To cap or not to cap;

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Medical community lobbies for limits on noneconomic damages

Modern Healthcare

As federal lawmakers consider enacting wholesale changes in tort laws, the medical community is building grass-roots momentum behind a lobbying effort for state-enforced limits on noneconomic damages in malpractice lawsuits.

Earlier this month, just two days before the House of Representatives approved a measure that would place a $250,000 cap on damages in malpractice cases, West Virginia Gov. Bob Wise, a Democrat, signed a law that established the same limit on damages.

Uncertain that the federal legislation will win the votes it needs to pass the Senate, supporters of these damage caps-led by the American Medical Association-are hedging their bets through a well-orchestrated effort to win approval at the state level. For now, at least, those efforts appear to be paying off for the national doctors’ group, which has been working closely with

state affiliates at the same time it lobbies aggressively in Congress.

At least two more states are on the verge of joining West Virginia in the tort-reform parade. In Idaho, Gov. Dirk Kempthorne, a Republican, is expected to sign a law that sets a $250,000 cap on damages in personal injury and wrongful death cases.

A similar measure, approved last week by the Arkansas Legislature, is awaiting the expected signature of Republican Gov. Mike Huckabee. Caps on damages are also in the legislative pipeline in at least four other states: Florida, Missouri, Texas and Washington.

The new law in West Virginia follows similar measures approved over the last several months in Nevada and Mississippi, bringing the total number of states with some form of cap on noneconomic damages to about two dozen. Though only a few of those laws impose the strict limits included in California’s landmark 1975 Medical Injury Compensation Reform Act, which the AMA considers the gold standard, they represent a significant trend at a time when Congress is

wrestling with federal legislation, according to supporters.

”From a practical standpoint, it would be unrealistic to assume that Congress will pass tort-reform legislation,” said Sherman Joyce, president of the Washington-based American Tort Reform Association. ”I think there’s now as good a chance as there’s ever been, but to assume with a level of certainty that that will happen would be wrong.”

The House-passed federal tort-reform bill sets a $250,000 limit on noneconomic damages or pain and suffering. But that bill, which also would override state laws that allow patients to sue their HMOs, faces a far higher hurdle in the Senate, where 60 votes would be needed to overcome a possible filibuster.

A federal law would not supersede caps already in place, leaving considerable power for states to establish limits on damages.

The dual-track effort is a ”cynical,” back-door attempt to win support at any level for caps on damages that hurt victims of malpractice, said Jamie Court, executive director of the Santa Monica, Calif.-based Foundation for Taxpayer & Consumer Rights, a not-for-profit advocacy group.

”I think (supporters of changes in tort law) are clearly exploiting this as a crisis,” he said. ”I think it’s a really cynical attempt to inspire pity on the part of legislatures in the statehouses, where (lobbying) is much more likely to work.”

Last June, the AMA released a report saying that 12 states faced a medical malpractice ”crisis,” primarily because of high insurance costs for physicians. It recently added six more states to the list. The doctors’ group lists only six states that it says are in good shape-California, Colorado,

Indiana, Louisiana, New Mexico and Wisconsin, all of which have damage caps

ranging from $250,000 to $500,000.

The AMA‘s president-elect, Donald Palmisano, a New Orleans surgeon, said the doctors’ group is working ”on both levels” to enact new laws, taking the lead on the national level and backing up state medical societies.

Though Joyce said he believes that only federal legislation would help resolve concerns about malpractice premiums for doctors, he suggested the state efforts are having considerable impact. He acknowledged that doctors’ strikes in several states-including walkouts in Nevada and West Virginia that quickly resulted in new tort laws-have helped turn the tide.

”I think they’ve had the effect of demonstrating that this isn’t just an academic problem,” Joyce said. ”But rather, it’s a problem that affectseverybody-it’s really an access to healthcare crisis.”

Opponents of these changes say caps on damages will not appreciably reduce malpractice insurance premiums for doctors. They say that California’s insurance reform law of 1988-and not MICRA-has helped keep rates at about half the national average in that state. That reform measure rolled back some rates, including premiums for doctors, froze others and forced insurance companies to justify rate increases before an elected insurance commissioner, Court said.

One recent study, conducted by the New York-based Center for Justice & Democracy, found that tort laws enacted since the last medical liability ”crisis” in the mid-1980s have not lowered insurance rates.

Officials with the consumer advocacy group said states with little or no tort restrictions have experienced the same insurance rates as those states with tough caps over a period stretching from 1985 to 1998. ”Tort reforms do not produce lower insurance costs or rates,” the report said.

Joanne Doroshow, executive director of the not-for-profit organization, condemned the measures aimed at changing tort laws, saying the bills erode patients’ rights and leave ”malpracticing hospitals, HMOs, nursing homes, doctors and even pharmaceutical companies off the hook for injuring patients, while doing nothing to control insurance rates for doctors.”

Consumer Watchdog
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