely with the providers to ensure timely payment through our financial offerings and support through the patient's health journey.
The intricacies of tort reform, its impact on society, and the role of organizations like Golden Pear in mitigating its negative consequences call for a balanced approach. By supporting initiatives that offer comprehensive solutions and advocating for policy changes, we can work towards a system that fairly distributes the costs associated with accidents and injuries caused by tortfeasors, ensuring access to justice and healthcare for all.
We encourage readers to engage in the conversation about tort reform and its broader societal implications. Support organizations like Golden Pear that make a difference and advocate for reforms that promote a more equitable and just system for handling personal injury cases and healthcare costs.