Medical liability reform demo may be in limbo

Funding for a second round of state grants has not been approved by Congress, and GOP lawmakers question President Obama's support for alternative liability solutions.

By Doug Trapp — Posted July 25, 2011

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The future of a national health system reform law program to explore alternatives to the medical liability system is up in the air.

Efforts to advance medical liability reform at the state level continue through a similar $25 million federal grant program begun in 2009, but the potential is high for a legislative stalemate between the divided Congress and President Obama on the additional $50 million program authorized by the health system overhaul.

The health reform law authorized the Health and Human Services secretary to provide demonstration grants to states to explore the "development, implementation and evaluation of alternatives to current tort litigation for resolving disputes over injuries allegedly caused by health care providers or health care organizations." However, lawmakers must approve appropriations for the grants.

The level of congressional support for the program is unclear. In recent weeks, much of Congress' energy has been spent looking for spending cuts as part of a deal to expand the nation's $14.3 trillion statutory debt limit. It's too early to say what might end up in the congressional appropriations bill for HHS, said Chris Gallegos, spokesman for Sen. Thad Cochran (R, Miss.), the highest-ranking Republican on the Senate Appropriations Committee.

Although Obama did not call for funding specifically for the demonstration program, his fiscal 2012 budget request includes $100 million for states to reform the way they handle medical liability disputes. Obama has acknowledged that physician concerns about lawsuits may encourage doctors to order more tests and care than is medically necessary. An administrative official said the president "wants to work with Republicans to bring down costs in the health system and improve the quality and safety of care."

But some House GOP members charge that White House officials are more talk than action on medical liability reform. "I don't think they're serious," said Rep. Michael Burgess, MD (R, Texas). "It's a fairly small sum of money in a bill that is well over a trillion dollars." A House GOP aide echoed Dr. Burgess, saying that "it sounds great, but there's no action behind it."

House Republicans including Dr. Burgess have lined up behind a measure that is based in part on liability reforms adopted by Texas and California. The Help Efficient, Accessible, Low-cost, Timely Healthcare Act, or HEALTH Act, sponsored by Rep. Phil Gingrey, MD (R, Ga.), would enact a nationwide cap of $250,000 on noneconomic damage awards, among other system changes. Dr. Burgess, Dr. Gingrey and other GOP lawmakers say limiting damage awards has allowed physicians to practice medicine with greatly reduced liability insurance premiums compared with physicians in states without similar measures.

The American Medical Association supports the HEALTH Act, but Obama has said he will not approve capping damage awards. Two House committees have approved the bill, which next would receive a vote by the full House.

Instead, Obama has backed programs to find alternatives to limiting damage awards. In September 2009, the White House authorized the HHS secretary to provide up to $25 million in grants to support the implementation and evaluation of evidence-based patient safety and medical liability projects. The Agency for Healthcare Research and Quality awarded $19.7 million worth of the grants to seven recipients in June 2010.

One AHRQ grant is supporting a three-year effort at 10 Chicago-area hospitals to increase transparency and accountability of medical errors. The "seven pillars" approach calls on physicians and hospitals to look inward and address system flaws that lead to medical errors while acknowledging mistakes to injured patients. The grant is supporting a study of the impact of such an approach on patient safety and medical liability.

The seven pillars approach is the opposite of the "deny and defend" stance taken by most health care professionals in response to medical errors, said Timothy McDonald, MD, chief safety and risk officer for health affairs at the University of Illinois. "Our position is the best way to deal with medical liability is to prevent the events in the first place."

Dr. McDonald said there is no evidence that capping damage awards will improve patient safety, although it may reduce spending for certain people. "They're saying it works in Texas and California, but for who?"

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