LEGISLATION; LIABILITY (LAW); LITIGATION; MALPRACTICE; MEDICAL MALPRACTICE; MEDICAL MALPRACTICE INSURANCE;
September 10, 2003
RECENT STATE MEDICAL MALPRACTICE ACTIONS
By: Saul Spigel, Chief Analyst
You asked for an update of OLR report 2002-R-0900, which described medical malpractice reforms in other states.
According to the Health Insurance Association of America, 41 state legislatures debated medical malpractice reform in their 2003 sessions, but only 11 passed legislation (and Missouri’s legislation was vetoed). Seven of those included caps on noneconomic damages. According to the National Governor’s Association, in addition to caps, states considered shortening their statute of limitations to file suit, reducing frivolous suits by requiring mediation and pretrial screening, better medical error reporting, and more stringent doctor discipline. This report describes the legislation enacted and signed in nine states and bills passed in Nevada’s current special session on malpractice but not yet signed by the governor.
On the federal level, President Bush’s proposal for a $ 250,000 national cap on noneconomic damages has stalled in Congress. The National Conference of State Legislatures resolved at its 2003 annual meeting to oppose a national cap on the grounds that it would usurp state authority.
NONECONOMIC DAMAGE CAPS
Seven states adopted caps on noneconomic damages, that is compensation for pain, suffering, physical disfigurement, and other nonpecuniary damages that are not compensable as medical expenses or lost earnings. Table 1 describes their provisions.
Table 1: 2003 Legislation Capping Noneconomic Damages
H. B. 1007
Extends pre-existing $ 250,000 cap on noneconomic damages for medical malpractice to cases of physical impairment and disfigurement.
S. B. 2-D
Noneconomic damages for medical negligence capped at $ 500,000 for physicians and $ 750,000 for hospitals. In emergency room cases, the limit is $ 150,000 each. For nonemergencies, the cap is $ 500,000 for each physician, with an aggregate cap of $ 1 million for all claimants. For hospitals, HMOs, hospice providers, and other nonphysician providers, the cap is $ 750,000 per claimant, with $ 1. 5 million aggregate cap for all claimants. A cap may be raised in nonemergency situations to the equivalent aggregate amount for death, permanent vegetative state, or other catastrophic injury where a judge determines it would be unjust not to exceed the cap.
H. B. 92
Caps noneconomic damages awards in civil cases at $ 250,000 (down from previous limit of $ 400,000), adjustable each year in accordance with rise or fall of state “average annual wage. ”
Noneconomic damages capped at $ 250,000 or 3 times economic loss to a maximum of $ 350,000/plaintiff or $ 500,000/occurrence; exceptions to noneconomic caps are permanent and substantial physical deformity, loss of limb or bodily function, permanent physical functional injury limiting activities of daily living; exceptions allow awards up to $ 500,000 plaintiff or $ 1,000,000/occurrence.
S. B. 629
Noneconomic damages capped at $ 300,000 in cases involving pregnancy.
H. B. 4
Comprehensive tort reform legislation established a tree-tiered system for awarding noneconomic damages in medical malpractice cases. A $ 250,000 cap applies to all doctors involved in a case, with a $ 250,000 cap against any single institution and a $ 500,000 cap on all health-care institutions combined.
H. B. 2122
Maximum award for noneconomic loss of $ 250,000 per occurrence; $ 500,000 per occurrence for wrongful death, permanent and substantial deformity, loss of limb or bodily function; after January 1, 2004, will increase to account for inflation up to 50 percent, the maximum thereafter with be $ 1 million.
Sources: National Conference of State Legislature (April 2003) and BNA reports.
OTHER TORT REFORM MEASURES
Arkansas passed legislation requiring clear and convincing evidence before punitive damages (i. e. , damages awarded to punish the individual responsible for the injury) can be recovered and limits them to the greater of $ 250,00 or three times the compensatory damages (i. e. , those directly related to the injury), up to $ 1 million. It made each defendant’s liability for punitive damages several only and not joint, with the percentage of fault based on all parties who contributed to the alleged harm regardless of whether they were party to the suit (HB 1038). (In joint liability, each party is potentially responsible for all damages; where liability is several, a party is responsible only for the portion of damages attributable to it. )
Delaware’s legislation requires malpractice suits be accompanied by an affidavit of merit from an expert witness stating that there are reasonable grounds to believe negligence occurred (HB 310).
In addition to its cap on noneconomic damages (see Table 1), Florida’s comprehensive medical malpractice bill, which was enacted after a lengthy and contentious special session, contains a variety of other reform measures. These include:
1. freezing malpractice premiums through December 31, 2003 and requiring insurers to reduce rates retroactively based on state estimates of how much the new law will save them;
2. requiring hospitals and doctors to tell patients when they are injured, although courts cannot consider these statements as admissions of liability and plaintiffs could not introduce them as evidence;
3. requiring hospitals and surgical centers to adopt patient safety plans and appoint patient safety committees and officers;
4. allowing insurers seven months to study malpractice suits and offer settlements;
5. allowing doctors to sue insurers for “bad faith” acts when courts issue large damage awards against them and their insurers failed to offer settlements;
6. requiring the state to suspend the license of practitioners who do not pay damage awards within 30 days; and
7. requiring insurers, doctors, and hospitals to provide the state with more information on premium rates, medical errors, and malpractice suits (SB 2-D).
