Wisconsin opens door to liability crisis

The state now has to fight to regain the noneconomic damages cap that kept the state out of crisis.

Posted Oct. 17, 2005.

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Some physicians in states recently ravaged by soaring medical liability insurance rates have been picking up and moving their practices to Wisconsin, a safe haven for two decades as a state with caps on noneconomic damages awarded in malpractice lawsuits. At least it was -- until two months ago, when the Wisconsin Supreme Court stripped the state's doctors of that protection.

In a 4-3 decision, the court said it didn't see a connection between the adjustable cap -- which stood at $445,775 at the time of the ruling -- and the legislative intent of "compensating victims of medical malpractice fairly." But a fair law would ensure that plaintiffs aren't paid too little and doctors don't pay too much. Without caps, though, the system goes off kilter, with plaintiffs' lawyers aiming to lead juries to return irrationally large verdicts.

And the majority of justices said they didn't see a specific connection between the cap and the idea that it keeps liability insurance premiums low.

They didn't see a connection? The AMA lists 20 states in the midst of a medical liability insurance crisis, with rates that have doctors retiring early, discontinuing high-risk procedures or fleeing to another state with a better insurance climate. Only six states make the AMA's "OK" list. The thing those states have -- or should we say had -- in common was a cap on noneconomic damages.

Wisconsin has been "OK" since the list's inception in June 2002. The question now is whether it can remain OK.

It can. But lawmakers at the state and federal level need to act quickly. They need to pass noneconomic damages caps.

At the state level, doctors and some politicians are doing their part to bring back the cap.

The Wisconsin Medical Society created a Web site (link) that informs residents what could happen if the state goes without a cap for too long. In addition, State Assembly Speaker John Gard formed a task force to study the issue. Already citizens are behind the cap, with a medical society and Wisconsin Hospital Assn. poll showing that 66% of 500 likely Wisconsin voters agreed that the state should cap noneconomic damages "to prevent both higher health care costs associated with frivolous lawsuits and unnecessary medical testing."

Legislation is expected to pass the Republican-dominated Legislature by Thanksgiving. But it is unclear whether the state's governor, a Democrat, would sign a bill. If he does, doctors want to prevent the court from tossing out the cap again, so WMS is pursuing a constitutional amendment that would deem the cap legal.

Of course, if Congress would pass national tort reform, it would stop this state patchwork of laws that are a determining factor of where some doctors set up practice. The House repeatedly has passed legislation with a $250,000 noneconomic damages cap, most recently approving a bill in July. But proposals have stalled in the Senate again and again, and it looks like the latest effort is going nowhere again this year.

Insurance rates didn't go up in Wisconsin overnight. But settlements are already up.

There's one report of a plaintiff lawyer who had reached a settlement agreement a week before the state Supreme Court decision now calling the defendants back and saying he would settle only if the agreed-on amount was doubled. Also, those seeking to recruit doctors already are reporting that they're getting questions from physicians concerned about what insurance rates will do in the coming years without caps.

Before Wisconsin becomes the liability wasteland that 20 other states are, it's time for the state government again to pass tort reform that includes a cap that will be held constitutional and keep Wisconsin as a place physicians can go for shelter from high medical liability premiums.

Better yet, Congress should pass tort reform so doctors can practice where they want, not just where the insurance rates are affordable because a state has a noneconomic damages cap.

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