The History and Changing Role of HCADRO
Published .
Maryland created the Health Claims Arbitration Office during the malpractice-insurance crisis of the 1970s. The agency was designed to do more than receive paperwork: its original purpose was to have a balanced panel assess liability and damages before a malpractice case proceeded to court. Later amendments made that arbitration avoidable at the election of one party, leaving the agency with a substantial screening and case-processing role but a much weaker power to decide claims.
The malpractice crisis of the 1970s
In 1975, St. Paul Fire & Marine, then Maryland’s largest malpractice insurer, announced that it intended to leave the State’s market after receiving a substantial rate increase. The State Insurance Commissioner tried to prevent the withdrawal, but the Court of Appeals held that the Commissioner could not compel the insurer to remain. The General Assembly responded with a series of measures, including creation of the Medical Mutual Liability Society, changes to the limitations period, and legislation addressing physician peer review. It also appointed a study committee to examine how malpractice claims should be handled.
The General Assembly’s design for the agency
The Medical Malpractice Study Committee recommended mandatory arbitration. It expected an expert, mixed panel to screen out claims with weak evidence, encourage settlement when a panel found liability, and produce more accurate and predictable decisions than jury trials. The General Assembly adopted the proposal in 1976 as the Health Claims Arbitration Act and created the Health Claims Arbitration Office.
The original process required covered claims to be filed with the Office and referred to a three-member panel: an attorney, a health care provider, and a public member. The panel decided liability and, if appropriate, damages. Arbitration was not binding in the sense that a party could reject the award and seek a court trial. But the award could be admitted at trial and was presumed correct, placing the burden on the party challenging it. That presumption was intended to give the arbitration decision real weight and to encourage cases to end at the agency stage.
The 1995 turning point
In 1995, the General Assembly changed the system by allowing either the claimant or a defendant to waive arbitration unilaterally after the claimant filed the required qualified-expert certificate, subject to statutory timing rules. Before that change, arbitration could be bypassed before a hearing only by mutual agreement. The Court of Appeals described the amendment as permitting either party, at its discretion, to waive the entire arbitration system.
This is the central step in what may be called the “deneutering” of the Office’s adjudicatory role. If one side can elect court after the required expert filing, the other side cannot insist on having the panel decide the case. The original model’s most consequential feature—an expert merits decision carrying a presumption of correctness—became optional in practice, even though the initial claim-filing and certification requirements remained.
Later changes and the Office’s present role
Beginning in 1999, the law also allowed a court to refer a case to the Office for neutral case evaluation if the parties agreed. During that evaluation, the court retained jurisdiction. In the 2004 special-session health-care reform, an earlier version of the bill proposed terminating some Office functions and transferring them elsewhere. Those provisions were struck from the bill before enactment. The final law retained the Office, renamed it the Health Care Alternative Dispute Resolution Office, and provided for voluntary neutral case evaluation.
Today, the statute still requires covered health-care malpractice claims to pass through the statutory process, and the Office continues to receive and serve claims, administer expert-certificate requirements, organize the arbitration process when arbitration is not waived, and provide neutral case evaluation when the parties and court use it. The precise description is therefore not that HCADRO was abolished. Its compulsory gateway function survives; its original role as the forum that could require a merits decision has been substantially weakened by unilateral waiver.
Related Maryland Cases and Authorities
St. Paul Fire & Marine Insurance Co. v. Insurance Commissioner, 275 Md. 130, 309 A.2d 291 (1975); Attorney General v. Johnson, 282 Md. 274, 385 A.2d 57 (1978); Carrion v. Linzey, 342 Md. 266, 675 A.2d 527 (1996); Md. Code, Cts. & Jud. Proc. §§ 3-2A-01 through 3-2A-10; 1975 Md. Laws chs. 423, 544, 545; 1976 Md. Laws ch. 235; 1995 Md. Laws ch. 582; 1999 Md. Laws ch. 458; 2004 Md. Laws, Special Session, ch. 5.