States cautious about tort reform success

Laws seem to be helping improve the liability market, but court challenges still lie ahead.

By Amy Lynn Sorrel, AMNews staff. Sept. 11, 2006.

Physicians in Arkansas and Nevada say they are seeing the fruits of their labor as tort reform efforts take root and help stabilize the medical liability climate. But doctors are curbing their enthusiasm, knowing that legal challenges still menace the recently enacted measures.

The two states are among 21 that the American Medical Association has declared to be in crisis because rising liability premiums are forcing doctors to retire early, give up high-risk procedures or move out of state.

But doctors in Arkansas and Nevada credit reforms passed in 2003 and 2004 respectively with improving the overall liability climate. In Arkansas, doctors say an affidavit of merit is abating medical liability case filings; in Nevada, caps on noneconomic awards seem to be inviting more insurers into the market.

An August Arkansas Insurance Dept. report found that rate increases had "slowed" since the passage of a 2003 statute that caps noneconomic damages at $1 million and requires plaintiffs to submit an affidavit of merit from a medical expert with the filing of a medical liability case.

But state Insurance Commissioner Julie B. Bowman concluded that it is "premature to expect [reforms] to have had a significant impact on rates" because data were based on claims filed before the law took effect, or relatively young claims filed since.

David Wroten, executive vice president of the Arkansas Medical Society, pointed to the state's largest physician insurer as evidence that the law is having an impact. In May, State Volunteer Mutual Insurance Co. announced that there would be no rate increase for the year. That follows a 5.5% increase in 2005. The company also reported a 50% dip in claims filed per 100 of its insured doctors between 2002 and 2006. The company attributed the decline to "the deterring effect" of the affidavit requirement on claims that lack medical merit.