Recently Proposed Tort Reform in Medical Malpractice – H.R. 5

Some of the main aspects of this bill pertaining to liability reform are:

• This Act may be cited as the ‘‘Help Efficient, Accessible, Low-cost, Timely Healthcare (HEALTH) Act of 2011’’.

• The purpose of the Act is to implement reasonable, comprehensive, and effective health care liability reforms designed to

• Improve the availability of health care services in cases in which health care liability actions have been shown to be a factor in the decreased availability of services;

• Provide an increased sharing of information in the health care system which will reduce unintended injury and improve patient care.

• Speedy resolution of claims is encouraged by mandating that the time for the commencement of a health care law suit shall be 3 years after the date of manifestation of injury or 1 year after the claimant discovers, or through the use of reasonable diligence should have discovered, the injury, whichever occurs first. In no event shall the time for commencement of a health care lawsuit exceed 3 years after the date of manifestation of injury unless tolled for any of the following:

(1) Upon proof of fraud;

(2) Intentional concealment; or

(3) The presence of a foreign body, which has no therapeutic or diagnostic purpose or effect, in the person of the injured person.

• Actions by a minor shall be commenced within 3 years from the date of the alleged manifestation of injury except that actions by a minor under the full age of 6 years shall be commenced within 3 years of manifestation of injury or prior to the minor’s 8th birthday, whichever provides a longer period. Such time limitation shall be tolled for minors for any period during which a parent or guardian and a health care provider or health care organization have committed fraud or collusion in the failure to bring an action on behalf of the injured minor.

• No limit for economic damages in a health care lawsuit

• In any health care lawsuit, the amount of noneconomic damages, if available, may be as much as $250,000, regardless of the number of parties against whom the action is brought or the number of separate claims or actions brought with respect to the same injury.

• Future noneconomic damages shall not be discounted to present value. The jury shall not be informed about the maximum award for noneconomic damages.

• An award for noneconomic damages in excess of $250,000 shall be reduced and such reduction shall be made before accounting for any other reduction in damages required by law. If separate awards are rendered for past and future noneconomic damages and the combined awards exceed $250,000, the future noneconomic damages shall be reduced first.

• Each party shall be liable only for the amount of damages allocated to such party in direct proportion to such party’s percentage of responsibility.

• In no event shall the total of all contingent fees for representing all claimants in a health care lawsuit exceed the following limits:

(1) Forty percent of the first $50,000 recovered by the claimant(s).

(2) Thirty-three and one-third percent of the next $50,000 recovered by the claimant(s).

(3) Twenty-five percent of the next $500,000 recovered by the claimant(s).

(4) Fifteen percent of any amount by which the recovery by the claimant(s) is in excess of $600,000.

• Punitive damages may, if otherwise permitted by applicable State or Federal law, be awarded against any person in a health care lawsuit only if it is proven by clear and convincing evidence that such person acted with malicious intent to injure the claimant, or that such person deliberately failed to avoid unnecessary injury that such person knew the claimant was substantially certain to suffer.

• No demand for punitive damages shall be included in a health care lawsuit as initially filed. A court may allow a claimant to file an amended pleading for punitive damages only upon a motion by the claimant and after a finding by the court, upon review of supporting and opposing affidavits or after a hearing, after weighing the evidence, that the claimant has established by a substantial probability that the claimant will prevail on the claim for punitive damages.

• At the request of any party in a health care lawsuit, the trier of fact shall consider in a separate proceeding—

(1) Whether punitive damages are to be awarded and the amount of such award; and

(2) The amount of punitive damages following a determination of punitive liability.

• In determining the amount of punitive damages, if awarded, in a health care lawsuit, the trier of fact shall consider only the following—

(A) The severity of the harm caused by the conduct of such party;

(B) The duration of the conduct or any concealment of it by such party;

(C) The profitability of the conduct to such party;

(D) The number of products sold or medical procedures rendered for compensation, as the case may be, by such party, of the kind causing the harm complained of by the claimant;

(E) Any criminal penalties imposed on such party, as a result of the conduct complained of by the claimant; and

(F) The amount of any civil fines assessed against such party as a result of the conduct complained of by the claimant.

• The amount of punitive damages, if awarded, in a health care lawsuit may be as much as $250,000 or as much as two times the amount of economic damages awarded, which ever is greater. The jury shall not be informed of this limitation.

Rep. Gingrey explains that his proposal is based upon the California Medical Injury Compensation Reform Act of 1975, signed into law by then Governor Jerry Brown.

According to Victor E. Schwartz, general counsel to the American Tort Reform Association, “one need not only look to California as proof that the cap on pain and suffering is effective. In the past few years, Mississippi and Texas also have enacted medical liability laws that limit non-economic damages. As a result, additional malpractice insurers have entered the market in both states, and insurance costs have been stabilized.”

Though tort reform legislation such as that proposed by Rep. Gingrey has often been a hot topic, House Republicans are finding early success with H.R. 5. The House Energy and Commerce health subcommittee held an April 6 hearing on the measure, which has the support of the American Medical Association and other physician organizations. The bill already passed the House Judiciary Committee. The full House Energy and Commerce Committee is due to consider the legislation in mid-May. A Senate companion bill (S. 218) has only two cosponsors and is awaiting consideration by the Senate Judiciary Committee. Physicians testifying at the hearing explained that the threat of malpractice suits drives up the cost of care by encouraging defensive medicine, and that the litigious climate contributed to increases in malpractice insurance premiums.

House Energy and Commerce Health Subcommittee Democrats said certain lawsuits for legitimate injuries would not be pursued if noneconomic damages were limited so severely. In addition, they argue that $250,000, unadjusted for inflation, is not enough to compensate for the pain and suffering of patients who have been disfigured, rendered blind or otherwise seriously injured. “It will penalize innocent victims of medical negligence,” said Rep. Lois Capps (D-CA). Rep. Capps added that the bill does nothing to cut preventable medical errors or improve patient care.

Further, during the hearing, Rep. Harry Waxman (D-CA) argued: “Regulation of insurance and the practice of medicine are quintessential state issues—they always have been. H.R. 5 would take away that or pre-empt that authority and that prerogative…But as this legislation makes clear, that guiding philosophy evaporates when it comes to protecting the interests of the insurance industry. No wonder the author of this legislation did not cite the 10th Amendment—the one that reserves power to the states—as the constitutional basis for its introduction.”

As would be expected, lobbying both for and against H.R. 5 is in full swing. For example, the President of the American Association for Justice (“AAJ”), also known as the Association of Trial Lawyers of America, a Plaintiff trial attorney lobby group, Gibson Vance, stated, “After repealing a bill that provided health insurance to over 30 million Americans, the next proposal from the new House leadership is to take away the legal rights of injured patients, remove any incentive to improve safety, and leave people at risk for more injuries from negligent care. This is the most perverse form of legislating imaginable.” The AAJ has lobbied against the passage of H.R. 5. http://disclosures.house.gov/ld/pdfform.aspx?id=300365167 and http://www.pointoflaw.com/archives/2011/04/trial-lawyers-l-1.php

Though medical malpractice reform is nothing new to the political agenda, both parties, appear interested in at least taking a look at the present system. In fact, President Barack Obama included a brief mention of tort reform during his State of the Union address, stating that he’d be open to “medical malpractice reform to rein in frivolous lawsuits.” It will be interesting to follow this story as it progresses leading up to the 2012 Presidential election, as there are strong opinions on both sides of the debate.

Author: Drew M. Rothman

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