Voter-backed Nevada tort reform faces court challenge

The Supreme Court of Nevada will decide the fate of a portion of the state’s medical liability reform that has helped stabilize insurance rates for physicians and encouraged doctors to move to the Silver State and stay there to provide care.

The state’s highest court is considering the constitutionality of a law that allows juries to hear whether a medical liability plaintiff’s medical bills were paid by a third party, such as a health insurance company. Under the law, jurors considering monetary awards in medical liability cases can choose whether to award a plaintiff economic damages for money the insurance company already paid to settle medical bills.

It’s a reform that Nevada voters created through a statewide ballot initiative in 2004 in an effort to lower liability insurance rates for physicians and, in turn, keep doctors in a state they were fleeing because of high insurance costs. The Litigation Center of the American Medical Association and State Medical Societies and the Nevada State Medical Association have filed an amicus brief in the case of Capanna v. Orth supporting the statute’s constitutionality.

“Creating a favorable malpractice environment for physicians increases access to health care and prevents future public health crises like hospital closures,” the AMA Litigation Center told the court through its brief. “Allowing a jury to hear evidence of third party payments serves the legitimate purpose of preventing double payment for medical malpractice damage awards and promotes the government interest of increasing access to quality health care in Nevada.”

The law rests on “sound policy considerations” and is based on a similar California statute that has withstood constitutional challenges, the Litigation Center told the court. Also, the brief points out that “nothing in the law would prevent [juries] from awarding double recovery, as they did in this case.”

Tort reform, physician shortage still priorities

The case before the Supreme Court stems from a medical liability lawsuit that University of Nevada, Las Vegas football player Beau R. Orth filed after Albert H. Capanna, MD, performed surgery on the lumbar region of the athlete’s spine.

Orth’s lawsuit claimed that Dr. Capanna operated on the wrong disk, leaving him permanently injured. At trial, Orth asked that information about the more than $130,000 in payments his insurance company made for his medical bills not be presented to the jury. The trial judge denied that motion and Dr. Capanna presented evidence that the Orth’s insurer covered all of Orth’s medical expenses. At the end of the trial, the jury awarded damages that included the full amount of Orth’s medical costs.

Dr. Capanna appealed the verdict to the Supreme Court of Nevada. Orth filed a cross-appeal that argues the reform, known as NRS 42.021, is unconstitutional, violates constitutional guarantees of equal protection of the laws.

The Litigation Center’s brief rebuts Orth’s argument, telling the court that the law helps create an “environment conducive for physicians to practice,” which also is a benefit for the patients that physicians treat and serve.

The law is a direct result of the Keep Our Doctors in Nevada ballot initiative, which voters passed with nearly 60 percent support. It builds on reforms the state legislature passed in 2002 that included capping noneconomic damage awards, shortening the statute of limitations and eliminating joint and severable liability. Physicians in their friend-of-the-court brief say that combating an ongoing physician shortage and keeping a medical liability crisis at bay continues to be a legislative priority in Nevada.

The brief cites data that shows Nevada ranks 47th in the U.S. for the number of physicians per 100,000 residents. It also points to studies that have found that eight of Nevada’s 17 counties don’t have emergency medicine physicians and that just six counties have pediatricians, five counties have cardiologists and three counties have oncologists.

“Invalidating malpractice liability limitations like NRS 42.021 would run contrary to the legislature’s current efforts to create an environment encouraging doctors to both stay in Nevada and move to Nevada to treat its citizens,” the Litigation Center brief says.

The Supreme Court of Nevada heard oral arguments June 4 and a decision is expected later this year.