Consumer Law & Policy Blog

Recent study finds a significant downward effect from state-law medical-malpractice caps on claim rates and payouts

A recent study by Myungho Paik, Bernard Black, and David Hyman finds a significant downward effect from state-law medical-malpractice caps on claim rates and payouts. Here is the abstract:

We study the effect of damage caps adopted in the 1990s and 2000s on medical malpractice claim rates and payouts. Prior studies found some evidence that caps reduce payout per claim, but mixed and weak evidence on whether caps reduce paid claim rates and payout per physician. However, most prior studies do not allow for the gradual phase‐in of damage caps, which usually apply only to lawsuits filed after the reform's effective date, or only to injuries after the effective date. Once we allow for phase‐in, we find strong evidence that damage caps reduce both claim rates and payout per claim, with a large combined impact on payout per physician. The drop in claim rates is concentrated in claims with larger payouts - the ones that we expect to be most affected by a damages cap. Stricter caps have larger effects. Some prior studies also find a large impact of tort reforms other than damage caps. Once we allow for phase‐in, we find that these other reforms have no significant impact on either claim rates or payout per claim.

Videos Educate Consumers Being Sued for Debt Collection

by Jeff Sovern

Here.  The New Media Advocacy Project (N-Map) and Fordham Law School’s Feerick Center for Social Justice in conjunction with MFY Legal Services, Inc., and Pro Bono Net, along with other organizations, have created a series of short, animated videos to help consumers being sued in debt collection cases.  I watched a couple of them and they are quite well done.  Consumers go to the web site and answer a series of questions (called a survey on the web site) about whether they have heard from a debt collector, are being sued, have had a judgment entered against them, etc. On the basis of their answers, the web site then identifies which videos to show them.  It is easy to imagine that consumers who don't know what to do when they are being sued by debt collectors will find these useful.  It will be interesting to see the extent to which consumers use them. While the videos are directed to New York consumers, they would probably be valuable to non-New York consumers and in any event seem worth emulating elsewhere.  (HT: Carolyn E. Coffey)

Update from fracking country: Pa. audit finds lax environmental oversight

A report issued today by Pennsylvania's auditor general revealed the troubling (if not necessarily surprising) degree to which that state's Department of Environmental Protection has been outmatched by the pace of gas drilling in the state. The report, covering the period 2009-12, portrays a department that is both underresourced and slow or even unwilling to take enforcement action in response to pollution. In the words of the auditor general, “It is almost like firefighters trying to put out a five-alarm fire with a 20-foot garden hose. There is no question that DEP needs help and soon to protect clean water.”

Read the auditor general's press release and find a link to the report here (scroll to the bottom for a link to the report).

(BREAKING) Fourth Circuit upholds health-care subsidies for federally-run exchanges

Just hours after a panel the D.C. Circuit held (over a dissent) that the ACA could be read just one way -- to forbid health-care premium subsidies in health-care exchanges run by the federal government rather than a state -- a panel of the Fourth Circuit (which covers the states of Maryland, Virginia, West Virginia, North Carolina and South Carolina) went the other way. That court held that the ACA was ambiguous regarding subsidies for individuals participating in federally-run exchanges, and that the IRS's interpretation permitting subsidies for such individuals was reasonable and therefore entitled to deference from the courts.

Here's the Post story on the division of opinion and its implications. In short: the government insists nothing will change in the short term, partisans on both sides reacted in the ways one might expect based on their support for the underlying law, and the question seems quite likely to be litigated further in en banc proceedings and/or the Supreme Court.

(BREAKING) D.C. Circuit limits reach of health-care subsidies

In a 2-1 decision, a panel of the U.S. Court of Appeals for the D.C. Circuit has struck down an IRS rule providing subsidies for participants in health-care exchanges in states where the exchanges were established by the federal government, not the states. In other words, according to the court, although Congress intended that the federal government would establish health-care exchanges where states do not do so, government subsidies to help individuals buy health care would only be available where the states themselves set up the exchanges (which, as the majority notes, is the case in just 14 states plus D.C.).

From the majority:

Because we conclude that the ACA
unambiguously restricts the section 36B subsidy to insurance
purchased on Exchanges “established by the State,” we
reverse the district court and vacate the IRS’s regulation.
...
At least until states that wish to can set up Exchanges, our ruling
will likely have significant consequences both for the millions
of individuals receiving tax credits through federal Exchanges
and for health insurance markets more broadly. But, high as
those stakes are, the principle of legislative supremacy that
guides us is higher still. Within constitutional limits, Congress
is supreme in matters of policy, and the consequence of that
supremacy is that our duty when interpreting a statute is to
ascertain the meaning of the words of the statute duly enacted
through the formal legislative process.

