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White House open to medical liability changes

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WASHINGTON—President Barack Obama's openness to some types of medical liability reform is drawing mixed reviews from people on both sides of the issue.

While welcoming the president's assurance in last week's State of the Union address that he is willing to consider proposals designed to eliminate “frivolous” medical malpractice lawsuits, some reform advocates say that does not go far enough.

However, opponents of changes in medical malpractice liability say the president should pay more attention to victims of malpractice rather than circumscribing their legal remedies.

Meanwhile, even proponents of more comprehensive reform say that while a recently introduced measure to cap noneconomic medical malpractice damages can win House approval, it is likely to fail in the Senate.

Medical malpractice liability reform went largely unaddressed in the health care reform law that became U.S. law last year. But in last week's address, the president said, “I'm willing to look at other ideas to bring down costs, including one that Republicans suggested last year—medical malpractice reform to rein in frivolous lawsuits.”

“I do think it's encouraging” that the president mentioned medical liability reform in the State of the Union address, said Melissa Shelk, vp-federal affairs at the American Insurance Assn. in Washington. She noted that he did not specify support for any particular piece of legislation or design of reform, but added that health care reform law calls for state-level demonstration projects to examine ways to reduce liability costs.

The president's comments drew praise from Lisa A. Rickard, president of the U.S. Chamber Institute for Legal Reform in Washington.

“We wholeheartedly support President Obama's call for meaningful medical malpractice reform,” Ms. Rickard said in a statement. “The president's support for reform dovetails with efforts by many in Congress.”

But Victor Schwartz, general counsel of the American Tort Reform Assn. in Washington, was more skeptical. He noted that the recently introduced Help Efficient, Accessible, Low-Cost, Timely Healthcare Act of 2011—H.R. 5—does not mention sanctioning frivolous lawsuits. The measure instead focuses on “substantive” reforms such as capping noneconomic and punitive damages, he said (see box, page 3).

It is “rare or unusual” for a plaintiff lawyer to bring a frivolous malpractice suit because they are too expensive to bring, said Mr. Schwartz. “Frivolous” claims tend to be made against small businesses as an effort to leverage a settlement rather than in medical malpractice cases, he said.

“The president has been openly opposed to caps on noneconomic damages,” said Lawrence Smarr, president of the Physician Insurers Assn. of America, a Rockville, Md.-based trade group representing medical professional liability insurance companies owned by health care professionals or institutions. “We'll now have to see, since he came out with such a strong statement, where he's going now,” he said.

A consumer advocate criticized the president's comments for the message they send to victims of medical malpractice.

“There are very rarely frivolous lawsuits,” said Joanne Doroshow, executive director of the Center for Justice & Democracy in New York. By using such language regarding medical malpractice, the president “really upset medical malpractice victims whose lives have been devastated and who seek justice in the court,” she said.

“Medical malpractice errors are an enormous problem in this country and I think everyone would agree that the best way to reduce injuries and deaths and claims and lawsuits is to make hospitals safer,” Ms. Doroshow said.

Meanwhile, a bipartisan group of congressmen introduced the bill that takes a quite different approach to medical malpractice issues.

Instead of targeting frivolous lawsuits, H.R. 5 would cap punitive damages, where permitted, at $250,000 or twice the economic damages in medical malpractice awards, whichever is greater. Noneconomic damages would be capped at $250,000.

The measure also would limit attorney contingent fees in medical malpractice cases, on a sliding scale, to a maximum of 40% on the first $50,000 to 15% on awards of more than $600,000.

But proponents and opponents of medical malpractice liability reform say the measure is unlikely to become law.

“We think it will pass the House, but when we get to the Senate it's very likely we'll have the same issues we had before due to the Democrats not voting for tort reform,” said the PIAA's Mr. Smarr. Nevertheless, he does not consider the bill “an exercise in futility.” Instead, he said the measure “clearly demonstrates” the House leadership's commitment to reform.

AIA supports the legislation, said Ms. Shelk. “This has been the template we've supported in states,” she said, adding that “we'll work to get it through the House. We're going to certainly face a tough road in the Senate.”

Even when Republicans controlled both houses of Congress, proposals capping damages garnered insufficient votes in the Senate, Mr. Schwartz said.

“It's extremely difficult to get caps through the Senate,” he said, adding that it also would be very difficult to integrate federal caps with existing state caps.

Ms. Doroshow agreed that the measure has no future in the Senate.

“From what I can gather, the Senate has no real interest in doing anything like that,” she said. “It may pass the House, but I don't see it going anywhere in its current form in the Senate.”