Lexington Herald Leader (Kentucky)
FRANKFORT — A House committee yesterday took testimony but did not vote on a controversial Senate bill that seeks a constitutional amendment to allow caps on jury awards in medical malpractice cases.
The measure generated some sharp questioning and is expected to face rough going in the Democrat-controlled House, which has its own plan for dealing with malpractice issues.
Rep. Adrian Arnold, a Mount Sterling Democrat and chairman of the House Elections, Constitutional Amendments and Intergovernmental Affairs Committee, said after the meeting that he would “be willing to hear a vote” on the Senate bill, SB1, but first wants to “see what the mood of the House is.”
The bill aimed at lawsuits is the Republican-led Senate’s approach to curbing doctors’ and hospitals’ rising malpractice insurance rates. Democrats and Republicans alike say the increases are driving doctors — especially in specialties such as neurosurgery and obstetrics — from Kentucky.
The alternative House measure would address the problem by setting up a state-run company to sell malpractice insurance, among other changes.
Senate President David Williams, sponsor of the effort for the second year in a row to amend the constitution, had earlier suggested that each chamber should pass the other’s bill, even though he doesn’t think the House plan will work.
A Senate committee was scheduled to hear the House bill, HB 450, on Wednesday but postponed its session because the sponsor, Rep. Rob Wilkey, D-Scottsville, was out of town, Williams said.
So the House wound up going first, and in a nearly four-hour meeting, legislators finally heard from the insurance industry, which has been notably absent during this year’s debate.
Joel Whitcraft, senior vice president and actuary at GE Medical Protective, which covers nearly 5,000 Kentucky health care providers, told the committee that nationally, rising jury awards compounded by insurers’ falling investment yields are pushing up rates.
As investment income “shrinks, premiums have to go up to compensate,” he said.
He said Kentucky’s malpractice market has been “volatile” and “unpredictable” for years, and urged legislators to consider reforms similar to California’s Medical Injury Compensation Reform Act, or MICRA.
That law placed caps on non-economic damages, limited plaintiffs’ attorney fees and changed other aspects of medical litigation.
If Kentucky approved an amendment and capped damages, it would still be a while before premiums would be affected, Whitcraft said.
The Kentucky bill would put before voters a proposed constitutional amendment that would let the General Assembly limit jury awards for pain and suffering and punitive damages to no less than $250,000 in malpractice suits. It also would enable an alternative dispute-resolution system and other changes.
But the founder of the California-based Foundation for Taxpayer and Consumer Rights questioned whether damage caps have mattered in that state.
Harvey Rosenfield testified that a different bill, Proposition 103, and not MICRA, was responsible for stabilizing malpractice premiums in California. He presented a chart showing that premiums continued to rise after MICRA was enacted in 1975 and leveled off only after Proposition 103 was passed in 1988.
Proposition 103 required insurers to reduce their premiums by at least 20 percent, froze rates for a year and set up a system that gave the insurance commissioner more power to regulate rates.
Rosenfield predicted that, if Kentucky does nothing to address malpractice rates, they’ll stop rising on their own. The crisis “will be over in six months to a year,” he said.
But if lawmakers want to act, he urged them to “think first of regulating the insurance companies.”
Reach Karla Ward at (859) 231-3314; 1-800-950-6397, ext. 3314; or [email protected]