The 114th Congress has resurrected the failed Help Efficient, Accessible, Low-cost, Timely Healthcare (HEALTH) Act in an attempt to introduce federally mandated medical malpractice reform. First drafted in 2005, the bill was reintroduced in 2011 by Missouri Republican Rep. Roy Blunt but never came to a vote.

Introduced March 17, 2016, by Arizona Republican Trent Franks, the Help Efficient, Accessible, Low-cost, Timely Healthcare  Act of 2016  was referred to the House Judiciary and Energy and Commerce Committees on March 22. It is co-sponsored by Rep. Lamar Smith, (R-Texas).

Proposed Medical Malpractice Reform  

The current proposal, HR 4771,  differs little from the bill introduced in 2011 by Rep. Blunt. It proposes:

• A  three-year statute of limitations on most medical malpractice claims
• A noneconomic damages cap of $250,000
• A “fair share rule” that apportions damages based on the degree of each defendant’s culpability

• Limiting attorney’s contingency fees to a decreasing percentage based on the increasing value of the amount awarded, according to the following schedule:
  • Forty percent of the first $50,000
  • Thirty-three and one-third percent of the next $50,000
  • Twenty-five percent of the next $500,000 recovered by the claimant
  • Fifteen percent of any amount  in excess of $600,000.

• Limiting the award of punitive damages to cases in which,
  • Clear and convincing evidence proves that the plaintiff acted with “malicious intent” or deliberately failed to prevent unnecessary injury the plaintiff was “substantially certain” to suffer
  • Compensatory damages are awarded

• Limiting punitive damages to twice the amount of economic damages or $250,000.
• Prohibiting punitive damage awards when a product has been approved, licensed or cleared by the Food and Drug Administration or complies with FDA standards.

In a letter to the House Judiciary Committee Chair Robert W. Goodlatte, Thomas P. Nickels, Executive Vice President of the  American Hospital Association, expressed the AHA’s support of the bill.

The bill is opposed by the American Bar Association and several dozen consumer groups, including Consumer Federation of America, Consumer’s Union, the National Women’s Health Network and the U.S. Public Interest Research Group.

The American Medical Association has long been a supporter of federal medical malpractice laws.

Is Federal Medical Malpractice Reform A Good Idea?

The stated purpose of HR 4771 is “to improve patient access to health care services and provide improved medical care by reducing the excessive burden the liability system places on the health care delivery system.” As has been the case for nearly two decades, proponents of the proposal  claim that limiting patient recovery in medical malpractice cases will decrease healthcare costs by limiting the practice of “defensive medicine” and removing incentives for spurious malpractice claims.

However,  the correlation between noneconomic damage caps and per-capita healthcare spending is tenuous at best.

For example, since the 1980s, Alaska has capped noneconomic damages at $250,000 ($500,000 in cases or permanent injury and wrongful death), yet its healthcare spending per capita is the the third highest in the United States ($9,128). Massachusetts, which caps noneconomic damages at $500,000, ranks No. 2. ($9,278). The District of Columbia, which has no damages cap, is No. 1.

By contrast, Arizona, where no cap exists, spends just $5,434 per capita on health care. Only Utah, which caps damages at $450,000, spends less.

In fact one of the most cogent arguments against federal medical malpractice reform is that the authority to enact medical liability legislation has historically belonged to the states, who have done an effective job.  As of January 2016, about half of the states already have some form of noneconomic damages cap in place, and six states cap total damages. Thus, the ABA argues, Congress has no reason or authority to “substitute its judgement...for the systems that have evolved in each state over time.”

Another important argument against capping noneconomic damages is that it unfairly limits access to the courts by low-wage workers and the unemployed, including children, the elderly, women and ethnic minorities. Since attorneys who represent medical malpractice plaintiffs work on a contingency basis, these low-or no-income clients are unlikely to obtain effective representation because any damage awards will be low. Thus, many cases involving serious and persistent harm are never heard.

Limiting attorney’s fees to a diminishing percentage of damages would accomplish the same end: that is, limiting access to effective representation by those who can claim little, if any, economic harm.  

At The Physician Guard, we understand that transferring risk for professional liability is a serious concern for every physician practicing medicine in the United States. That’s why we tailor all of our policies to our client’s individual needs and offer the most comprehensive coverage at the most affordable price.

Give us a call at 516-292-3780 to set up an appointment for your insurance review, or simply request a free quote online now at http://carmoongroup.com.