Tough Tort-Reform Bill in House Faces Challenges in Senate

January 25, 2011

January 25, 2011 — Organized medicine is applauding a tough tort reform bill introduced in the House yesterday that would cap noneconomic damages in malpractice cases at $250,000, but the measure could face challenges in the Senate.

Ostensibly, the House bill is bipartisan because 1 of its 3 sponsors is a Democrat, Rep. Dave Scott (D-GA), but the Help Efficient, Accessible, Low-Cost, Timely Healthcare (HEALTH) Act has been introduced on a regular basis by House Republicans since 2002. Although the HEALTH Act was passed several times in the House, it got nowhere in the Senate.

Rep. Phil Gingrey, MD (R-GA), a sponsor of the bill, has introduced the same legislation in previous sessions of Congress.

Unlike their Republican counterparts, Congressional Democrats have traditionally opposed caps on noneconomic (or pain and suffering) damages and other measures that they view as an encroachment on the jury system. President Barack Obama has signaled a willingness to push for tort reform measures that stress speedy, nonadversarial resolution of cases outside the courtroom, but whether he and fellow Democrats will stomach limits on noneconomic damages remains to be seen.

All that back story figures into the political prospects of the HEALTH Act in a divided Congress. Passage of the HEALTH Act seems assured in a GOP-controlled House. However, Democrats remain in charge of the Senate.

"We think it will be difficult for this bill to move through the Senate as written," Amy Murphy, a spokesperson for the American College of Cardiology, told Medscape Medical News in an email. "However, the climate has changed around this issue, and some sort of compromise could move through both chambers and be signed into law. We have other tort ideas that could be incremental, but significant, steps in reducing tort liability and costs."

Shawn Martin, director of government relations for the American Osteopathic Association, told Medscape Medical News that a presidential signature on the HEALTH Act is just as doubtful as Senate passage. "[President Obama] is not supportive, in my opinion, of comprehensive reforms such as those in the HEALTH Act," said Martin, whose organization, along with the American College of Cardiology and other medical societies, supports the bill.

In addition to capping noneconomic damages at $250,000, the HEALTH Act would, among other things:

  • cap punitive damages at $250,000 or 2 times the award for economic damages, whichever is greater;

  • replace "joint-and-several" liability, which makes any defendant in a suit liable for all the damages, with a fair-share rule that sets damages for a defendant in proportion to his or her share of responsibility for the injury;

  • allow defendants to inform juries of workers compensation payments and other outside benefits for injured parties that could be subtracted from jury awards;

  • set the statute of limitations for filing a malpractice suit at a maximum of 3 years, with more lenient terms for injured children younger than 6 years;

  • set limits on how much of a jury verdict plaintiffs' attorneys can receive in the form of contingency fees.

The other sponsors of the bill in addition to Scott are Rep. Lamar Smith (R-TX) and Rep. Phil Gingrey, MD (R-GA), an obstetrician-gynecologist who has introduced the legislation in previous sessions of Congress.

Justice and Efficacy of Caps Hotly Debated

House Republicans say the HEALTH Act would discourage frivolous malpractice suits and reduce healthcare costs, and medical groups such as the American Medical Association agree.

In a press release, American Medical Association Chairman Ardis Dee Hoven, MD, said that as a result of a California tort reform law considered to be a model for the HEALTH Act, malpractice insurance premiums for California physicians have risen at less than a third of the rate for the entire country between 1976 and 2009.

"Every dollar that goes toward medical liability costs is a dollar that does not go to patients who need care," said Dr. Hoven, who praised the law as repairing the "nation's broken medical liability system."

Last week, Dr. Hoven told the House Judiciary committee in a hearing on medical liability that nearly 61% of physicians aged 55 years and older have been sued for malpractice. Even though most claims are dropped or dismissed, she said, anxious physicians attempt to ward off such suits through defensive medicine, which according to a 2003 estimate from the US Department of Health and Human Services, increases annual healthcare spending by $70 billion to $126 billion.

However, a 2009 assessment of defensive medicine by the nonpartisan Congressional Budget Office put its price tag that year at just under $7 billion. That same report stated that a set of tort reform measures similar to those in the HEALTH Act would reduce the federal deficit by $54 billion over 10 years, largely by eliminating the extra tests and procedures that physicians order to shield themselves from a lawsuit.

The efficacy and justice of caps on noneconomic damages and other limitations on malpractice plaintiffs and their attorneys are hotly debated. In a statement issued today, the head of the American Association for Justice, which represents trial attorneys, denounced the HEALTH Act as "the most perverse form of legislating imaginable."

"After repealing a bill that provided health insurance to over 30 million Americans," said American Association for Justice President Gibson Vance, "the next proposal from the new House leadership is to take away the legal rights of injured patients, remove any incentive to improve safety, and leave people at risk for more injuries from negligent care."

The debate on caps in particular has regularly spilled over into the nation's courts. The supreme courts in a number of states, including Illinois and Georgia last year, have declared caps on noneconomic damages unconstitutional because they violate the right of a plaintiff to have a jury set these damages as it sees fit. In other states, however, cap laws have survived constitutional challenges. In all, 30 states limit damages of various sorts in malpractice cases, and 21 cap noneconomic damages in particular.

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