From the dissent:

Appellants’ proffered construction of the statute would
permit States to exempt many people from the individual 
mandate and thereby thwart a central element of the ACA. . . .
It is inconceivable that Congress intended to
give States the power to cause the ACA to “crumble.”

Here is the Washington Post's initial report. With either en banc or Supreme Court review (or both) possible, I suspect this isn't the last word on the matter.

CFPB at 3

The National Law Journal has an analysis of the Consumer Financial Protection Bureau as it hits the three-year mark. Among the highlights:

Agency lawyers filed at least 20 enforcement actions in the past year (compared with two in the CFPB’s first year), racking up a series of major settlements. Among them: Bank of America in April agreed to pay consumers $727 million for deceptively marketing credit card add-on services, and Chase Bank USA, N.A. and JPMorgan Chase Bank settled similar charges in September for $309 million. Working with other federal and state regulators, the CFPB in June compelled SunTrust Mortgage Inc. to pay $540 million in relief to homeowners for servicing wrongs.

In all, the CFPB in its first three years has helped refund more than $3.8 billion to consumers, [director Richard] Cordray told the Senate Committee on Banking, Housing and Urban Affairs last month.

Read the full article here.

A state-by-state guide to the economic recovery

As NPR reports this month, the U.S. economy has finally recovered the number of jobs it had as of January 2008. But they didn't all go back to the places where they were lost.

Check out this fascinating graph (and accompanying story) to learn which states rebounded, which didn't, and why.

Whirlpool to Congress: protect us from class actions for misleading consumers

Manufacturers of home appliances (like Whirlpool) have been sued for misusing the EPA's "Energy Star" label to suggest that products were more energy efficient than they actually were.

The industry response has been to try to get Congress to ban such suits. This quote from Shannon Baker-Branstetter of Consumers Union (the publisher of Consumer Reports) encapsulates the problem with this reponse:

“E.P.A. and D.O.E. [the Department of Energy] can’t be out there all the time,” she said. “Consumers need that backstop of the courts to get redress.” Class-action suits, she said, are appropriate in cases where “it’s lots of small injuries,” like an appliance that will use a few extra dollars’ worth of electricity every year.

The New York Times has more.

 

CFPB begins taking consumer complaints on prepaid cards and other nonbank products

The Consumer Financial Protection Bureau has been taking consumer complaints on a wide range of topics for some time now, including mortgage lending, credit reporting, private students, and (more recently) debt collection. The agency announced today that it is now taking complaints concerning prepaid cards and other nonbank products. Here is the agency's press release:

WASHINGTON, D.C. — The Consumer Financial Protection Bureau (CFPB) is now accepting complaints from consumers encountering problems with prepaid cards, such as gift cards, benefit cards, and general purpose reloadable cards. Consumers can also now submit complaints about additional nonbank products, including debt settlement services, credit repair services, and pawn and title loans.

 

“Today we are taking another important step to expand the Bureau's handling of consumer complaints,” said CFPB Director Richard Cordray. “By accepting consumer complaints about prepaid products and certain other services we will be giving people a greater voice in these markets and a place to turn to when they encounter problems.”

 

The Bureau started taking complaints about credit cards when it opened its doors in July 2011. In addition to taking complaints regarding today’s new products, the CFPB also handles complaints about mortgages, bank accounts and services, private student loans, auto and other consumer loans, credit reporting, debt collection, payday loans, and money transfers. The Bureau requests that companies respond to complaints within 15 days and describe the steps they have taken or plan to take. The CFPB expects companies to close all but the most complicated complaints within 60 days. Consumers are given a tracking number after submitting a complaint and can check the status of their complaint by logging on to the CFPB website.

More evidence of plummeting rates of uninsured under the Affordable Care Act

We have been providing reports (go, for instance, here) of evidence that the number of Americans lacking health insurance has been dropping as the Affordable Care Act goes into effect. Here is the latest:

State insurance officials [in Washington state] say fewer than 9 percent of Washington residents still don't have health insurance. That's a significant improvement from numbers before the Affordable Care Act went into effect. The state Office of the Insurance Commissioner counted 970,000 uninsured Washington residents last year. That number is now 600,000 or about 8.65 percent of the state population.

Read more here: http://www.theolympian.com/2014/07/17/3230395/washington-uninsured-rate-drops.html?sp=/99/101/130/&ihp=0#storylink=cpy