 Health Policy Tracking Service Issue Briefs Summary
Updated April 1, 2003
Medical Malpractice: Tort Reform
Many questions surround the origins of the escalating cost of medical malpractice coverage. Insurers and health providers claim excessive litigation and overly generous jury awards have hardened the market. The American Trial Lawyers Association and consumer advocacy groups claim insurance premium rates have not tracked medical inflation or the payouts of jury awards over the last 30 years. The American Medical Association has declared a state of emergency for several states in which no or little controls have been implemented to cap jury awards.
Physicians are not only challenged with obtaining and retaining medical liability coverage, but also with receiving coverage adequate to protect them in the event of a suit. With the complexities and variety of coverage plans, physicians often are unaware that gaps in coverage may exist. Most states have some form of base coverage requirements, whether provided through an employer or issued to an individual practitioner.
The American Academy of Actuaries Work Group conducted a study of the various elements that may have some success of stabilizing the market. Their recommendations include a cap on noneconomic damages and an offset for collateral payments from other sources. The belief is that these reforms would limit the financial exposure of health-care providers to lawsuits and ensure that damages would not be collected through multiple suits.
Many states have placed limitations on a variety of damages, however several states simply do not allow the insurability of certain types of punitive damages. In these cases, even if an insured's plan covers payment for punitive damages the state law prohibits the coverage.
2002 Legislative Activity
Medical malpractice commanded overwhelming attention of state legislators in 2002. Legislation in eight states-Florida, Mississippi, Nevada, New York, Ohio, Pennsylvania, South Dakota, and Wisconsin-were enacted laws affecting basic malpractice coverage, litigation of actions or damage awards. Mississippi legislators enacted a measure to limit non-economic damages. The Commissioner of Insurance is required to collect and report to the legislature certain data concerning affordability and availability of medical malpractice insurance in the state. The New York Legislature enacted a measure that imposed increases on the minimum amount of primary malpractice insurance coverage for physicians and dentists. The law requires physicians, surgeons and dentists participating in the excess medical malpractice insurance program to participate in a proactive risk management program. Lawmakers in Ohio enacted a measure that addressed medical malpractice actions taken against nursing homes, residential facilities and their employees. The law sets the statute of limitations on malpractice actions against these providers at two years. Pennsylvania lawmakers enacted legislation that added language to limit the time period in which an action may be asserted to within seven years from the date of the alleged tort or breach of contract. The measure adds that if the injury is, or was, caused by a foreign object unintentionally left in the individual's body, the limitation does not apply. However, if the claim is brought relating to death action or relating to survival action, the action must be initiated within two years after the death, in the absence of affirmative misrepresentation or fraudulent concealment of the cause of death. Lawmakers in Wisconsin addressed the issue of medical malpractice coverage for nurse midwives when they enacted Assembly Bill 725, April 2002. The measure prohibits a nurse-midwife from practicing unless he or she has in effect malpractice liability insurance in an amount that is at least the minimum amount specified in rules.
2003 Legislative Activity
In response to the call to continue to press forward with malpractice reforms, legislators in 30 states-Arizona, Colorado, Connecticut, Florida, Hawaii, Idaho, Illinois, Indiana, Kentucky, Maine, Massachusetts, Minnesota, Mississippi, Missouri, Montana, Nevada, New Hampshire, New Jersey, North Dakota, Ohio, Oregon, Rhode Island, South Carolina, Tennessee, Texas, Utah, Virginia, Washington, West Virginia, and Wyoming-are considering a variety measures to change existing systems during the 2003 session.
Arkansas legislators enacted legislation that amends the requirement for burden of proof on an action for medical injury. The plaintiff must use expert testimony provided only by a medical care provider of the same specialty as the defendant.
Legislators in Idaho repealed the exceptions for a cause of action from the manufacture of any medical device or pharmaceutical products. The law also reduces the maximum allowable award for noneconomic damages in actions for personal injury and limits judgments for punitive damages.
Montana legislators removed language in state statutes requiring any awards for punitive damages to be a unanimous decision concerning liability and amounts by the judge or jury.
In Ohio, Senate Bill 281 amended the statute of limitations for filing a claim for medical malpractice. The measure imposes no limitation on compensatory damages for economic loss. However, it establishes limits on noneconomic damages for injury, death or loss or property.
Utah lawmakers enacted a new measure that provides a binding arbitration agreement between a patient and a health care provider to be validly executed or, renewed the patient must be given, in writing and by verbal explanation, the information on the right of the patient to rescind the agreement within 30 days of signing the agreement. This also prohibits the denial of emergency care on the sole basis that a patient refused to enter into a binding arbitration agreement with a health care provider. Lastly, there are provisions that provide immunity from liability for certain charity care.
In West Virginia, legislators enacted House Bill 2122, which contains a provision to assist physicians in covering their expenses for medical malpractice coverage by establishing a tax credit which allows an annual credit equal to 21 percent of their adjusted medical liability insurance premium. Other provisions in the act set maximum awards for non-economic loss and allow presentation of collateral source benefits in the determination of damage awards.
Federal Activity
The U.S. 108th Congress recognizing the difficulty health care practitioners face in meeting the expenses of malpractice liability coverage, is considering legislation that would establish limits on medical malpractice claims.
H.R. 5
H.R. 5 states that there is no limit imposed for actual economic losses, which include medical costs and lost wages, but places a limit on additional noneconomic damages of $250,000. The measure also prohibits the discounting of an award for future noneconomic damages based on present value. In addition, the bill would allow state governments to increase or decrease the cap. Other provisions in the bill establish that the court will supervise the arrangements of payments of the damages, establish a collateral source rule and allow awards of punitive damages if otherwise permitted by state law. The bill may allow a defendant to present information concerning collateral source benefits in consideration of the amounts of damage awards. Other provisions in the act may set a statute of limitations for filing of a claim, notification of the defendant, limitations on attorney's fees and criteria for expert witnesses. The measure applies to lawsuits filed against physicians, HMOs, pharmaceutical companies and medical device companies. The legislation has passed the House; it is uncertain as to when the Senate will take up the measure.
Excerpt from a full Issue Brief on medical malpractice-tort reform and may not be reproduced without the express permission of the Health Policy Tracking Service. © April 2003.
Additional information on this issue can be found in the biweekly Health Care Providers Snapshot published by NCSL's Health Policy Tracking Service (HPTS). HPTS services and publications are available to state legislators and their staff at www.hpts.org. Please contact Laura.Miller@ncsl.org if you have forgotten your state legislature's username and password.
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