Tort reform passes in Ohio, but there's no immediate relief

Physicians believe the third time will be the charm when it comes to reforms withstanding a state constitutional challenge.

By Tanya Albert, AMNews staff. Jan. 13, 2003. Additional information

As the legislative season drew to a close, Ohio became the fourth state to pass tort reform last year in an effort to stabilize the medical liability insurance market for physicians, who are increasingly unable to afford their premiums.

The measure would cap noneconomic damages and shorten the time that patients have to file a lawsuit. Ohio doctors see it as just the beginning of changes that are needed to bring down premium increases, which have averaged 40% there during the past two years.

They say more must be done to stop physicians from continuing to retire early, giving up high-risk procedures or moving to states with lower medical liability premiums.

"We're calling this a first step," said Tim Maglione, senior director of government relations for the Ohio State Medical Assn.

Ohio liability insurance premiums rose an average of 40% in the past 2 years.

Maglione noted that this reform package is stronger than one passed in the 1990s that the Ohio Supreme Court found unconstitutional.

Ohio is one of 12 states the American Medical Association identified in 2002 as being in a medical liability crisis in which physicians can't afford insurance or can't find a company willing to insure them. By passing tort reform -- which at press time was expected to be signed by the governor -- Ohio joined Mississippi, Nevada and Pennsylvania as crisis states that approved tort reform in 2002.

The Ohio measure would:

Place a $350,000 cap on noneconomic damages for each victim in most cases and an additional $150,000 limit for claims that a spouse or child might bring for loss of companionship.
Put a $500,000 cap on noneconomic damages for each victim in catastrophic injury cases -- the most egregious cases of medical malpractice, such as loss of limb. Death is not included because Ohio has a separate law that prohibits caps in wrongful death cases. There's an additional $500,000 limit for claims that a spouse or companion might bring.
Allow judges to review what an attorney is paid.
Prohibit lawsuits against physicians beyond four years after the incident occurred, even if the injury was not discovered until later. An exception would be made for minors and "persons of unsound mind."
Give a defendant the right to ask the court to review a medical malpractice lawsuit and determine whether there is a "good faith basis" for the claim. If the court says no, the plaintiff has to pay the defendant's legal costs.
Allow the jury to know how much money a plaintiff received from insurance companies and other sources.
Let physicians pay damages of more than $50,000 over time, rather than in one lump sum.
Hold physicians responsible only for the portion of damages for which they are liable.

Trial lawyers opposed the bill and are disappointed that it passed.

"It will cause some individual victims of medical malpractice to be undercompensated or not compensated," said Richard Mason, executive director of the Ohio Academy of Trial Lawyers.

Physicians respond

The Ohio bill -- the result of down-to-the-wire compromises between the state's House and Senate as the term wound down -- won't mean immediate relief for physicians.

Brian Bachelder, MD, a family physician from Mount Gilead, will still have to give up the obstetrics part of his practice. His 2003 premium as a family physician performing 30 deliveries would have been $57,000.

"I was afraid to ask what it would cost if I did the 31st delivery," said Dr. Bachelder. He would pay $8,000 next year if he drops obstetrics and buys $110,000 tail coverage.

Ohio law prohibits damage caps in wrongful death cases.

His patients, some of whom have trouble affording gas to make the drive to his local office, will have to travel 50 to 60 miles for prenatal care because he is the only physician delivering babies in Morrow County.

Dr. Bachelder, president of the Ohio Academy of Family Physicians, said he was disappointed that the legislation would create a cap higher than the $250,000 limit adopted in California in the mid-1970s and that it doesn't automatically limit attorney fees. He hopes that the state will adopt more reforms that stop frivolous cases from being filed.

"There's a lot more work to be done," Dr. Bachelder said.

Insurance rates are influenced by how much a company has to pay out in settlements and awards in a particular geographic area, said Frank O'Neil, spokesman for Medical Assurance Co., which writes professional liability policies for physicians in Ohio and other states in the Midwest and Southeast. Consequently, tort reform doesn't result in immediate drops in rates.

What tort reform provides -- particularly jury award caps -- is predictability that allows insurance companies to establish stable rates in the future.

"When the loss environment becomes unpredictable, you have to price for the worst case," O'Neil said.

Also, before insurance companies adjust their premiums, they will wait to see if the tort reform package is challenged in court and whether it is upheld, he said.

Passing legal muster

This is the third time the Ohio Legislature passed tort reform. The state's Supreme Court found 1991 and 1996 laws unconstitutional.

The Ohio Academy of Trial Lawyers has no plans to challenge the measure's constitutionality, Mason said.

A legal challenge by someone, though, is practically inevitable.

Ohio's tort reform measure includes damage caps and time limits for filing suit.

And if that happens, the OSMA expects the Ohio Supreme Court will rule differently. In 1999, the last time the court ruled on the issue, it found the tort reform package unconstitutional by a 4-3 vote. In November 2002, one of the judges who sided against the law was replaced with a judge who, because of her judicial philosophy, is more likely to find the tort reform package constitutional.

Also, the legislation attempts to address the concerns the previous court raised.

"We're confident it will withstand a constitutional challenge," Maglione said.

ADDITIONAL INFORMATION:

Crisis takes its toll

Among Ohio physicians:

96% are concerned about the impact of rising professional liability insurance rates on patients' access to care.
83% report an increase in premiums during the past two years.
72% in high-risk specialties say insurance premiums have affected their willingness to perform high-risk procedures.
34% order more tests or consultations, practicing defensive medicine.

Source: Ohio State Medical Assn. survey of 432 physicians

GOVERNMENT & MEDICINE