Senate fails to pass two medical liability reform bills

Law would have capped noneconomic damages at $750,000, per-defendant damages at $250,000.

Issue: June 2006

The Senate recently failed to pass two medical liability bills, including one modeled after a successful Texas law, which would have capped noneconomic damages and protected certain high-risk specialties.

Both bills received fewer than 50 of the 60 votes required for passage in the May 8 rollcall.

Sen. John Ensign (R-Nev.) introduced S.22, the Medical Care and Access Protection Act of 2006. The legislation would have capped total noneconomic damages at $750,000, or $250,000 against one physician and up to two providers or institutions if passed. Sen. Rick Santorum (R-Pa.) introduced S.23, a companion bill that would have protected only obstetrician/gynecologists, also with a $750,000 total cap and $250,000 per-defendant cap.

The bills’ supporters included Doctors for Medical Liability Reform (DMLR), the largest pro-reform group in the United States, and the American Academy of Orthopaedic Surgeons (AAOS).

“While we’re disappointed with the outcome, we did get a very strong commitment from our grassroots network,” said DMLR chair and former AAOS president Stuart Weinstein, MD. DMLR represents more than 230,000 physicians from 11 specialties.

“Over 35,000 people signed the DMLR petition calling for national medical liability reform, and that was just in the last few weeks,” Weinstein told Orthopedics Today. “Over 7000 concerned citizens wrote their senators urging them to support S.22.”

Both bills offered proven solutions to several problems, making their defeat even more difficult to swallow, said Weinstein, former AAOS president and professor of orthopedic surgery at the University of Iowa.

“Basically, what was good about the bills was they offered to the Senate a solution, which had a track record,” he said. “In other words, the bills were modeled after the Texas medical liability reform of 2003. It you look at the success of Texas and compare how Texas was in 2003 compared to now, you find that in 2003, they had lost numerous physicians, had many underserved areas with no medical service and had lost the majority of their insurance carriers. By 2006, it now has somewhere between 25 and 30 new carriers of medical liability insurance. Over 3000 physicians came to Texas, including high-risk specialists.”

Opponents included the Association of Trial Lawyers of America (ATLA), whose deputy communications director, Mark Sokolove, called the $750,000 total noneconomic damage cap “misleading” because in many medical malpractice cases there is only one defendant, with pain and suffering really capped at $250,000, regardless of the pain inflicted or the extent of physical damage. “The only time the $250,000 cap would not apply is when an individual is unfortunate enough to be victimized by the negligence of a doctor and a health care institution at the same time,” he said.

“This one-size-fits-all approach is unfair to victims and limits their ability to hold wrongdoers accountable,” Sokolove told Orthopedics Today. “Essentially, it’s letting those who are negligent go off the hook for providing inadequate care.”

“There have been close to 100,000 deaths that occur each year from preventable medical errors. Therefore, we believe very strongly that patients need the civil justice system to ensure incentives for HMOs, health insurance companies and hospitals to actually provide quality care.”

“We believe it’s the civil justice system that is going to ensure quality care, not any type of civil justice restriction the senators were pushing on the Senate floor,” he added.

The Senate rejected several liability reform bills since 2002. Last fall, Senate Majority Leader Bill Frist (R-Tenn.) moved to hold a Senate vote on liability reform, but a vote never took place. Last July, the House passed a bill that would cap punitive damages at $250,000 and limit plaintiff attorneys’ contingency fees.

The “malpractice insurance crisis” is over, according to a recent Americans for Insurance Reform/Center for Justice & Democracy study. But some industry insiders, including the Physician Insurers Association of America and Council of Insurance Agents and Brokers (CIAB), question the study methods and data.

Malpractice insurance premiums did not increase in the last half of 2005, said CJD Executive Director Joanne Doroshow and CJD Advisory Board member J. Robert Hunter. Rather, rates rose 3% during the last quarter of 2004 and 63% in the fourth quarter of 2002, they said.

The insurance industry’s “economic cycle, not a tort law cost explosion,” caused the crisis, the authors said, adding that caps have “absolutely no impact” on malpractice premiums. California enacted a $250,000 cap in 1975 but saw premiums soar 450% in the next 13 years.

After California voters approved Proposition 103 — an insurance reform law — in 1988, premiums dropped 8% in California but rose 25% nationally between 1988 and 2000, the authors said.

“What I think we have is a hiatus in the rise in premiums for a while, but the truth is that the average cost of a paid claim continues to rise. As long as that happens, premiums are going to go up,” said PIAA President Lawrence Smarr.

Smarr questioned the authors' decision to blame the crisis on “economic cycles.”

“I don’t think there’s any relationship,” he said. “What does happen is that medical malpractice is a very difficult line of business to price because, unlike auto insurance where claims are reported an hour after they happen, in medical malpractice, claims are reported 22 months on average after they happen,” he said.

Physician-owned companies insure more than 60% of American health care professionals against medical liability, according to the PIAA, he said.

The Ohio state Senate recently passed a liability reform bill designed to reduce frivolous lawsuits. The bill does not call for caps. However, it would require an expert witness to sign a certificate stating that he or she practices in the same specialty as the defendant, force out-of-state physicians serving as expert witnesses to have temporary Ohio medical licenses and label false testimony as “unprofessional conduct,” with disciplinary action, according to the Ohio State Medical Association (OSMA). Physicians’ and other providers’ apologies and expressions of sympathy or regret would not be admissible in court as evidence of negligence. Medical liability insurance companies would have to report claims data to the state insurance department. Physicians wrongly named in malpractice lawsuits would be dismissed from cases in a timely fashion, OSMA said.

The Tennessee House Judiciary Committee’s Civil Practice subcommittee defeated a bill that would impose a $250,000 cap on noneconomic damages against providers and the same cap on noneconomic damages against facilities, with a maximum $500,000 award in a single case. The bill would also limit attorney’s fees, according to the Tennessee Medical Association.

The TMA and 46 other organizations backing the legislation contend that malpractice claims and high damage awards are forcing many physicians out of state. The bill's opponents questioned whether lawsuits have caused a crisis in Tennessee and warned that the bill would hurt patients who are victims of incompetence.

The American Medical Association named Tennessee its 21st medical liability “crisis” state.

For more information:
Association of Trial Lawyers of America Web site: atla.org.
Doctors for Medical Liability Reform Web site: protectpatientsnow.org.
Doroshow J, Hunter, JR. (Americans for Insurance Reform/Center for Justice & Democracy): Insurance "crisis" officially over - medical malpractice rates have been stable for a year. Available at insurance-reform.org/pr/MMSOFTMARKET.pdf.
Physician Insurers Association of America Web site: piaa.us.