Trump Budget Revives Malpractice Damage Caps

May 23, 2017

In a budget that proposes deep cuts in federal healthcare programs, the Trump administration is reviving medical liability reforms long sought by organized medicine and Congressional Republicans that would cap noneconomic damages at $250,000 and otherwise tilt courtrooms more in favor of physicians.

The White House budget for fiscal 2018 released today claims that its tort reforms will save the US Department of Health and Human Services (HHS) almost $32 billion over 10 years and the entire federal government $55 billion. In the big picture, that $55 billion represents about 1.5% of the $3.6 trillion in government spending that President Donald Trump wants to eliminate.

According to the budget document, tort reform would save money in part by liberating physicians from defensive medicine and its bloated services.  Besides capping noneconomic damages at $250,000, the proposed reforms would, among other things:

  • Give physicians "safe harbor" protections if they adhere to clinical standards

  • Exclude a physician's expression of regret or apology from evidence considered in court

  • Set the statute of limitations for malpractice claims at 3 years to speed up the judicial process

  • Let defendants pay damages of $50,000 or more in future installments instead of immediately

  • Allow courts to change an attorney's share of a malpractice award

The chances of these medical liability changes, as well as many provision aspects of the Trump budget, passing the Senate are slim. Senate Democrats, who command enough votes to filibuster legislation they don't like, typically review GOP-crafted tort reforms as weakening the right of injured plaintiffs to their day in court.

Former CDC Director Denounces Proposed Cuts to Agency

The tort reform proposals in the White House budget come as a surprise,  as they weren't previewed in a budget outline the administration released in March. That outline, however, generally prepared physicians, hospitals, and the rest of the healthcare industry for the massive spending reductions spelled out today.

The biggest cut would belong to Medicaid — $610 billion over 10 years. The Trump administration said it would reap those savings by giving states more control over their Medicaid programs and changing how the federal government helps fund them. Right now, federal contributions to state Medicaid programs are open-ended, but in the Trump budget they would be fixed, taking the form of block grants or a per-capita cap — states could take their pick beginning in fiscal 2020. Also proposed in the GOP bill to repeal and replace the Affordable Care Act, this form of payment gets criticized in healthcare policy circles for underfunding state Medicaid programs because the federal contribution wouldn't keep up with rising healthcare costs. Financially hard-pressed states, it's argued, couldn't make up the difference and would shrink eligibility, benefits, and provider reimbursement instead.

HHS itself would sustain an almost 18% budget cut in 2018, amounting to $15.1 billion. More than a third of that — $5.8 billion — would come from the National Institutes of Health (NIH), which would take an 18% hit. The administration said it would achieve those savings by reorganizing the agency, in part by eliminating its Fogarty International Center, which seeks to bolster the healthcare infrastructure in developing countries, particularly when it comes to detecting and combating pandemic diseases. A large swathe of the medical field, including the Association of American Medical Colleges and major medical societies such as the American College of Physicians, have decried the NIH budget cut as short-sighted ever since it was first broached in March.

The Centers for Disease Control and Prevention (CDC) doesn't escape the ax, either. It has $1.3 billion less to spend in 2018, a decrease of roughly 17%. The Trump budget pulls $82 million out of immunization and respiratory disease programs, $65 million from emerging and zoonotic infectious diseases, $222 million from chronic disease prevention and health promotion, and $136 million from public health preparedness and response, to name just a few cuts.

Tom Frieden, MD, MPH, the agency's director during the Obama administration, tweeted that the proposed budget for the CDC would "increase illness, death, risks to Americans and healthcare costs."

Another hard hit HHS agency is the Substance Abuse and Mental Health Services Administration, which would lose about $400 million in 2018 for a 9% decrease. In particular, the budget lops off $73 million from substance abuse prevention programs at a time when public health experts call for more spending to combat the opioid abuse epidemic.

It could have been worse, however, on the substance abuse front. The Trump administration initially considered reducing the budget line for the Office of National Drug Control Policy in the White House by $380 million, or 94%, namely by eliminating two of its key programs.  One is the High Intensity Drug Trafficking Areas (HIDTA) program, which assists law enforcement in curbing the manufacture and sale of illegal drugs. The other is the Drug-Free Communities (DFC) Support Program, which funds programs to prevent youth substance abuse. In the budget document released today, HIDTA and DFC survived with spending cuts of only $3 million apiece.

Follow Robert Lowes on Twitter @LowesRobert

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