House passes tort reform; Senate bill faces struggle

Physicians stress that reforms are necessary to curb the burgeoning medical liability crisis.

By Tanya Albert, AMNews staff. Oct. 14, 2002. Additional information

Physicians are thrilled that the House of Representatives in September passed tort reform legislation that would, among other things, cap noneconomic damages in medical malpractice cases at $250,000.

But they realize that getting a bill to President Bush's desk this year likely won't happen because passage of a companion bill in the Senate before the new year is considered a long shot.

Representatives passed by a 217-203 vote the Help Efficient, Accessible, Low Cost, Timely Healthcare Act of 2002, a bill commonly known as the HEALTH Act. The vote was split mainly down party lines, but 15 Republicans voted against the bill and 14 Democrats voted for it.

Physicians and insurers said the bill's reforms are necessary to stop soaring medical liability insurance rates that over the past 18 months have been driving some physicians out of states where liability insurance premiums are unaffordable or insurance is unavailable. The HEALTH Act is modeled after California's tort reform -- commonly known as MICRA -- that many experts said has helped keep insurance affordable in that state.

"The record in California clearly documents the beneficial effects of common-sense medical liability reform," said AMA President-elect Donald J. Palmisano, MD. "This is an access problem for patients. We need to fix the problem. Onward to the Senate."

Physicians believe that by capping noneconomic damages, the bill would guard insurance companies from the threat of large pain and suffering jury awards, which on some occasions have reached tens of millions of dollars. That, in turn, would give companies more predictability regarding what they will have to pay out, thus helping to keep insurance rates affordable.

A wide array of groups agree, from the American Assn. of Health Plans and the National Assn. of Manufacturers to the American Health Care Assn. and the National Center for Assisted Living. The Bush administration supports the bill, which passed Sept. 26, saying it would improve access to quality care while reducing health care costs.

"Americans increasingly are finding that their doctors are closing their practices, limiting the types of patients they will see or leaving communities where they have long practiced because they cannot afford the rapidly increasing cost of malpractice insurance or because it is simply not available," Health and Human Services Secretary Tommy Thompson said after the House vote. "This legislation moves us in the direction of addressing this problem."

Beyond the noneconomic damages cap, the bill would:

Require plaintiffs to file lawsuits -- with few exceptions -- within three years of the injury.
Make physicians financially responsibile only for their share of the liability.
Impose no limits on awards for economic damages and future medical costs.
Set a higher threshold for juries to award punitive damages, which would be limited to the greater of two times the amount of economic damages awarded or $250,000.
Allow the court to limit what a plaintiff's attorney could recover.
Permit physicians to pay future damages over time, instead of in one lump sum.
Not supersede state caps that are already in place.

But critics of the bill said the cap takes away injured patients' rights to awards they may deserve, and that the HEALTH Act won't solve the problems some physicians are experiencing with liability insurance.

"No [insurance company] savings are required to be passed on to the doctors," Rep. Peter DeFazio (D, Ore.) said during the House debate. "This is another corporate bailout."

Rep. Anna Eshoo (D, Calif.) said she did not support the bill because the $250,000 cap also applied to lawsuits against drug manufacturers and medical device manufacturers.

The House bill would limit noneconomic damages to $250,000.

"This is not MICRA," Eshoo said. "It does not honor the people we represent."

Those views will likely be shared by the majority of members in the Democrat-controlled Senate.

A companion bill in that chamber -- also known as the HEALTH Act -- has been assigned to the Senate Judiciary Committee, but it's not expected to pass out of committee this year because senators are focused on homeland security and a possible war with Iraq.

And if the measure were to make it to the Senate floor this year, it doesn't appear to have the votes necessary to pass. The bill, introduced by Sen. John Ensign (R, Nev.), lacks the bipartisan support that the House version has.

Also, during debate over Medicare prescription drugs earlier this year, senators rejected an amendment that would have limited fees that lawyers can collect in medical malpractice cases and allowed physicians to pay large awards over time instead of in one large payment.

But with the momentum from the House passage and the possibility of a GOP takeover of the Senate in November's elections, physicians hold out hope that the HEALTH Act could gain Senate approval next year.

"Maybe after the election things will change in the Senate and it could get passed," said Mark Blackwood, MD, a Cleveland, Miss., obstetrician-gynecologist. Dr. Blackwood closed his practice for 10 days this summer because he could not find liability insurance.

ADDITIONAL INFORMATION:

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Vote results for the HEALTH act (roll call 421)

GOVERNMENT & MEDICINE