Malpractice Reform Takes a Hit

Published May 1, 2003

While the war in Iraq has distracted Congress from medical malpractice reform, it appears legislators remain focused on Medicare reform and the creation of a workable prescription drug benefit program for seniors.

A spokesperson for the House Ways and Means Committee said despite the war Congress will continue to work on domestic priorities–especially “taxes and Medicare.” Rep. Rob Portman (R-Ohio) said the GOP would “absolutely” carry on with its domestic agenda, adding, “We’ll continue to work on growing the economy, modernizing Medicare, and providing a prescription drug benefit.”

At the same time, CongressDaily/AM reports malpractice reform legislation has been “bumped … off the schedule in the near term.” That is cause for concern for the American Medical Association, whose president-elect, Dr. Donald Palmisano, says lawmakers must pass malpractice reform for “the good of patients and doctors alike.”

The AMA supports legislation (HR 5) passed by the House in March capping punitive damages at $250,000 or twice the amount of economic damages, whichever is higher. In addition, the bill would allow state governments to increase or decrease the cap; no limit would be set for economic awards, which include medical costs and lost wages.

Palmisano said without a cap on medical malpractice awards, malpractice insurance premiums will continue to rise, and doctors will stop working because they cannot afford to pay those premiums.

“You can keep the present system, which has unlimited awards, and end up with citizens who no longer have a doctor to see,” Palmisano said. “We think the present system is broken. We think the present system decreases quality. We think the present system denies access to care. If we don’t get this passed, the meltdown is going to continue.”

Support Gap

Senator Dianne Feinstein (D-California) said she will no longer support a bill capping jury awards for non-economic damages in medical malpractice suits at $500,000–twice the amount called for in HR 5–after the American Medical Association and California Medical Association (CMA) expressed opposition to the measure.

“There is no way I am going to introduce legislation that is going to be fought by my own doctors, who I am trying to help,” she said. The bill was intended as a compromise to garner Democratic support.

The Senate measure also would allow awards of at least $2 million for malpractice cases resulting in disfigurement or physical disability and would not limit lawsuits against managed care plans or prescription drug companies.

According to research cited by Palmisano, a $500,000 cap would not reduce malpractice insurance rates. “[W]e do not want to give support if it turns out to be something that will not do any good,” he said.

Although the compromise measure would not override state laws already in place, Jack Lewin, chief executive of the CMA, said it “puts pressure on California to change a very good piece of public policy.” He added Feinstein is “right in holding back right now.” California law caps non-economic damages at $250,000.

Feinstein’s withdrawal of support could be a direct hit on both the Bush administration and Republican leaders who repeatedly say they saw an opportunity to bring about reform this year.

Senate Majority Leader Bill Frist (R-Tennessee) said he plans to continue negotiations with Feinstein to reach an agreement on a bill physicians’ groups would support. “I told the AMA we’ve got to develop a bipartisan bill, a bill acceptable to senators on both sides of the aisle, and they should make a decision as to what to support.”

Stepping Up

Senate Judiciary Committee Chairman Orrin Hatch (R-Utah) and Judd Gregg (R-New Hampshire), chairman of the Senate Health, Education, Labor and Pensions Committee, blamed rising jury verdicts for increased malpractice insurance premiums. Hatch dismissed claims from consumer and trial lawyer groups that recent spikes in malpractice premiums are more the result of lower investment returns in the weak economy.

“The real fault,” said Hatch, “lies in the fact that we haven’t handled this problem very well.”

Hatch and Gregg reported their committees would hold a joint hearing on the issue, although they did not say when. Hatch also said the Senate would likely take the House bill as a starting point.

Damage caps have not proved popular in the Senate, and Hatch indicated he is willing to compromise on this polarizing issue. “The problem is if you set a cap on the amount juries can award,” Hatch explained, “jurors will go to the [cap] and it will become a floor.” He added, “Jurors don’t realize they pay the cost of high verdicts when insurance companies raise premiums for doctors who then stop practicing.”

Conrad F. Meier is managing editor of Health Care News. His email address is [email protected].