Medical liability reform stalling

Legislative compromise won't include malpractice award caps

By Richard Locker, Commercial Appeal
March 19, 2007

NASHVILLE -- Tennessee physicians have pinned their hopes for legislative passage of medical liability reform -- primarily caps on punitive damage awards -- on the Republican leadership in the state Senate.

But after five years, there is now agreement among GOP leaders that the $250,000 limit on punitive damages sought by the Tennessee Medical Association won't be included in a compromise bill worked out with Democrats in the House of Representatives.

The Senate's top Republican, Speaker Ron Ramsey, this week put his key support behind the compromise aimed at weeding out "frivolous" malpractice lawsuits as the main vehicle for reducing insurance costs for doctors and other health care providers.

Ramsey and Senate Republican Leader Mark Norris of Collierville, who has championed medical-liability reform bills for the TMA for five years, said the political reality is that limits on punitive damage awards by juries won't pass the House. The TMA's chief opponent on the issue, the Tennessee Trial Lawyers Association, holds more sway in the House.

"I believe we can pass caps in the Senate. We could do that and use it as a campaign issue next year -- or we could take the governing approach and do what we can this year and wait until we get a (GOP) majority in the House and then pass caps," Ramsey said.

Earlier in the week, Ramsey told a meeting of the National Federation of Independent Business that weeding unmerited lawsuits out of court will be "a huge step in the right direction" and will save business owners money on their health insurance premiums.

The issue may come to a head Tuesday when Norris has scheduled a hearing on the compromise bill in the Senate Judiciary Committee.

Norris said the TMA knows that caps won't be included in this year's bill. "Long term, we all feel that caps are the ultimate solution. But the key is to make some progress this year because nothing is getting done. Caps have overshadowed other aspects of my bill for five years but there are other provisions and we are focusing on those," he said.

Those provisions, likely to be part of the draft, include:

Early certification of malpractice lawsuits as valid by the attorneys representing the plaintiff and a medical expert. A lawyer who signed a "certificate of good faith" on a claim found to be without merit could be fined.

"Early certification is probably the key component," Norris said. "Too often, claims are filed without being vetted and they go on the physician's record."

Early evaluation of claims. Current state and federal law makes evaluation of a claim early in the process impossible, Norris said, because there's no access to medical records nor interviews with the physicians.

"It used to be that when a claim was filed, (lawyers) could call the treating physician and you would know if you had a meritorious claim fairly quickly," he said. "The law prohibits that now and you have to go through a laborious process of getting releases and consents, then scheduling depositions. That prolongs the process because you have to schedule the doctors, nurses and all kinds of professionals involved in the chain of care, and all the lawyers."

Norris said negotiators are trying to find a way to streamline the process and still adhere to health privacy laws.

Exoneration for physicians. Norris said sometimes claims are filed because the statute of limitations is about to expire but the claims are later found to be without merit. "Exoneration" would allow doctors to legally omit disclosure of such merit-less claims when applying for insurance or in the credentialing process with hospitals.

Lobbyists for the TMA and the Trial Lawyers (who represent plaintiffs in malpractice cases) were not privy to the negotiations between House and Senate sponsors of the bill and are taking a cautious approach before endorsing the compromise.

"If the final version provides sufficient advancement, it's certainly something we'd take a look at and not discard it just because it didn't contain caps," said TMA lobbyist Gary Zelizer. "The question is whether we get enough out of it."

Mary Littleton of the trial lawyers association said she's also awaiting the final version, but said omitting caps from the proposed legislation is a big step in the right direction. "It depends on what else is included. Certainly, adding another hurdle for injured patients is not something that is desirable. On the other hand, reducing the number of lawsuits that are without merit will help drive down costs.

"But I think it will be a compromise or nothing. That's the way the legislature works."

--Richard Locker: (615) 255-4923

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Medical liability reform in the Tennessee legislature

Doctors and plaintiffs attorneys have been fighting over medical malpractice reform for nearly a decade.

Last year, the American Medical Association listed Tennessee as a "crisis" state in the costs of liability insurance facing doctors, forcing many to close high-risk practices such as obstetrics or to leave the state.

Doctors want a ceiling -- $250,000 -- on the punitive damages that courts can award malpractice victims (awards for actual losses would not be capped).

But Trial Lawyers and recent studies contend the issue is not that serious in Tennessee. The state Department of Commerce and Insurance said medical organizations paid $61.8 million in 2005 to defend against malpractice claims, health organizations paid $119 million in settlements that year, and courts awarded another $6 million.

The medical journal Health Affairs published an article by Teresa Meyer Waters, an associate professor at the University of Tennessee Health Science Center, and colleagues from other institutions, that concluded Tennessee had one of the lowest number of paid malpractice claims per doctor in recent years among the 50 states. Tennessee also ranked seventh from the bottom in the average malpractice payment per physician per year, about $3,000.