Physicians seek gains in state liability reforms

Doctors aren't waiting for federal relief, but are working with legislators to defend caps on noneconomic damages and secure other state-level tort reforms.

By Amy Lynn Sorrel — Posted March 15, 2010

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The lack of comprehensive tort reform in national health system overhaul legislation has physicians turning to state lawmakers for relief from medical liability pressures.

At the same time, physicians are fighting to protect state initiatives they consider critical to maintaining a balanced legal system and ensuring access to care.

Whether seeking new tort reforms or protecting existing ones, these legislative battles are being waged with resistance from trial attorneys, who contend that the measures threaten patients' legal rights. The American Medical Association has tracked medical liability-related bills in more than 30 states so far in 2010.

These legislative initiatives follow several victories for doctors in 2009, when Oklahoma physicians won a comprehensive tort reform package that included a $400,000 cap on noneconomic damages. Physicians in Nevada and Colorado defeated attempts to raise their state's respective award limits.

This year, damage caps remain the most closely watched issue.

In Utah, a bill would freeze the state's noneconomic damage cap at $450,000 and remove annual inflation adjustments that put the current cap at $480,000. The measure, pending in the state Senate in March, was considered a compromise between physicians and the state trial bar after an initial bill proposed reducing the cap to its original $250,000 level set in 2001.

A stable cap would help control liability costs and stave off a worsening physician shortfall in the largely rural state, said Mark Fotheringham, Utah Medical Assn. spokesman.

"It's hard enough to get doctors to practice in rural areas, so we're trying to create a more favorable environment so the shortage we're experiencing doesn't get worse," he said. "The conversation here is, we don't want to wait for the federal government. We are moving ahead on our own."

Maryland physicians are fighting a bill introduced in February that would raise the state's noneconomic damage cap from $680,000 to $740,000 and add inflation adjustments -- a move doctors say could bring back the large spikes in insurance rates they saw before the award limit was passed in 2004. The measure, backed by the state trial bar, also could result in damages in wrongful death actions with multiple plaintiffs to reach beyond $1 million.

"We've returned to some stability, and we're doing everything we can to protect it," said Gene M. Ransom III, CEO of MedChi, the Maryland State Medical Society. "That's an argument showing tort reform works ... and the fact it's been taken off the table [at the federal level] is frustrating. So more and more of these issues are going to be fought at the state level, making it even more important."

Trial lawyers are adamant about changing laws they say deny fair compensation to injured patients.

"Patients with legitimate claims have already been injured once. They should not be injured twice," said Wayne M. Willoughby, immediate past president of the Maryland Assn. for Justice, one of several similarly named state organizations representing trial lawyers. The MAJ supports increasing the state cap.

Alternative measures

Physicians are also looking beyond caps to other solutions to help curb unnecessary litigation:

  • A separate Maryland bill heard in the Senate in February would make it easier for physicians to apologize to patients without permitting the use of such statements against them in court.
  • Utah's proposal would require plaintiff attorneys to file an affidavit from an expert certifying a case's merit if they wish to pursue a lawsuit that a screening panel has determined has no basis.
  • In Arizona, which has no damage cap, physicians are backing a bill that would require stronger expert witness opinions be validated before they could be deemed admissible in medical liability and other civil cases. The measure passed the Senate in March.

"It's an issue of fairness, and we want to make sure the jury has the best available information on which to base a decision," said David Landrith, Arizona Medical Assn. vice president of policy and political affairs.

The Arizona Assn. for Justice and the Utah Assn. for Justice did not respond to calls by this article's deadline.

The widespread state activity is indicative of the ongoing stress that medical liability pressures place on not just individual physicians but also the overall health care system, said AMA President J. James Rohack, MD.

The AMA continues to support state liability reform efforts. "But that doesn't take our eye off the ball. We still need federal initiatives" given the uncertainties in states' ability to pass and retain tort reform, he said.

While caps remain the preferred approach, the AMA also supports testing alternatives -- something the Obama administration, while eschewing caps, has shown some interest in funding through demonstration projects. The latest health reform proposals suggest possible expansions of the pilot programs but do not include traditional tort reform.

In the absence of federal relief, "states continue to innovate ... but we also know that there continues to be nibbling away" at those efforts, Dr. Rohack said.

Chipping away

Washington physicians said they are fighting a potential expansion of liability under the state's wrongful death statute.

A bill awaiting a House vote in March after receiving Senate approval would allow parents to bring more claims and recover additional noneconomic damages for a grown child's death. A statement by the Washington State Assn. for Justice said the changes create added accountability.

But current law already provides recourse, and with no state damage cap, the measure likely would drive up liability costs, said Tim Layton, director of legal affairs for the Washington State Medical Assn.

Elsewhere, court battles threatening to erode tort reforms are fueling legislative action.

A case pending before the Kansas Supreme Court could eliminate the state's $250,000 noneconomic damage cap in all liability actions, including medical liability cases. If that happens, the Kansas Medical Society is prepared to seek a ballot initiative for a constitutional amendment that would guarantee the Legislature's authority to enact future tort reform.

"The Legislature very carefully balanced the interests of individuals to have a remedy for their injuries with the need for society as a whole to have access to necessary medical services. And that's a balance the Legislature takes very seriously," said KMS spokeswoman Allison Peterson.

The Kansas Assn. for Justice did not respond to interview requests by this article's deadline.

In February, the Illinois Supreme Court struck down a $500,000 limit on awards against physicians. The Illinois State Medical Society is reviewing potential legislative responses to the ruling.

State trial lawyers are backing a bill aimed at restoring insurance industry reforms they say were responsible for improving liability rates.

Illinois State Sen. David Luechtefeld (R) is pushing for a constitutional amendment to revive the award cap. He does not expect it to get much traction this year but hopes to call attention to the issue.

"You have to try to make a difference and that's what we think we did with the [cap]. Insurance rates went down, and it had a good effect for many areas of the state that were losing doctors," he said. "It was eventually overturned, but that doesn't mean you say, 'I give.' "

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More doctors practice defensively, polls say

Defensive medicine practices among physicians are not only prevalent but are costly to the health care system, according to two recent surveys.

Seventy-three percent of doctors surveyed in a Gallup poll released in February said that in the previous year they had practiced some form of defensive medicine, such as ordering additional tests or referrals to safeguard against potential liability. Respondents on average attributed 26% of overall health care costs to defensive medicine practices.

The results were based on telephone interviews with 462 physicians across the country in December 2009 and January. The survey was a collaboration between Gallup and Jackson Healthcare, an Atlanta-based health care management company.

The findings coincide with those of a separate online survey, also from February. Jackson Healthcare found that 92% of physicians -- most in emergency medicine, ob-gyn or primary care specialties -- reported practicing defensive medicine. Participants on average estimated that 34% of overall health care costs could be traced to defensive medicine, according to more than 3,000 online interviews in December 2009.

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