In addition to reducing its cap on noneconomic damages (see Table 1), Idaho limited punitive damage awards to the greater of $ 250,00 or three times the compensatory damages award (HB 92).
The Nevada legislature is currently in special session to address medical malpractice issues. It has enacted legislation to protect physicians when malpractice insurers decide to leave the market by requiring such insurers to inform the state 120 days before they withdraw. In addition, the state insurance commissioner could require an additional 60 days in cases where affected physicians would not have access to other malpractice coverage (AB 320).
Legislators also enacted a bill that prohibits insurers from increasing malpractice premium rates because of investment losses (SB 122).
Recent legislation prevents malpractice lawsuits filed based on the “loss of opportunity” for an improved life. The bill reverses a 2001 state Supreme Court decision that expanded the rights of plaintiffs to sue for damages, but it does not prohibit lawsuits against physicians for negligence that “proximately caused the ultimate harm” (SB 119).
In addition to caps on noneconomic damages (see Table 1), legislation enacted in January 2003 contained a collateral source rule provision that allows a defendant to introduce evidence of any amount payable as a benefit to the plaintiff as a result of damages that result from injury, death, or loss to person or property subject to the claim. If the evidence is introduced, the plaintiff may introduce evidence of any amount they have paid or contributed to secure the rights to receive benefits.
Other provisions in this new law allow a defendant to ask the court to conduct a hearing on whether a reasonable good faith basis exists for the claim made against him. If the court finds no such basis, it will award the defendant all court costs and reasonable attorney’s fees he incurs.
If the agreed upon attorney's fees exceed the amount of damages for noneconomic loss, the act makes them subject to probate court approval. It also provides for periodic payments of awards over $ 50,000 (SB 281).
In addition to capping noneconomic damages (see Table 1), Oklahoma reduced the amount of prejudgment interest allowed in medical and nursing home liability cases. It eliminated the award of plaintiff attorney’s fees in nursing home cases and required dismissing medical and nursing home suits if the defendants were not served papers within 180 days of the suit being filed (SB 629).
HB 4 amends Texas’ medical liability laws concerning limits on liability in malpractice cases (see Table 1); informed consent; cases involving emergency care; litigation matters such as expert reports, the structure of attorney’s fees, and filing deadlines; and recovery of medical expenses.
Informed Consent. The act creates a nine-member Texas Medical Disclosure Panel consisting of lawyers and doctors that must determine which risks related to medical care must be disclosed and which procedures may be performed only after disclosing the risks. It must establish a general disclosure form and develop written materials for disclosing risks associated with hysterectomies. Compliance or failure to comply with the required disclosure is admissible into evidence and creates a rebuttable presumption of either informed consent or lack thereof. Failure to disclose may not be found negligent if doing so would have been medically infeasible, such as in an emergency.
Emergency Care. HB 4 repeals the immunity from liability for emergency procedures performed by “good Samaritans” and replaces that immunity with a standard of proof in such cases. A claimant must prove that the treatment or lack of treatment deviated, with willful or wanton negligence, from the degree of care and skill that could be expected from an ordinarily prudent physician in similar circumstances. This provision does not apply to cases involving treatment after the patient is stabilized or to remedy an emergency caused by a provider.
Pretrial Matters. A claimant must provide written notice of a claim at least 60 days before filing a suit and must authorize in writing the disclosure of medical records. All parties have access to the patient’s medical records and standard discovery interrogatories within 45 days of a request. Filers of claims must submit only an expert report and no longer must submit a cost bond. If a claimant fails to serve each party an expert report and the expert’s curriculum vitae within 180 days after filing the claim, the court must dismiss the claim with prejudice and must order the claimant to pay the defendant’s attorney fees and court costs. The required expert report may not be introduced into evidence or referred to by either party in the course of the action, but any other expert report may be introduced by either party. The bill also establishes qualifications for expert witnesses testifying in a claim.
Recovery. A court must order periodic payments, rather than a lump-sum payment, at the request of either the defendant or the plaintiff when an award is $ 100,000 or more. To be allowed to make periodic payments, the defendant must show financial responsibility in the form of an insurance policy, bond, or other proof of ability to make full payment. If a recipient of periodic payments dies, all payments except loss of earnings cease and any remaining security is returned to the defendant.
Legislators enacted a comprehensive new law (HB 2122) in March 2003 that contains caps on noneconomic damages (see Table 1) and other provisions. These other provisions include:
1. an annual tax credit equal to 21% percent of physicians’ adjusted medical liability insurance premiums;
2. collateral source reform, which requires a court to reduce a plaintiff’s award by the net amount he has received from other sources;
3. a $ 500,000 cap on civil damages for injuries or deaths resulting from emergency care in designated trauma centers;
4. requirements concerning expert witnesses’ knowledge, professional activity, and licensure;
5. a requirement for claimants to notify the defendants at least 30 days before filing a suit and provide a certificate of merit from an expert health care provider;
6. the creation of a new physicians’ mutual insurance company to replace the current Board of Risk and Insurance Management plan (all licensed physicians had to pay a one-time fee of $ 1,000 to support the new company); and
7. the creation of a board to study whether to establish a patient compensation fund and how to fund it (HB 2122).