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The legislative package of the American Medical Association (AMA) aimed at limiting suits against doctors and hospitals has been unusually successful this year. Parts of it passed in more state legislatures in 2003 than in all previous years combined. But the states jumping aboard the medical liability “tort reform” bandwagon are learning what others already knew. As lawyers rush to beat deadlines, the legislation causes a surge in the suits that it was designed to stop. Seven states-Arkansas, Delaware, Florida, Idaho, Oklahoma, Texas and West Virginia-have just adopted some of the tort law changes pushed by organized medicine. Most have gone into effect since mid-August. Interviews with court officials and news accounts suggest that attorneys in those states have been filing all the suits they can before the deadline. In Houston, for example, Charles Bacarisse, clerk of the district court in Harris County, reported a 500% increase in the number of civil suit filings, some 2,700 in the weeks before Sept. 1, when the new Texas laws became effective. Texas newspapers reported similar surges in Dallas and Corpus Christi, as did the media in Little Rock, Ark.; Orlando, Fla.; Charleston, W.Va.; and Oklahoma City. In the long run, plaintiffs’ lawyers predict, the legislation will reduce the number of suits filed but increase the likelihood that a suit filed will ultimately be tried, not settled. A rush to the courthouse has been the experience in Mississippi and Nevada, which adopted parts of the doctors’ package in 2002, to the frustration of some supporters. “There certainly has not been, to this point, any positive reaction that we have seen from the passage of this law,” said Larry Matheis, executive director of the Nevada State Medical Association in Reno, Nev. He predicted an increase in the cost of malpractice that his state’s law was designed to curtail. “What we expect to see now, probably, is a new round of rate increases based on frequency of claims,” he said. More medical negligence actions were filed in the three months after Oct. 1, 2002, when Nevada’s damage caps went into effect, than in any previous full year. For all of 2001, 372 med-mal suits were filed, compared to 437 from October to December 2002. This year, 546 medical negligence suits have been filed through August. Matheis said he should not have been surprised at the surge in new filings. California experienced the same thing when, in 1975, it became the first state that passed such legislation, called the Medical Injury Compensation Reform Act (MICRA). Why run to court? The states’ laws are written to apply to injuries suffered after the effective date. But California showed that ambiguities involving the dates of injuries, the dates that injuries are discovered and statutes of limitations inevitably go to appellate courts, he said-meaning the safest rule is to file before the law takes effect. “It took California a decade or two, and a lot more legislation, to stabilize,” Matheis said. The AMA has based its package on MICRA and its progeny. The medical association recommends actions such as: • Limiting damage awards. • Eliminating joint and several liability. • Peer review of negligence claims. • Limiting plaintiff contingency fees. • Allowing the admission of evidence at trial of collateral sources of payments to plaintiffs. • Tightening qualifications on expert testimony. • Extending deadlines for insurers to offer settlement. • Banning the requirement that damage awards be paid in lump sums. One problem, Matheis said, is that legislators are not likely to pass such a sweeping and controversial package. So proponents trade some proposals to get others. In Nevada, doctors opted to drop a review panel to weed out weaker claims in exchange for a $350,000 cap on noneconomic damages. Matheis now sees such compromises as opportunities for trial lawyers to maneuver around reforms and file more suits. “This problem is so complex that passing partial legislation could very well lead to prolongation of the crisis. “It’s an experience we’re certainly learning from,” said Matheis, who is preparing that state’s next round of medical liability legislation. The AMA referred a reporter to its president, Donald J. Palmisano of Metairie, La., who did not return calls. Mississippi also reported increased medical malpractice litigation after damage caps were adopted. The law went into effect on Jan. 1, 2003. Its circuit courts reported that 469 medical negligence actions were filed in December 2002, about 18% above normal, according to the state’s Administrative Office of the Courts. More tellingly, perhaps, is that one-third more than usual of those suits are still pending after nine months. For instance, of 90 med-mals filed in Hinds County Circuit Court, which serves one of every 10 Mississippians, 60 were pending on Sept. 24. Figures from previous years indicate that only 44 formerly would have remained active after nine months. The numbers point to the possibility that one-third more suits will be tried than in previous years. Several plaintiffs’ lawyers said that the new laws favoring defendants reduce the motivation to settle. As they looked to the future, they foresaw a shift in their practices, with fewer cases being filed and a higher percentage of them going to trial. Joseph Taraska, head of the medical malpractice department at Jacobs & Goodman in Altamonte Springs, Fla., said that insurers historically have waited the statutorily prescribed time period before beginning settlement negotiations. Florida extended that time period from 90 days to 270 days. Nine months will pass, not three, before insurers make any effort to settle, said Taraska, who spent 25 years representing malpractice insurers before shifting to the plaintiffs’ side. During the additional half-year, plaintiffs have no choice but to continue preparing their cases, with all the attendant costs. The delay and the damage caps mean a case can cost almost as much in expenses as the clients can expect to win, Taraska said. “So now I’m put in the position of judging that if the damages are low, if we’re talking about a housewife or a child, and the injury is significant, I want to be very, very sure on the liability picture because I know I’m going to have to try it,” said Taraska. Twice the usual His firm filed 20 suits-about twice the usual number-during the week before Florida’s new law went into effect on Sept. 15. Tommy Jacks of Austin, Texas’ Mithoff & Jacks, said, “You’re certainly not doing the client any favors to run up $100,000 to $150,000 in expenses on a $250,000 possible recovery.” August was a “lousy month” as Jacks’ firm scurried to gather records and affidavits necessary to file proper med-mal petitions under Texas’ old law, which allowed for far larger damage awards, he said. Despite his “working a little harder, a little faster” to beat the Texas deadline, Jacks said, the medical liability changes offer new opportunities for lawyers willing to streamline their work and develop efficiencies that lower the costs. “What we saw in California, say, and Louisiana, for another example, was a niche developed by some lawyers who accepted certain kinds of cases at less expense and created enough volume to make the practice profitable,” said Jacks. Those states also showed an increase in med-mals going to trial, which changed the dynamics of case preparation and allowed younger, less expensive, attorneys to gain trial experience, he said. “These cases are complicated enough that I don’t see it lending itself to mass production that you have seen in, say, auto tort cases,” Jacks said. But lawyers can do things such as, instead of lining up a slew of experts, they can develop relationships with just a few, which may lower costs, he said. Plaintiffs’ counsel spend an average of more than $100,000 litigating a medical malpractice case, Jacks said. Costs include gathering medical records and having experts review the records to determine if negligence occurred. Those costs usually come before suit is filed. Even under the old law, plaintiffs had to produce an affidavit from an expert attesting that the alleged action breached an acceptable standard of care. Out-of-pocket expenses pay for research into how the negligence occurred, what should have happened, travel, depositions and exhibit production. Scrutinizing client Efficiencies can be realized at each step, Jacks said. But the primary impact will be on the lawyer’s decision on whether to accept a new client. The laws passed in the seven states during 2003 place limits on noneconomic damages-losses not tied to a specific invoice, such as mental anguish or disfigurement or pain and suffering. Therefore, lawyers say, they will more carefully scrutinize plaintiffs with fewer documented damages, such as housewives, children and the elderly who can make no claim for lost wages. “We have to evaluate, do a risk-management analysis,” said John W. Frost of Bartow, Fla.’s Frost Tamayo Sessums & Aranda. His firm looks at 20 claims per week and now takes just one. “Those that are closer on the liability and don’t have the economic damages- cases we may have taken in the past, we won’t take in the future,” Frost said. “But under this new law, I predict, we’ll end up taking more of the cases we do take to trial. Really, we’ll have no other choice.”

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