New Bills Address Rising
Malpractice Premiums
August 9, 2002- New legislation designed to reform
the medical liability system has been introduced by Senator
John Ensign (R-Nev.) (S.
2793) and Representative Max Sandlin (D-Texas) (H.R.
5253).
Sen. Ensign's legislation was introduced July 25 and is
the Senate companion to the AAMC-supported "Help Efficient,
Accessible, Low-Cost, Timely Healthcare Act (HEALTH Act) (H.R.
4600). The bill caps awards for non-economic damages at $250,000,
disallows joint and several liability, and limits attorneys'
contingency fees. S. 2793 also caps awards for punitive damages,
permits payment of large awards over time, establishes statutes
of limitations, and addresses collateral source benefits.
In July, the Bush Administration released a report that supports
the medical liability reforms outlined in S. 2793/H.R. 4600
[see Washington Highlights,
July 26].
Rep. Sandlin's bill, the "Medical Liability Insurance Crisis
Response Act of 2002" was introduced on July 26 and would
control rises in premiums by reforming the insurance industry's
business practices. H.R. 5253 permits the application of anti-trust
laws to the malpractice insurance industry, mandates guaranteed
renewals and coverage for physicians with zero claims over
the past 3 years, and forces any company that discontinues
its malpractice product in a certain market to discontinue
all lines of business in that market. The Sandlin bill would
temporarily freeze premiums until a newly established "Advisory
Commission on Medical Malpractice" examines the causes and
potential solutions to rapidly rising liability premiums.
H.R. 5253 would require malpractice insurers to file its annual
business statements with HHS. Insurers would also be required
to work with HHS in establishing a web-based system that generates
premium quotes for inquiring providers.
In addition, H.R. 5253 mandates mediation (non-binding)
before any action goes to trial. It requires plaintiffs, before
they file a claim, to produce affidavits certifying meritorious
cause for action. The "pre-certification" process would require
consultation with qualified healthcare specialists (eg, a
physician board certified in the specialty under consideration).
The bill includes provisions that address the nursing shortage
and establish "prompt-pay" guidelines/penalties for group
health plans.
With one exception (allowing payments of large awards over
time), H.R. 5253 does not include any of the provider protections
contained in H.R. 4600.
Information:
Christiane Mitchell, Senior Legislative Affairs Manager
AAMC Government Relations
cmitchell@aamc.org
(202) 828-0526
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