Health reform bills light on medical liability reform

Medical liability reform so far has been kept out of the health system reform bills pending before Congress. But as merged legislation makes its way to the Senate and House floors, physicians and other advocates continue to push for lawmakers to add provisions that they say would not only ease medical liability pressures on doctors but also reduce costs for the entire system.

A recent report by the Congressional Budget Office may give liability reform supporters a needed boost, but opposition from congressional Democrats and trial lawyers continues to intensify.

Outside of a mention that health system reform presents an opportunity to address medical liability issues, the legislation approved by the Senate Finance Committee on Oct. 13 did not include any formal measures. The statement was detailed in a nonbinding "Sense of the Senate" provision saying lawmakers should support states in their efforts to develop alternatives to the current litigation system, possibly through demonstration programs. In September, President Obama directed the Dept. of Health and Human Services to provide $25 million in grants for such tests.

The Senate Health, Education, Labor and Pensions Committee bill, designed to be merged with the Finance measure for floor consideration, does not address medical liability.

Congressional Democrats continue to rebuff attempts at instituting damage caps, which President Obama also opposes. About a dozen mostly Republican-offered amendments to the Senate Finance bill would have limited liability awards, attorneys fees and the use of expert witnesses, among other provisions. But the proposals did not see daylight, as they were either rejected or withdrawn before a panel vote.

Caps are likely a nonstarter without the 60 Senate votes necessary to cut off debate and get them passed, said Katie Orrico, vice chair of the Health Coalition on Liability and Access. The organization, of which the American Medical Association is a member, favors caps but is supportive of other liability alternatives.

"There are things Congress could do short of passing caps that would have some effect on liability costs and improving the system. But given that the Sense of the Senate has no force of law and doesn't do much to codify even what President Obama has put out there, this falls considerably short of what we believe needs to be included in any comprehensive health care reform that goes through," she said.

Of the three House bills designed to be merged for floor consideration, only one measure, approved by the House Energy and Commerce Committee in July, gave a nod to tort reform. It would allow for state-based experiments on liability alternatives and a certificate-of-merit process requiring an expert opinion to accompany the initial filing of a case.

The AMA is pushing to keep these medical liability provisions in the House bill as it proceeds. AMA Board of Trustees Chair Rebecca J. Patchin, MD, said caps may not be a political reality this year. But she called the federal grants "a significant step forward."

In an Oct. 2 letter to House Speaker Nancy Pelosi (D, Calif.), AMA Executive Vice President Michael D. Maves, MD, MBA, urged lawmakers to clarify the language in the Energy and Commerce version. Organized medicine wants to ensure that the federal incentive program gives states flexibility to explore a range of reforms, including health courts, early disclosure and compensation programs, expert witness qualification, and protections for use of evidence-based guidelines. Some of those measures were stripped from the original language. Physicians also want assurances that existing state reforms would remain protected, Dr. Maves stated.

CBO report buoys tort reform

The CBO report, released Oct. 9, could reinvigorate the debate somewhat.

The independent economic oversight agency concluded that tort reforms, primarily damage caps, would save the government an estimated $54 billion over 10 years and cut national health care spending by a half percent annually by reducing liability insurance and defensive medicine costs. That would include savings to federal health care programs of $41 billion over the next decade by curbing unnecessary services driven by litigation fears.

The report has given new ammunition to Republicans who are likely to press for medical liability amendments on the Senate and House floors.

"That's not chump change," said Sen. Charles Grassley (R, Iowa), the ranking GOP member of the Senate Finance Committee. "Cutting medical liability costs would help preserve patients' access to care. It makes no sense that congressional Democrats have taken malpractice reform off the table."

Sen. Orrin Hatch (R, Utah) requested the analysis by the CBO, whose prior studies focused solely on the direct impact of tort reform on cutting liability insurance expenses.

The CBO analysis is a "powerful indicator" of the value of tort reform, said Lawrence E. Smarr, president and CEO of the Physician Insurers Assn. of America, a national trade group of doctor-owned or operated medical liability companies. But he acknowledged that trial lawyers also are a force that so far has managed to stymie such efforts. "That doesn't mean we are going to stop working for it."

The American Assn. for Justice, a national group of trial lawyers, derided the CBO projections as meager savings in exchange for risking patients' rights.

"Patients shouldn't have to give up the right to go to court in order to have health care," said Susan Steinman, the AAJ's director of policy. "The proposals in the CBO report are the same sorts of tort reform that Congress, and in particular the Senate, have rejected before" under the Bush administration, she said.

Instead, efforts should be focused on reducing medical errors, Steinman said, and the demonstration projects approved by the Obama administration hold some promise in that regard. But 46 states already have enacted various tort reforms, some of which have been struck down as unconstitutional.

"Congress should not be enacting proposals that limit the right to a jury trial, nor should Congress be mandating what states do with their courts," she said.