While efforts to pass federal medical liability reform legislation continue, a growing number of states have likewise been considering reform legislation aimed at solving the current crisis. Within the past year or so, Arkansas, Georgia, Idaho, Mississippi, Nevada, Ohio, Pennsylvania, and West Virginia all have enacted some type of reform legislation, and many more have considered reforms, but failed to enact them.
Florida and Texas are the most recent states to pass reform laws. Both states have passed comprehensive reform bills in the past, but their state supreme courts had ruled that key provisions of the laws (particularly the caps on noneconomic damages) were unconstitutional. Following the recent enactment of these new laws, which contain damage caps, each state must pass an amendment to its state constitution to permit the implementation of these new laws. On Sept. 13, Texas voters overwhelmingly approved Proposition 12, granting the Texas legislature the authority to cap noneconomic damages in healthcare liability cases. Florida physicians are continuing to develop their constitutional amendment strategy.
Florida Enacts Liability Reform
After convening three special sessions of the state legislature to consider medical liability reform legislation, on Aug. 14 the Florida House and Senate finally struck a deal and passed medical liability reform legislation. Gov. Jeb Bush subsequently signed the bill, which took effect on Sept. 15. The Florida Medical Association did not support the bill, in part because the noneconomic damage cap was inadequate to hold down escalating liability insurance premiums. Detailed information can be found at www.fmaonline.org/tort, but key provisions follow.
Caps on DamagesCaps in “Routine” Medical Malpractice Cases In cases against physicians, the law establishes a $500,000 cap on noneconomic damages per claimant, regardless of the number of defendant physicians. Any one physician, regardless of the number of claimants, is not responsible for more than $500,000. The maximum amount of noneconomic damages all claimants can recover in the aggregate against all physicians is $1 million.
Situations in Which the Cap Can Be Pierced  In cases involving wrongful death and permanent vegetative state, all claimants may recover a total of $1 million from all physicians without any special findings by the court. If a case does not involve wrongful death or permanent vegetative state, but the trial court finds that a manifest injustice would occur if the lower cap was imposed and the finder of fact finds that a catastrophic injury has occurred, then only the injured patient may recover from a physician an additional amount up to $1 million in noneconomic damages. A catastrophic injury is defined as severe paralysis, amputations, severe brain injuries, severe burns, blindness and loss of reproductive organs.
Caps in Emergency Room Situations A different cap applies for physicians and facilities providing emergency care. For physicians, noneconomic damages shall not exceed $150,000 per claimant and the total noneconomic damages recoverable by all claimants from all physicians are $300,000.
Good Samaritan Immunity Any physician or hospital that provides emergency services pursuant to obligations imposed by federal or state Emergency Medical Treatment and Labor Act (EMTALA) requirements shall not be held liable for any civil damages as a result of such medical care unless they act with reckless disregard for the consequences of their care.
Expert Witness Reform The law includes various litigation process reforms, including new expert witness standards. The expert must be in the same or similar specialty as the defendant and must have been in the active practice of medicine in the last three years, involved in teaching, or in a clinical research program. The trial judge continues to have some discrettionnn as to who can testify as an expert. In addition, the expert who signs the pretrial affidavit must have the same qualifications as the expert who testifies at trial.
Insurance Reforms The law would freeze insurance rates in effect on July 1, 2003, until new rates are calculated that take into account the new law’s impact. The new rates are to take effect no later than Jan. 1, 2004. Liability insurers are required to implement discounts or surcharges based on individual providers’ loss experience. Insurers must notify policyholders of average rate increases of 25 percent or more. Groups of 10 or more physicians are permitted to form a commercial self-insurance fund and physicians continue to be permitted to self-insure (“go bare”).
Quality Improvement The law also includes several provisions related to patient safety and physician discipline.
Texas Enacts Liability Reform
In early June the Texas legislature passed comprehensive medical liability reform legislation. Gov. Rick Perry signed the bill, which, took effect on Sept. 1. In contrast to Florida physicians, however, the bill was enthusiastically supported by the Texas Medical Association, mainly because of the $250,000 cap on noneconomic damages. Highlights of the bill follow.
