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Texas, Florida watching effects of med mal reforms


In a tale of two states' medical malpractice reforms, proponents in one are calling it the best of times, while those in the other say that not much is likely to change.

While tort reformers can claim success in both Texas and Florida, the laws that cap noneconomic damages in the two states are vastly different. In Texas, a constitutional amendment will protect the limits on damages. The Florida law, though, is widely viewed as falling well short of what was needed.

Texas reformers are enthusiastic over their Legislature's passage last year of a law that caps noneconomic damages against individual physicians in medical malpractice cases at $250,000. Noneconomic damages against hospitals and other facilities are limited to $500,000.

In Florida, noneconomic damages in most medical malpractice cases are capped at $500,000, but tort reform advocates point out that the cap is "pierceable." In cases in which a judge decides that the cap would represent a "manifest injustice," a claimant can recover up to $1 million against a medical provider and as much as $1.5 million from a nonpracticioner defendant.

The caps "weren't enough to do the job," said Jeff Scott, associate general counsel at the Florida Medical Assn. in Tallahassee. "Rates are still going up," he said of malpractice insurance costs.

There is a far greater sense of accomplishment in the Lone Star State.

The Texas tort reform law gained a measure of protection when voters ratified an amendment to the state's constitution that confirms the constitutionality of the caps. Those who worked to pass the reforms acknowledge that timing was a big factor in their success in Texas.

"The stars were lined up right," said Charles W. Bailey Jr., president of the Texas Medical Assn. in Austin. That alignment meant pro-reform Republicans were in control of the Texas House of Representatives and Senate and Republican Gov. Rick Perry also backed the changes.

To convince voters that a constitutional amendment was needed to protect the caps, the medical association and other reformers worked hard to spread their message, Mr. Bailey said. "We had a very intense grass-roots campaign," he explained, with doctors, medical students and "a small army of patients" hammering home the theme that huge awards were eroding access to care by driving away health care providers.

Although industry sources say it will take some time for the impact of the new law to be realized, at least one insurer has lowered rates as a result of the reforms that were effective last summer. Texas Medical Liability Trust in January decreased medical malpractice rates by 12% for some of its policyholders.

Meanwhile, in Florida, "from an insurer perspective, there was not much to crow about in this reform," said William Stander, the Tallahassee-based regional manager with the Property Casualty Insurers Assn. of America.

In accordance with the law, the state's Department of Financial Services has mandated that all insurer requests for rate increases be reduced by 7.8%. But rates will continue to rise, Mr. Stander pointed out, because insurers are requesting large increases.

That gives the trial bar, which opposed the caps, the opportunity to claim that, even with the caps, rates will continue to go up, Mr. Stander said.

"The Academy of Florida Trial Lawyers has always held the position that there should never be caps on damages of any kind," said Richard M. Shapiro, president of the Tallahassee-based group and president of Shapiro Law Group in Bradenton, Fla.

Statistics don't show that huge medical malpractice awards are handed out by "runaway juries," said Mr. Shapiro, who claims insurers are crying wolf. "I truly believe there is no crisis and would love to see insurance companies open their books and prove that they are losing money," he said.

Sherman Joyce, president of the American Tort Reform Assn. in Washington, said that "it remains to be seen" what impact the Florida reforms will have. The overarching issue, he said, is whether the law will survive or challenges will eventually lead to it being overturned.

While the Florida reforms may have come up short in the minds of some reform advocates, others say that some gains are better than none.

"We are pleased with what eventually passed," said Leslie Dughi, director of government affairs at the Florida Chamber of Commerce in Tallahassee. "We were pleased because there are some limits, even if it doesn't get the doctors where they want to be. The problem is, the caps are pierceable," she said of the potential for awards to be greater than $500,000.

Conversely, in Texas, not all reform advocates are ecstatic about what passed in that state.

Frank Galitski, executive director of the Texas Alliance for Patient Access in Austin, pointed out that while the cap is protected, the amount of the cap is not. He said that reform advocates are hopeful that, as long as the current group of legislators remains in place, opponents won't be able to build support for raising the cap.

Marianne Fazen, president and chief executive officer of the Dallas-based Texas Business Group on Health, said the association of 208 employers would have supported the caps only if the legislation had also contained quality-of-care provisions and some accountability requirements for the Texas Board of Medical Examiners.

Those features were not part of the final bill, and the caps by themselves probably "are not going to lower the cost that much," Ms. Fazen said of malpractice insurance. "There is the chance that they will harm people who are the victims of bad practice," she said.

As for other states seeking similar reforms, proponents in Texas and Florida emphasize that any success will be the result of teamwork and persistence.

"We stayed on our message-it's about access to health care," Mr. Bailey of the TMA said of the effort in Texas.

"The battle was a very steep incline," said the TAPA's Mr. Galitski. There was no single entity out there that could bring about the change by itself, he said, but by working together, reformers were able to get their message across.

Mr. Stander said that in the wake of Florida's effort, the lesson is that, for the insurance industry, "we have to do a much better job of media and public relations" when laying out a case for such reforms.