HR 5 introduced by Rep. James Greenwood (R-PA), approved by the House March 13 (The 7^th time since 1995 that the House has approved medical liability reform)
S 607 introduced by Senators John Ensign (R-NV), Judd Gregg (R-NH)

Both bills patterned after California’s MICRA and include:

Statute of Limitations: 3 years from manifestation of injury, 1 year from discovery, whichever occurs first, exceptions allow extension for fraud, concealment, presence of unintended foreign objects, and for minors

Economic Damages: Unlimited recovery

Non-economic Damages: $250,000 total recovery limit regardless of number of defendants or number of claims arising from same injury

Fair Share Liability: Each defendant liable for own share of damages allocated proportionate to responsibility determined by Judge

Attorney Contingency Fee Limits: Limits on attorney’s fees for representing all claimants in an action, applicable to claimant’s recovery from judgment, settlement, or arbitration:

• 40% of first $50,000
• 33 1/3% of next $50,000
• 25% of next $500,000
• 15% of any recovery exceeding $600,000

Exception for Minor or Incompetent Plaintiff: court can impose limits below this structure

Evidence of Collateral Source Benefits: Permits evidence of plaintiff’s collateral source benefits and evidence of amounts plaintiff paid (and will pay) for such benefits

Punitive Damages: Not allowed unless evidence of malicious intent; separate filing allowed upon court finding of substantial probability. Maximum amount: $250,000 or twice the amount of economic damages awarded, whichever is greater.

Product Liability: Health care providers cannot be sued for product liability if product is FDA approved

• More than 75% of claims produce no awards.
• $4,000 of every Florida obstetrician’s bill goes to liability coverage cost.
• The HEALTH Act would save the federal government $14 billion and state governments $7 billion annually.

Awards are unpredictable and unrelated to injury:
Juries consistently award higher damages in medical malpractice cases compared to other personal injury cases where comparable injuries are alleged. (Source: 1995 Rand study)

The injured receive a small percentage of the award:
A Rand study found that medical injury plaintiffs typically receive 43 cents of every $1 awarded; the Medicare and workers’ compensation system provides plaintiffs with 75 cents of every $1 awarded

• 74% say medical liability costs are a major problem
• 72% favor caps on non-economic awards
• 64% favor caps on punitive awards
  (Source: Gallop Poll 2003)
• 78% are concerned about rising liability costs’ impact on health care access
• 73% support caps on noneconomic awards
  (Source: Wirthlin Worldwide 2002)

Caps on non-economic damages and permitting collateral evidence keep awards lower. Just caps on non-economic damages kept premiums lower by almost 30% (Source: 1999 GAO study)

California health care costs are down 6%, the state is saving $6 billion annually.

Premiums in California are one-half to one-third lower than rest of country. From 1976 through 2000, premium costs increased nationally 505%; they increased 167% in California. A California OB/GYN pays about $57,000 a year in premiums. A Florida OB/GYN, where there is no reform, pays $210,000 annually

Claims are litigated and resolved 23% faster, the number of claims filed is still high

Awards are 53% lower. Awards continue to increase because of the economy and rising medical costs

Contingency fees increase litigation frequency and extend litigation. Without this limitation, attorneys could continue to pocket large percentages of an injured patient’s award, leaving patients without the money needed for medical care.

The HEALTH Act maximizes patients' awards by ensuring it is not diverted to the attorney, expedites resolution of medical liability claims, and discourages frivolous suits by limiting the incentive to pursue meritless claims.

Joint liability unfairly puts full responsibility on those who may have only marginal fault by having them responsible for another’s negligence. The HEALTH Act provides that each party is liable for his/her own share of responsibility. It also eliminates the incentive for plaintiffs’ attorneys to search for “deep pockets.”

Obstetricians are being forced to stop or reduce deliveries and limit or eliminate care for high-risk patients, the uninsured, and the underinsured. Without the HEALTH Act, women will receive less prenatal care and less preventive health care.

Most Americans approve of, and recognize the need for, caps on non-economic damages: 72% in a 2003 Gallop poll, 73% in a 2002 Wirthlin survey.

By their nature, non-economic damages for pain and suffering are not quantifiable, so inflationary adjustments make no sense. In the HEALTH Act, economic damages are unlimited and affected by inflation in reimbursing for future wages, medical care and other expenses.

An inflation adjustment would cancel the bill’s beneficial consequences of increased financial stability and predictability, as recognized by the House Judiciary Committee when it defeated such an addition to the House-approved bill in the previous Congress. Moreover, the bill allows states to adjust the cap on non-economic damages.

Insurance companies’ investments are regulated by the states, which typically require about 80% of insurance investments to be in bonds, not stocks. The bond market has provided a stable annual return of about 5% since 1997.

Enacted in 1988, Proposition 103 mainly addresses auto insurance issues. It does not prohibit insurers from raising rates, but it requires public hearings if an insurer wants to raise rates by more than 15%. A hearing has only occurred once and the insurer rescinded the rate hike request when the public objected.

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