Cleveland Clinic Health System Obligated Group - FMSbonds.com

manifest injustice would otherwise result. The caps include a practitioner’s professional corporation, employees,and others.Special limits apply in emergency cases for acts or omissions that occur before the patient is stabilized andcapable of receiving non-emergency care. Finally, there are rules defining how these caps should be reduced bysettlements.In addition to the damage caps, Florida’s 2003 tort reform act included tightening of rules governing thequalification of experts, granting prospective defendants broader discovery rights than before during pre-litigationinvestigation; and adding a new duty for doctors and hospitals to notify patients of adverse incidents that result inserious harm.An additional aspect of tort reform in Florida occurred at the ballot box in November 2004, when threeconstitutional amendments were adopted by ballot initiative. Amendment 3 has as its objective the limitation ofcontingent fees received by plaintiff’s attorneys in medical malpractice cases. Amendment 7 gives patients “a rightto have access to any records made or received in the course of business by a health care facility or provider relatingto any adverse medical incident.” The intent of the amendment is to allow access to records relating to adversemedical incidents involving others, not just the patient’s own, records. The legislature passed a bill limiting theeffect of Amendment 7 to final reports created on or after November 2, 2004, preserving the attorney and peerreview privileges, and limiting requests to cases of conditions or treatment similar to the patient’s. A case is nowbefore the Florida Supreme Court that will clarify the constitutionality of the legislation. Finally, Amendment 8provides a means of revoking the license of doctors with three adverse judgments, administrative determinations, orarbitration awards. Settlements do not count against this limit.The most recent legislative development occurred when Florida abolished joint and several liability thisyear for causes of action accruing on or after April 26, 2008. It previously had a modified form of joint and severalliability based on a sliding scale. In cases under the old rule in which plaintiff is not at fault (which includes mostmalpractice cases), a defendant with less than 10 percent fault is severally liable for his share of economic damagesonly, a defendant with 10 to 24 percent fault is jointly liable for the first $500,000 in economic damages only, onewith 25 to 50 percent fault is jointly liable for the first $1 million only, and no defendant is jointly liable for morethan $2 million in economic damages.Accordingly, the ability of the Obligated Issuers to insure or otherwise protect themselves againstmalpractice claims remains in question and the cost of such protection will likely continue to rise, which mayadversely affect the financial condition and results of operations of the Obligated Issuers.Many hospitals and health care providers are having difficulty renewing or obtaining commercialinsurance, including insurance against malpractice and general liability claims, at reasonable cost. The insurers areproviding lower amounts of coverage, requiring greater deductibles and charging larger premiums. Policies issuedmay not be renewed or renewable. While the Cleveland Clinic management considers its insurance coverage to beadequate, no assurance can be given that such coverage will be available for purchase in the same amounts and onthe same terms in the future, and that such availability will not have a material adverse effect on the futureoperations or financial condition of the Obligated Issuers.AntitrustEnforcement of the antitrust laws against health care providers is becoming more common, and antitrustliability may arise in a wide variety of circumstances, including medical staff privilege disputes, third-partycontracting, physician relations, and joint venture, merger, affiliation and acquisition activities. In some respects,the application of the federal and state antitrust laws to health care is still evolving, and enforcement activity byfederal and state agencies appears to be increasing. In particular, the Federal Trade Commission has publiclyacknowledged increasing enforcement action in the area of physician joint contracting. Likewise, increasedenforcement action exists relating to a retrospective review of completed hospital mergers. Violation of the antitrustlaws could subject a hospital to criminal and civil enforcement by federal and state agencies, as well as trebledamage liability by private litigants. At various times, an Obligated Issuer may be subject to an investigation by agovernmental agency charged with the enforcement of the antitrust laws, or may be subject to administrative or43