You asked for an explanation of medical malpractice tort reform legislation enacted in several states, including California and Colorado.

SUMMARY

California and Colorado adopted tort reform measures in the mid 1970s in response to acute increases in medical malpractice insurance costs. Both states imposed caps on victim's compensation for noneconomic damages. California also placed limits on attorney contingency fees. Colorado required periodic payment of future damage awards in medical malpractices cases.

Nevada, Pennsylvania and West Virginia recently enacted medical malpractice torts reforms in the wake of accelerating premium increases, which correlate with increases in insurer losses and declining investment income. The reforms in these states emphasize procedural and administrative changes. Nevada, while setting limits on noneconomic damages, also established an expedited procedure for resolving medical malpractice cases. Pennsylvania requires hospitals to report medical errors to a newly formed board, and West Virginia bans third-party bad faith claims.

STATE TORT REFORM LAWS

California and Colorado

Tort reform in California and Colorado primarily focused on capping victim compensation for noneconomic damages, also known as "pain and suffering" awards. Unlike economic damages, which include lost wages and medical costs, noneconomic damages are subjective and difficult to quantify. Both laws limit noneconomic damages in medical malpractice lawsuits to $ 250,000, but Colorado also imposes a total noneconomic damage cap of $ 500,000. If the court finds clear and convincing evidence of "derivative noneconomic loss or injury," it may award up to an additional $ 250,000. Derivative noneconomic loss or injury is nonpecuniary harm or emotional stress to people other than the person suffering the direct or primary loss or injury (Cal. Civil Code § 3333. 2 and Col. Stat. Ann. § 13-21-102. 5).

California additionally limits the amount attorneys in medical malpractice cases can collect under a contingency fee arrangement to 40% of the first $ 50,000, 331/3% of the next $ 50,000, 25% of the next $ 500,000, and 15% of any amount that exceeds $ 600,000. These limits apply regardless of whether the recovery is by settlement, arbitration, or judgment. If the contingency fee arrangement is based on an award of periodic payments, the court must place a total value on the payments based on the projected life expectancy of the claimant, and then calculate the contingency fee percentage (Cal. Bus and Prof. Code § 6146)

Colorado requires the trial judge to enter judgment that awards future damages in all tort civil actions for damages against health care professionals or institutions in periodic payments rather than by lump sum if the award exceeds the present value of $ 150,000 (Col. Stat. Ann. § 13-64-204).

Nevada

Assembly Bill 1, which passed the General Assembly in special session requires:

1. a $ 350,000 noneconomic damage cap in medical malpractices cases;

2. a $ 50,000 limitation on damages brought against doctors and hospital when treating emergency trauma patients;

3. a three-year statute of limitation for suits filed on or after October 1, 2002, but before October 1, 2005, and a two-year statute of limitation for suits filed on or after October 1, 2005;

4. judges be given discretion to enter judgments that provide that money for future damages be paid periodically;

5. establishment of expedited procedures for medical malpractice cases and elimination of the medical and dental screening panels;

6. attorneys to personally pay the cost and expense that result from their unreasonable conduct in civil litigation;

7. district court dismissal, without prejudice, of any medical malpractice lawsuit filed without an affidavit, submitted by a medical expert who practices or has practiced in an area substantially similar to the type of practice engaged in at the time of the alleged malpractice, supporting the allegations contained in the lawsuit; and

8. the Nevada Supreme Court to establish, by court rule, mandatory medical malpractice training for each district judge assigned medical malpractice cases (Chapter 41, NRS).

Pennsylvania

House Bill 1802 requires:

1. hospitals to report medical errors to a newly formed Patient Safety Authority to identify preventable trends and problems;

2. establishment of a Medical Catastrophe Fund (CAT) discount in 2002 through 2004 to give doctors immediate relief from escalating medical malpractice premiums;

3. strengthening of the State Medical Board's enforcement powers by granting it the authority to investigate doctors;

4. privatization of CAT Fund's claims handling function beginning in 2003, and phasing it out beginning in 2006;

5. judges be given discretion to order payment of malpractice judgments for future medical costs periodically;

6. medical malpractice claims to be filed within seven years from the date of injury; and

7. judges be given discretion, at urging of doctors or hospitals, to lower verdict if it would force doctors out of business or force hospitals to cut services.

West Virginia

The tort reform provisions of House Bill 601:

1. prohibits third-party bad faith claims and provides that first-party claims cannot be filed until the conclusion of the underlying lawsuit (third-party bad faith suits are where the patient, in addition to bringing a malpractice suit against a healthcare provider, sues the provider's insurer for handling the claim in bad faith);

2. requires a notice of claim and screening certificate of merit 30 days before the plaintiff files a claim and gives the healthcare provider the option to request pre-litigation mediation;

3. requires medical records to be provided on an expedited basis (30 days from request of either the plaintiff or defendant), but if a dispute arises over the relevance of the records, the judge decides if the parties should share them;

4. provides timeframe standards for handling medical malpractices cases (status conference within 60 days and trial date within 24-months) and requires additional mediation before trial;

5. provides procedures for summary jury trials, subject to approval of both parties. (In a summary jury trial, six jurors are selected and a specific amount of time is allotted to defense and plaintiff attorneys to give what are essentially summary statements. Within one day after the trial is over, the jury is directed to reach a consensus. Decisions are neither non-binding nor admissible in court if the case later goes to trial);

6. expands juries in medical malpractice cases from six to 12 members and requires nine of the 12 to be in agreement for a verdict;

7. increases the filing fee for medical malpractice cases from $ 85 to $ 250, $ 165 of which goes to the Board of Risk and Insurance Management, which offers insurance to healthcare providers who are unable to obtain it on the private market; and

8. makes the reforms effective for all civil actions filed on or after March 1, 2002.

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