Federal Tort Reform Bill Would Cap Medical Malpractice Awards

Everyone has heard horrific tales of medical negligence - the healthy body part removed instead of the cancerous one, the adult dose of medication given to a child, the baby starting life with a permanent birth injury because someone made a mistake, the grandparent who dies from a hospital infection.

In our legal system, a person hurt through the negligence of another can sue in court for money damages for the harm received. In most scenarios, a jury decides how much money would compensate a victim for his or her injury at the negligent or malicious hand of another.

It is common knowledge that medical professionals have to insure themselves against potential verdicts in malpractice lawsuits and that the insurance premiums have risen over the years. In response, some doctors claim that they practice medicine more carefully to protect themselves from accusations of negligence, and certain high-risk medical specialties - orthopedic surgery and obstetrics, for example - have been harder to staff in some geographic areas. Ultimately, critics say, patients are harmed by the scarcity of specialist care in reaction to high malpractice insurance premiums.

Critics of our legal system - one that can at times award high dollar amounts to those grievously injured - point to allegedly frivolous lawsuits as systemic problems. In response, some states - notably large states like California and Texas - have capped medical malpractice awards at certain dollar amounts.

A congressional movement is afoot to follow the examples of California and Texas and impose nationwide medical malpractice award caps.

HEALTH Act

A proposed bill in the U.S. House of Representatives would limit the size of awards in medical malpractice cases, taking away the traditional role of the jury to decide the appropriate size of a medical malpractice verdict. This would apply in both federal and state courts.

The Help Accessible, Efficient, Low-cost, Timely Healthcare (HEALTH) Act of 2011 was introduced in the House in January and referred to both the Judiciary and the Energy and Commerce Committees. Both committees have passed the bill and it awaits consideration by the full House.

Support for and opposition to the bill falls mostly - but not entirely - along party lines, with Republicans generally being in favor of it and Democrats against the measure. Its chief sponsor, Rep. Phil Gingrey, R-Ga., is in the House Tea Party Caucus, and yet some see the Republican position as being in conflict with its usual mantra of smaller government.

The bill's major provisions concerning damage awards in medical malpractice lawsuits affect such things as:

  • Compensatory damages: Defined as "objectively verifiable monetary losses" and including both economic and noneconomic damages
  • Economic damages: Amount of award would be unlimited and include past and future medical expenses, past and future lost earnings, domestic services, job loss, and lost business or employment opportunities
  • Noneconomic damages: Amount of award would be capped at $250,000 for each injury and would include types of losses that are difficult to quantify like "physical and emotional pain, suffering, inconvenience, physical impairment, mental anguish, disfigurement, loss of enjoyment of life, loss of society and companionship, loss of consortium (other than loss of domestic services), hedonic damages, injury to reputation, and all other non pecuniary losses of any kind or nature" (Hedonic damages are for loss of life's joys; non pecuniary damages are those that do not have exact dollar amounts)
  • Punitive damages: Defined as damages to punish or deter rather than to compensate for loss, amount of award would be capped at the higher of either $250,000 or twice the amount of the economic damage award
  • State caps: If a state sets its own damage cap in malpractice suits, the federal law would not pre-empt it and the state cap would remain valid

Other major provisions:

  • Statute of limitations: The deadline for bringing a malpractice suit would be three years after "manifestation of injury or one year after the claimant discovers, or through the use of reasonable diligence should have discovered, the injury, whichever occurs first."
  • "Fair Share" rule: A party to a medical malpractice suit would only be responsible for his or her share of the injury.
  • Nursing homes, and medical equipment and drug companies: The caps would also apply to suits against these entities.

Support

The bill states that part of its purpose would be to "improve the availability of health care services" where they have contracted because of the high risk of physicians' legal liability. It also hopes to lower health care spending by impacting the practice of defensive medicine characterized by doctors ordering excessive numbers of tests and visits to protect themselves from malpractice liability, as well as avoiding higher risk specialties and procedures.

The measure has strong support from the American Medical Association. On the official AMA website, the current president comments that many doctors spend over $150,000 yearly on their liability insurance to protect themselves from the possibility of excessive damages in malpractice lawsuits. In theory, the savings from lower premiums would trickle down and lower health care costs for everyone.

Opposition

People from both major parties have expressed concern that the bill's uniform federal mandate would intrude on traditional states' powers to regulate insurance, the doctor-patient relationship and personal injury matters according to each state's unique needs and outlook. Similarly, The National Conference of State Legislatures sees the idea of a national award cap amount as interfering with the states' right to decide if they want damage caps at all.

Democrats also feel that the proposed cap of $250,000 is a random number that is not realistically designed to allow adequate compensation in grievous cases. From a practical standpoint, damage caps are criticized as making damage awards inadequate for the most outrageous injuries. Opponents of caps feel that reform should focus instead on limiting malpractice insurance premium levels and looking at what portion of those premiums go to administrative costs.

Perhaps most importantly, attention should be paid to why medical malpractice occurs, and what types of reforms might reduce injury and medical-error rates.

As personal injury attorney Gibson Vance, president of the American Association for Justice, says, "Instead of the federal government inserting itself into what has always been a state issue, Congress needs to focus on the more pressing concern, making hospitals and health care in this country safer."

Ultimate Enactment Not Likely

The U.S. Senate has a comparable bill sitting in its judiciary committee, but given the Democratic majority in the Senate, passage there is not likely. Even if it did get through the Senate, President Obama does not support damage caps in personal injury lawsuits.

If you or a loved one is harmed by medical negligence or malpractice, consult an experienced personal injury attorney in your area as soon as possible.

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