Caps on DamagesNoneconomic Damages in Typical Malpractice Cases In suits against physicians and other healthcare providers (other than healthcare institutions), the law includes a $250,000 cap on noneconomic damages per claimant, regardless of the number of defendant physicians against whom the claim is asserted.
Charity Care Cases The law includes a $500,000 cap on all damages in suits against a nonprofit hospital or hospital system, its employees, and volunteers (including physicians), if the patient signs an acknowledgement that the care rendered is not for remuneration and liability is limited. The cap also applies if the patient is incapacitated or a minor, and a representative is not reasonably available.
Nonprofit Hospitals Cap on liability for nonprofit hospitals that provide at least 8 percent charity care and at least 40 percent of the charity care in the county is set at the $100,000/$300,000 damage limits that are applicable to governmental entities.
Good Samaritan Immunity The law limits liability for emergency care, and the definition of “Good Samaritan” is clarified to protect persons providing emergency care. Furthermore, jury instructions are required in cases involving emergency care to assure that the jury takes into account the emergency situation (for example, no medical records available, limits on time for diagnosis and treatment, etc.) when assessing a negligence claim.
Sovereign Immunity Physicians will be considered public servants when working for state and local agencies (hospital districts, county hospitals), and their liability is limited to $100,000, with the governmental entity responsible for any excess award. “A public servant includes a licensed physician who provides emergency or post-emergency stabilization services to patients in a hospital owned or operated by a unit of local government.”
Expert Witness Reforms In a suit involving a healthcare liability claim against a physician, a person may qualify as an expert witness only if the expert is practicing medicine at the time testimony is given or at the time the claim arose. The law further provides for some general requirements and considerations as to the substantive qualifications of expert witnesses, but the trial judge has a fair amount of discretion in determining whether an expert meets the necessary qualifications. Within 120 days of filing a suit, the plaintiff must provide the defendant with an expert report and if the plaintiff fails to do so, upon motion of the defendant, the court shall award court costs and attorney fees and dismiss the case with prejudice. This report is not admissible in court.
Periodic Payments If requested by the defendant, the law mandates the periodic payment of future medical, healthcare, and custodial care when the award equals or exceeds $100,000. The court has the discretion to award periodic payment of other future damages. Periodic payments of future healthcare terminate upon the death of the recipient, although periodic payments of future damages do not. Attorney fees are calculated on the basis of present day value of periodic payments.
Proportionate Liability The law ensures that named defendants are only held responsible for the portion of fault attributable to them.
Statute of Limitations The statute of limitations for bringing a medical negligence suit is generally two years, however the new law now imposes an absolute deadline for bringing suit and any healthcare claim not brought within 10 years is barred.
Settlement Offers Litigation costs are shifted when a plaintiff refuses a pretrial settlement offer if the plaintiff’s award judgment is less than 80 percent of the defendant’s settlement offer.
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Wisconsin and Pennsylvania: Very Different Experiences
Much has been said about the beneficial impact that California’s Medical Injury Compensation Reform Act, or MICRA, has had in holding down professional liability insurance premiums. But California is not the only state that can boast this success. Others, including Indiana, Louisiana, and Wisconsin, have comprehensive medical liability reform laws on the books, and these too have proven effective in stabilizing premiums. A comparison between two states-Wisconsin, which had reforms in place, and Pennsylvania, which has not enacted meaningful tort reform-illustrate the beneficial effects that these reforms do indeed have.
Over the past several years, physicians in Pennsylvania have experienced significant increases in liability insurance premiums, while rates in Wisconsin have remained stable. Data collected by the Medical Liability Monitor and analyzed by the AMA is shown in the table “A Comparison of Liability Premiums in Wisconsin and Pennsylvania.”
Katie O. Orrico, JD, is director of the AANS/CNS Washington Office.
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