Despite then Senator Barack Obama’s support for medical malpractice reform in 2006, when he co-authored an article for the New England Journal of Medicine with Hillary Clinton highlighting its importance, the healthcare reform bill that we ended up with does little to nothing to address malpractice reform. On one hand, that is frustrating to many of us in the healthcare industry who want to see stronger protections for doctors, and a more equitable system for addressing malpractice costs. On the other hand, though, passage of the ACA has seemingly spurred some states toward pursuing their own malpractice reforms, whether because of incentives in the ACA itself, or just because it is now clear that for the time being malpractice reform is a state issue.
That said, there is at least one buzzworthy story at the federal level when it comes to malpractice reform. On February 27th, Reps. Andy Barr (R-KY) and Ami Bera (D-CA) introduced a bipartisan bill, H.R. 4106, or the Saving Lives, Saving Costs Act, in the House that would introduce a safe harbor model for Medicare and Medicaid providers. Under the provisions of the bill standards of care would be developed by a panel of experts, and doctors, by documented adherence to these standards, could shield themselves from liability. The bill was referred to the Energy and Commerce Committee and the Judiciary Committee for consideration. While we expressed some reservations about a safe harbor system in a recent post, at least as a magic bullet solution to the problem of defensive medicine, it will be interesting to see if this bill gets any traction and, if so, how it performs. You can read more about the bill here.
At the state level, Missouri has been making headlines as it considers re-implementing a $350,000 cap on non-economic damages. Re-implementing, that is, because from 2005 to 2012 Missouri had such a cap in place. In July of that year the Missouri Supreme Court issued a decision stating that the cap was unconstitutional. The new bill, H.B. 1173, introduced by Rep. Eric Burlison, (R-Springfield), which is thought by supporters to be drafted in such a way that it could withstand a court challenge, passed the Missouri House by a vote of 94-61 on March 5, and is now being considered by the Senate. While supporters think they have the votes to pass the bill through the Senate many fear that Gov. Jay Nixon (D) will veto it, and the likelihood of getting the super-majority to override a veto is slim. Opponents of the bill see it as violating citizens’ rights to a trial by jury, whereas proponents point out that reasonable limits on rights are commonplace, and almost no right is fully unconditional. Further, they argue that such a provision prevents frivolous lawsuits, and keeps healthcare costs under control. They can also point to the fact that the period during which the cap was in place was one of unprecedented stability and healthy competition in the Missouri malpractice insurance market.
Meanwhile, as Missouri legislators consider re-introducing a non-economic damages cap, Californians are considering raising the cap in that state. California has had a cap of $250,000 on non-economic damages in place since 1975. For years, trial lawyers have opposed this law, and argued that even if there is to be a cap, it needs to be raised given inflation. But in recent years, the lawyers have been joined in their push by consumer advocacy groups who also see the cap as far too low. These forces have teamed up to raise a good deal of money, and are seeking at least 504,000 petition signatures by March 24th to get an initiative on the ballot that would raise the cap to approximately $1.1M. The proposed initiative would also index the cap to the inflation rate going forward, and provide some new requirements for drug and alcohol testing of physicians.
Backers of the initiative may get what they want even if they don’t get the necessary number of signatures, as Senate President Pro Tempore Darrell Steinberg (D-Sacramento) has already announced that he is considering introducing legislation that would accomplish the same goals in the Senate. While those pointing to the fact that what they are looking for is simply an adjustment to keep up with the rate of inflation may seem to have a good point, there can be little doubt that raising the caps by nearly 450% overnight will introduce serious turbulence into the world of medical malpractice and malpractice insurance for California physicians.
In contrast to the substantial hike in caps being considered in California, the Kansas Medical Society is supporting legislation presumably meant to preempt such drastic measures. Two years ago the Kansas Supreme Court upheld Kansas’ $250,00 cap, but made clear that while the caps were constitutional, the figure of $250,000 was, in their estimation, very low. So, rather than await another challenge, one in which the court might reverse their decision, especially if they noted indifference from the KMS, they are backing legislation that recently passed the KS Senate raising the cap slightly to $350,000 over the next seven years. That’s the kind of change that the malpractice industry and the malpractice insurance market can much more easily absorb without de-stabilization. It’s an increase that is both measured and incrementally applied.
In Wisconsin, physicians’ advocacy groups are pleased with a reform bill that passed through the Wisconsin State Congress late in 2013. The bill, A.B. 139, accomplishes two objectives. First, it clarifies what informed consent means in Wisconsin, providing a “reasonable physician” standard rather than a “reasonable patient” standard, as had previously been the understanding of the court. Under this clarification, what is required is that a doctor provides a patient with any information a “reasonable physician in the same or a similar medical specialty would know and disclose under the circumstances.” This is in contrast to a standard that requires a physician to provide all “information necessary for a reasonable person in the patient’s position to make an intelligent decision with respect to the choices of treatment.” This clarification gives a more easily assessable scope to what a doctor should disclose. The bill further provides that physicians are not required to disclose information about treatment options for diagnoses they do not believe a patient to have. This may seem like common sense, but a recent case has shown it to be a necessary clarification.
A case in West Virginia against a nursing home has raised the question of exactly what non-economic damage caps for medical negligence cover. A jury awarded the plaintiff over $90M and while the plaintiff’s attorneys have appealed the decision to the Supreme Court on the grounds that their liability should be limited by the state’s $500,000 non-economic damages cap for medical negligence, the defense maintains, as did the lower court, that the failure to provide basic care including providing food and water is not a case of medical negligence but of simple corporate negligence, and thus not subject to the cap.
Finally, in a roundup of recent notable jury awards, we see that despite tort reform efforts in many states, very large awards are still being handed out by juries on a regular basis. Just over the course of the last few weeks a Suffolk County, MA jury awarded a plaintiff $4.8M, a Jefferson County, AL jury awarded a plaintiff $7.5M, the Alabama Supreme Court upheld a $3.2M verdict, while a Fulton County, GA court has added $1.5M to an initial $3M award, and a jury in Lynchburg reached a verdict finding in favor of the plaintiff to the tune of $5.6M. As mentioned, these are just notable cases from the last few weeks, demonstrating that those who believe that there should be some kind of objective cap on non-economic damages no matter where you are have a ways to go.
This post was written by Justin Donathan.
Justin at Google+