Changes in Congress may renew focus on malpractice reform

Key Points

House Republicans identified medical liability reform as a legislative priority following the midterm elections, which gave them control of that chamber and strengthened their numbers in the Senate. Rep. Phil Gingrey, M.D. (R-Ga.), a practicing OB-GYN, has sponsored the Help Efficient, Accessible, Low-Cost Healthcare (HEALTH) Act, providing a rallying point for reform advocates and language to be considered as the issue moves forward.

That measure, supported by many physician groups, would set a statute of limitations of three years after the date of manifestation of injury, or one year after the claimant discovers the injury, with certain exceptions; would provide for full recovery of economic damages, but limits non-economic damages to $250,000; would disallow punitive damages unless an actual economic judgment is rendered, and then limit the amount to no greater than twice the economic damages; would make each party liable only for the amount of damages proportionate to the percentage of responsibility; and would allow courts to control attorney contingency fees, with the percentage decreasing as the amount of the award increases.

House Speaker Rep. John Boehner (R-Ohio) said in his first news conference after being named to the post that the healthcare reform law needed to be "repealed and replaced with common-sense reforms to bring down the cost of health insurance." Noting the Senate probably would not accept wholesale repeal, however, Rep. Boehner said he would work to dismantle the law "piece by piece."

One of those pieces could be the $25 million grant program established to allow states to implement tort reform test programs aimed at reducing the number of medical malpractice lawsuits that are filed. Many Republicans have strongly criticized that provision as inadequate, having sought such measures as liability caps and the creation of health courts.

Thus, that provision is expected to be squarely targeted by reform proponents whose hand has been strengthened by the National Commission on Fiscal Responsibility and Reform, which issued its report in December recommending dramatic steps to curtail federal spending.

Recommendations

Among its recommendations, the commission said that Congress should enact medical malpractice reform by taking into account outside sources of income when deciding awards; imposing a statute of limitations on medical malpractice lawsuits; replacing joint-and-several liability with a fair-share rule under which a defendant would be liable only for the percentage of the final award equal to his or her share of responsibility; creating specialized "health courts" for medical malpractice lawsuits; and allowing "safe haven" rules for providers who follow best practices of care.

President Obama said in a speech to the American Medical Association (AMA) in June 2009 that too many doctors order unnecessary tests and treatments to protect themselves from lawsuits. "We need to explore a range of ideas about how to put patient safety first, let doctors focus on practicing medicine and encourage broader use of evidence-based guidelines," he said.

One year ago, the American Academy of Dermatology Association co-signed a letter to President Obama with the AMA and 75 other physician groups, stressing the need for medical malpractice reform. The letter cited Congressional Budget Office (CBO) estimates that medical liability reforms would reduce federal budget deficits by about $54 billion from 2010 to 2019.

According to the CBO, "tort reform would lower costs for healthcare both directly, by reducing medical malpractice costs - which consist of malpractice insurance premiums and settlements, awards and legal and administrative costs not covered by insurance - and indirectly, by reducing the use of healthcare services through changes in the practice patterns of providers."

The letter to President Obama pointed out that while 60 percent of liability claims against physicians are dropped, withdrawn or dismissed without payment, even those cases cost an average of $22,000 to defend in 2008. In cases that go to trial - in which physicians are found to be not negligent 90 percent of the time - the cost is more than $110,000 per case. The letter urged the president to support federal legislation that includes "proven liability reforms" such as those enacted in California and Texas, while preserving existing and future medical liability reforms enacted by the states.

"We also urge you to seek bipartisan agreement on moving forward with federal legislation that provides incentives for states to pursue a wide range of alternative reforms, including health courts, administrative determination of compensation, early offers and safe harbors for the practice of evidence-based medicine," the groups said. "We urge you to seize this opportunity to reach agreement on meaningful medical liability reforms to lower healthcare costs and the federal deficit, improve access to physician services and provide fair compensation to patients who are truly harmed by medical negligence."

That letter was sent one year ago, in February 2010. Perhaps now, this new Congress will act.

Bob Gatty, former congressional aide, covers Washington for businesses specializing in healthcare and related issues. Contact him at bob@gattyedits.com
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