Medical Malpractice News | Insurance
Reform News
Insurance Rates Won't Be Reduced By Limiting Rights and Harming
Patients
While some doctors may be facing large price hikes for medical malpractice
insurance, so-called "tort reform" is not the answer. Nothing
in the so-called Health Act of 2005 (H.R. 5) would decrease
premium costs or increase the availability of medical malpractice
insurance.
California, which limited non-economic damages in medical malpractice
cases to $250,000 as long ago as 1976, did not see a reduction in
premium rates until after the enactment of Proposition 103, a ballot
initiative that rolled back rates and provided antitrust enforcement
of price-fixing and other anti-competitive insurance practices. In
fact, states with caps on damages have average insurance premiums
that are 9.8% higher than insurance premiums in states without caps
on damages.
Even the American Insurance
Association (AIA), a major insurance industry trade group, says lawmakers
who enact "tort reform" should not expect insurance rates
to drop. Severe limitations on medical malpractice remedies only
hurt those patients with debilitating injuries while doing nothing
to lower insurance rates.
H.R. 5, the so-called Help Efficient, Accessible, Low Cost, Timely
Health Care (HEALTH) Act of 2005, would severely limit the ability
of patients and other health care consumers to hold health care and
medical products providers accountable. Members of Congress should
not cosponsor this legislation and should oppose these provisions
on the House floor.
- Not just medical malpractice, but also product liability,
nursing home, and insurance claim reform. The bill applies
to medical malpractice, medical products, nursing homes and health
insurance claims. If the proponents were truly concerned about an
insurance crisis facing doctors, why does this bill cover product
liability claims against pharmaceutical and medical device manufacturers,
and civil actions against nursing homes, HMOs, and insurers?
- Reduced statute of limitations. The legislation
reduces the amount of time an injured patient has to file a lawsuit
to one year from the date the injury was discovered or should have
been discovered, but not later than three years after the "manifestation"
of injury. This statute of limitations, which is much more restrictive
than a majority of state laws, would cut off meritorious claims
involving diseases with long incubation periods. Thus, a person
who contracted HIV through a negligent transfusion but learned of
the disease more than five years after the transfusion would be
barred from filing a claim.
- An arbitrary and discriminatory $250,000 cap on non-economic
damages. The bill limits non-economic damages to $250,000
in the aggregate, regardless of the number of parties against whom
the action is brought. This cap is more restrictive than any state
cap. Non-economic damages compensate patients for very real injuries-such
as the loss of a limb or sight, the loss of mobility, the loss of
fertility, excruciating pain and permanent and severe disfigurement.
They also compensate for the loss of a child or a spouse. These
are very real damages, and juries are able to calculate them fairly.
Caps on non-economic damages disproportionately affect women, children,
the elderly, the disabled, and others who may not have substantial
economic loss (i.e., lost wages or salary).
- Elimination of joint liability for economic and non-economic
damages. The bill completely eliminates joint liability,
thereby upending the law in many states. Under joint liability,
injured patients are compensated fully for their loss. Joint liability
enables an individual to bring one lawsuit against the entities
responsible for practicing unsafe medicine or manufacturing a dangerous,
defective product and have the defendants apportion fault among
themselves, if the jury finds for the plaintiff. Our civil justice
system has determined that it is the injured patient-not multiple
negligent medical providers-who deserves the greatest measure of
protection.
- Severe restrictions on contingent fees. The bill
gives the court power to restrict plaintiff's attorney fees regardless
of whether recovery is by judgment, settlement, or any form of alternative
dispute resolution. The bill specifies that contingent fees, regardless
of the number of plaintiffs, may not exceed:
- 40% of the first $50,000 recovered;
- 33 1/3 % of the next $50,000 recovered;
- 25% of the next $500,000 recovered; and
- 15% of any recovery in excess of $600,000.
It is unfair to restrict plaintiff's attorney fees when defendants
have no such restrictions. Under the contingent fee system, lawyers
are paid only if they are successful, giving plaintiffs' attorneys
have a built-in incentive to accept the most meritorious cases.
- Allows evidence of collateral source benefits. H.R.
5 gives defendants in medical malpractice and medical product
liability cases an absolute right to introduce evidence of "collateral
source" benefits. While the plaintiff can then introduce evidence
of amounts paid to secure that benefit, this rule allows the wrongdoer
to profit from the plaintiff's prudent investment in insurance.
If doctors want evidence of the injured patient's collateral sources
admitted at trial, then the extent of the doctor's own liability
insurance should also be admissible.
- Severe restrictions on punitive damages. The bill
provides that punitive damages may only be awarded if the plaintiff
proves by an impossibly heightened standard of "clear and convincing"
evidence that (1) the defendant acted with malicious intent to injure
the plaintiff or (2) the defendant understood the plaintiff was
substantially certain to suffer unnecessary injury, yet deliberately
failed to avoid such injury. The bill does not create punitive damages
in those states that don't recognize them. The bill further limits
punitive damages to two times the amount of economic damages or
$250,000, whichever is greater.
- Heightened pleading standards for punitive damages. Punitive
damages may not be sought by the plaintiff initially. At the court's
discretion, a plaintiff may be allowed to file an amended pleading
for punitive damages only after a finding by that court that there
is a substantial probability that the plaintiff will prevail.
- Immunity from punitive damages in product liability cases.
The bill completely immunizes manufacturers of drugs and
devices that are approved by the FDA from punitive damages. The
bill also extends immunity to the manufacturers of drugs and devices
that are not FDA-approved yet are "generally recognized as
safe and effective." Finally, the bill immunizes the manufacturer
or seller of drugs from punitive damages for packaging or labeling
defects. These broad-based immunities completely undermine patient
safety by eliminating the deterrent effect of punitive damages and
have no relation to issues regarding medical malpractice.
- Medical products and medical provider suits must be brought
separately. H.R. 5 requires that health care providers
not be named as defendants in the same cases as pharmaceutical or
medical device manufacturers. Further, health care providers may
not be held liable to an injured patient in a class action against
pharmaceutical or medical device manufacturers. Of course, these
requirements do not mean that the provider was not negligent. Instead
of having all parties present and allowing the jury to evaluate
the evidence, this provision will allow the defendant to blame another
defendant who is not a party to the case. The result will be finger
pointing by wrongdoers while injured patients remain uncompensated.
- Periodic payments of all future damages. Allowing
all future damages over $50,000 to be paid periodically punishes
meritorious plaintiffs who were injured by malpractice and unsafe
products and leaves them vulnerable and under-compensated. Meanwhile,
large insurance companies reap the interest benefits of a plaintiff's
jury award.
- Preemption of State Law. The bill includes a sweeping
preemption of state law. This preemption is designed to override
state laws that protect consumers and patients while keeping in
place state laws that favor doctors, hospitals, nursing homes, HMOs,
pharmaceutical and medical device manufacturers, and other health
care defendants.
Specifically, the bill preempts all areas of state law covered
by the bill, including state rules regarding joint and several liability,
the availability of damages, collateral sources, attorneys' fees,
and periodic payments. The bill does not preempt any state defenses
designed to protect health care providers. The bill would leave
in place existing state damage caps on economic, non-economic, or
punitive damages, but would impose the caps in the bill on states
that do not have limitations on damages, including states whose
limitations were struck down as unconstitutional by state supreme
courts.
Updated July 2005
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