Tort reform clears House, moves forward in states

Compromise legislation is in the works in the Senate, traditionally a dead end for medical liability measures.

By Tanya Albert, amednews staff. April 7, 2003.

Physician medical liability rallies, protests and old-fashioned lobbying seem to be paying off as tort reform action at the federal and state level takes full bloom this spring. But tough challenges are still ahead.

The U.S. House of Representatives in March passed tort reform that includes a $250,000 cap on noneconomic damages -- something physicians have clamored for, believing it will help stabilize medical liability insurance premiums that have driven some doctors out of business.

Meanwhile, at the state level, West Virginia, Arkansas and Idaho passed measures in March, and a half-dozen other state legislatures from New Jersey to Washington made progress on tort reform proposals.

As state lawmakers continue to grind away, national attention now turns to the Senate, which has been the demise of federal tort reform in previous years. When the House passed tort reform last session, a Senate bill died in committee.

This year, though, Republicans narrowly control the Senate. Legislation could go to the Senate floor as early as May. But Democrats have already vowed to oppose any bill with a $250,000 cap. They favor reform of insurance laws as the way to bring liability premiums under control. Still, with Bush administration backing and national polls that show most Americans support reasonable action, tort reform advocates remain confident that Congress will adopt a measure this year.

3 states passed tort reform measures in March; 6 more have made progress on their proposals.

"This will eventually be fixed because the American people will demand it," said American Medical Association President-elect Donald J. Palmisano, MD. "Patients' lives are in danger. We don't want to see additional cases of patients in an hour of need not having a physician available."

A compromise bill in the Senate was in the works at press time. Sen. Dianne Feinstein (D, Calif.) and Senate Majority Leader Bill Frist, MD (R, Tenn.), were discussing a measure that included a $500,000 cap on most noneconomic damages, a spokesman for Feinstein said. In cases of severe disfigurement or death, that limit would be $2 million or $50,000 multiplied by the number of years the person was expected to live. There is discussion that the bill would allow states to continue to set their own caps.

Also, Sen. John Ensign (R, Nev.) last month introduced tort reform legislation with five Republican co-sponsors. It has similar provisions and the same title as its House counterpart, the Help Efficient, Accessible, Low-cost, Timely Health Care (HEALTH) Act of 2003.

"The AMA is reviewing all possible legislation in the Senate," Dr. Palmisano said. "What we are going to do is support MICRA-type reform or an alternate model proven to be effective in a state." MICRA is the acronym for California reforms that physicians say have been successful.

Passage in the House

The tort reform bill the House passed is backed by the AMA and other medical associations. The 229-196 vote fell mostly along party lines.

In addition to the $250,000 cap on noneconomic damages -- commonly known as pain and suffering awards -- the House bill would hold physicians responsible for only their portion of damages, impose a three-year statute of limitations on most medical malpractice cases, and limit punitive damages to two times the economic damages, or $250,000, whichever is greater. The measure also would allow states to set their own caps.

The AMA and other medical associations, President Bush, Health and Human Services Secretary Tommy Thompson, and the American Assn. of Health Plans immediately praised the bill's passage and urged the Senate to approve legislation this year.

"Today's House vote is an important step toward creating a liability system that fairly compensates those who are truly harmed, punishes egregious misconduct without driving good doctors out of medicine, and improves access to quality, affordable health care by reducing health care costs," Bush said.

But others were critical of the House bill and will oppose measures headed to the Senate. Presidential hopeful Sen. John Edwards (D, N.C.) instead backs changes that would end a special exemption insurance companies have from antitrust laws. He also wants more laws to discourage frivolous lawsuits.

"The choice is simple," Edwards said after the U.S. House passed the HEALTH Act, "President Bush is on the side of the big insurance companies. I trust the regular Americans who serve on juries to do what's right for women, children, seniors and other people whose rights this president wants to take away."

States take action

More than half the nation's state legislatures have been busy this year considering bills that would cap noneconomic damage awards or implement other tools that are part of the federal legislation.

The AMA has identified 18 states as being in the midst of a medical liability insurance crisis that has doctors in some specialties retiring early, discontinuing high-risk procedures or leaving the state. In March, West Virginia, one of the crisis states, passed tougher reforms, including lowering its current $1 million cap on noneconomic damages to $250,000. Gov. Bob Wise has signed the bill into law.

"By no means does the legislation remedy the whole problem, but it is a step in the right direction and a very important step," said West Virginia State Medical Assn. Executive Director Evan Jenkins.

A second state the AMA says is in crisis, Arkansas, has a new law that caps punitive damages at the greater of $250,000 or three times the compensatory damages awarded, as long as the amount doesn't exceed $1 million.

In Idaho, legislation now awaits Gov. Dirk Kempthorne's signature, which it is expected to receive. Idaho is not a state the AMA considers to be in crisis, but it is a state that is seeing signs of trouble.

Lawmakers passed measures that state medical society executives believe strengthen existing laws, including lowering the noneconomic damages cap to $250,000. The cap would be adjusted annually for inflation. Idaho had adopted a $400,000 cap in 1987 that this year reached $682,000 after being annually adjusted for inflation.

"Idaho doctors will be in better shape in the near term and long term by having lower caps on the noneconomic damages," said Bob Seehusen, CEO of the Idaho Medical Assn.

At press time, one body of state legislatures in Washington state and in Missouri had passed tort reform. In New Jersey, the Senate in March passed a bill that includes an amendment to a House version of tort reform. The amendment includes a $300,000 noneconomic damages cap and an excess liability fund. The bill moves back to the House for approval.

ADDITIONAL INFORMATION:

State moves

West Virginia, Arkansas and Idaho in March strengthened their tort reform laws. The West Virginia and Arkansas bills have been signed into law. Idaho's bill awaits the governor's signature.

West Virginia

Lowers the noneconomic damages cap from $1 million to $250,000 per occurrence. Caps all trauma damages at $500,000.
Holds physicians financially responsible only for an amount equal to their degree of fault.
Requires that payments a plaintiff received from disability income, health insurance, accident insurance or other collateral sources be deducted from the jury award.

Arkansas

Caps punitive damages at the greater of $250,000 or three times the compensatory damages, not to exceed $1 million.
Requires medical malpractice lawsuits be filed in the county where the alleged incident occurred.
Holds physicians responsible only for their portion of damages.

Idaho

Reduces the noneconomic damages cap to $250,000, adjusted annually for inflation. The previous cap was adjusted for inflation annually and had grown to $682,000.
Implements reforms that further reduce financial risks that medical device manufacturers, pharmaceutical makers and other health entities face.