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AMA, 90 Medical Organizations Oppose Tax Changes That Encourage More Lawsuits

For immediate release:
Sept. 2, 2010

WASHINGTON, D.C. – Opposing any changes to the tax code that would encourage trial attorneys to file more lawsuits and add to the overall cost of health care, the American Medical Association (AMA) and 90 medical organizations sent a letter to the U.S. Treasury Department.  The organizations oppose a policy under consideration that would allow trial attorneys nationwide to deduct litigation expenses from their taxes in certain cases. 

“Changing the tax policy to allow trial attorneys to deduct court costs and other expenses would cost taxpayers $1.5 billion and increase the cost of health care in our nation,” said J. James Rohack, M.D., AMA Immediate Past-President.  “This change would encourage trial attorneys to file more lawsuits.”

The federal government should not create new incentives for attorneys to bring lawsuits.  A recent report by the AMA found 95 medical liability claims filed for every 100 physicians. Currently, 65 percent of medical liability claims are dropped or dismissed.  Average defense costs range up to more than $100,000 and take physicians away from patient care. 

“Any increase in the number of lawsuits filed will add unnecessary costs to our health care system,” Dr. Rohack said.  “Many physicians are forced to practice defensive medicine to protect themselves from meritless lawsuits.  The U.S. government estimates the cost of defensive medicine to be between $70-126 billion per year.”

“Any change to the tax code that encourages more lawsuits is a step in the wrong direction for our health care system,” Dr. Rohack said.  “Instead, the AMA supports proven medical liability reforms already working in California and Texas, as well as testing for innovative reform models, to reduce health care costs and keep physicians caring for patients. The Congressional Budget Office found that medical liability reforms that include a quarter-million dollar cap on non-economic damages would reduce the federal budget deficit by about $54 billion over ten years.  As our nation works to reduce the growth in health care costs, it’s clear that medical liability reform must be part of the solution.”



Heather Lasher Todd
AMA Media Relations

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