Tort reforms boost some states' liability outlook

State tort reforms that have helped level off insurance premiums and reduce lawsuit filings has led the American Medical Association to declare that several states have improved liability climates at the start of 2007.

In 2002, the AMA started categorizing how states' physicians were faring in an often unstable medical liability climate. The recent changes reduce the number of states in crisis to 17, down from 21 in 2006.

The Association upgraded Arkansas, Georgia, Mississippi and West Virginia to a more moderate liability environment. Before passing reforms, those states had been listed as being in crisis because unaffordable insurance premiums were forcing physicians to retire early, give up high-risk procedures or leave the state.

"We're encouraged that some states have seen improvements in their medical liability climates, yet medical liability premiums are still sky-high in many parts of the country," said AMA President William G. Plested III, MD. "The AMA, along with state and specialty societies, will continue to work hard to enact meaningful reforms at both the state and federal levels so that when patients need care, physicians are there to provide it."

Doctors caution that some legislative changes have yet to take hold, and others face legal threats, preventing significant decreases in premiums. For example, Georgia doctors anticipate a challenge to the constitutionality of the $350,000 noneconomic damage cap passed in 2005, which includes a $1.05 million ceiling.

"Some insurers have expanded business, and others are entering the market," said Donald Palmisano Jr., general counsel to the Medical Assn. of Georgia. "But we are waiting to see when the challenge comes, and it eventually will."

Meanwhile, Arkansas' 2003 affidavit-of-merit requirement to file a medical liability case has helped cut lawsuit filings by nearly half, according to Arkansas Medical Society Executive Vice President David Wroten. But the measure is mired in the state Supreme Court, with doctors and insurers awaiting a decision on its validity, he said.

The AMA also declared eight states as stable, adding Idaho and Texas to the list. Many doctors in those states have seen premium cuts or refunds, and an influx of specialists.

In 2003, Texas voters approved a constitutional amendment for a $250,000 noneconomic damages limit. The same year, Idaho lawmakers lowered the state's noneconomic cap from $650,000 to $250,000 in wrongful death and personal injury cases.