Fighting to protect tort reform laws

The AMA will continue its efforts, even though a damages cap was struck down in Illinois and similar reforms are in peril in three more states.

Posted March 1, 2010.

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The movement to enact and preserve effective medical liability caps suffered a high-profile loss when the Illinois Supreme Court ruled that the state's noneconomic damage cap was unconstitutional. Justices on Feb. 4 said the 2005 law limiting damages to $500,000 for physicians and $1 million for hospitals violated the separation of powers between the Legislature and the judiciary.

The Litigation Center of the American Medical Association and State Medical Societies and the Illinois State Medical Society jointly had filed a friend-of-the-court brief, urging the court to uphold the cap.

History suggests that it was an especially uphill battle -- the state high court's decision marked the third time in about 30 years that Illinois justices have tossed out damage caps in medical liability and other personal injury cases based on constitutional grounds.

When the court ruled, the Illinois medical society said it was a huge blow, because the law expanded patient access to care and helped curb frivolous lawsuits.

The AMA said the decision threatened to undo everything that patients and doctors in Illinois got under the cap, including increased competition among medical liability insurers, lower medical liability premium rates and greater access to care.

Those are the kinds of improvements the AMA and others have seen because of caps, and those are the types of strides worth fighting for.

The AMA has been a long-time supporter of caps and other alternatives to the liability crisis. As recently as November 2009, when the AMA House of Delegates reaffirmed the Association's commitment to health system reform, it declared that such reform should include medical liability measures to reduce defensive medicine and eliminate unnecessary litigation.

The AMA has urged Congress to enact reforms, including a $250,000 cap on noneconomic damages, and to provide funding for state-based pilot programs to develop alternative reforms such as health courts, administrative determination of compensation and safe harbors for the practice of evidence-based medicine. The Litigation Center is working with states to preserve liability caps.

While one state, Illinois, brought disappointing news about caps, the successful experience in another state, Texas, points to why they are necessary. There, voters in 2003 approved a state constitutional amendment limiting noneconomic damages to $250,000 for physicians. Since then, the Texas cap has been praised for improving access to care for patients, boosting the ranks of physicians and cutting liability insurance premiums.

There is other evidence, including an October 2009 report by the nonpartisan Congressional Budget Office estimating that tort reforms, primarily damage caps, would save federal health care programs $41 billion over 10 years by curbing defensive medicine. And in February 2008, the AMA released an analysis of independent research showing that caps reduced insurers' claim payouts, leading to lower premium rates for physicians. The research said liability pressure on physicians leads to a decrease in physician supply, meaning fewer doctors to treat patients in some areas.

The sound reasons for caps have made at least some impression in many states.

Laws in about 30 states limit damages in medical liability cases, although the measures differ in the amount and type of damages covered by a cap. But for all those encouraging numbers about liability reform, there is another number that raises serious immediate concerns: three.

That's the number of states where constitutional challenges are before state supreme courts -- Georgia, Missouri and Kansas. A $350,000 noneconomic damage cap in medical liability cases is at stake in Georgia and Missouri. In Kansas, the state's high court will rule on the $250,000 noneconomic damage cap in all personal injury cases, including medical liability actions.

Promoting liability reform requires defending it as well. And while the Illinois ruling is a setback, the AMA and others are fighting to ensure that existing caps survive and that other reforms are embraced to fix a broken medical liability system.

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