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Washington-Is it political grandstanding by Republican senators? Is it an effort to make Senate Democrats look bad? Is it a shot at genuine and fair “reform,” or is it “Let the consumer be damned?” Like the proverbial phoenix rising from the ashes, medical malpractice liability legislation soon will be on the Senate floor. And the answer to each of the questions above is yes and no. “I think it’s an issue Republicans have a political advantage on,” said Ted Frank, director of the Liability Project at the American Enterprise Institute, a conservative think tank based in Washington. “There’s incentive to bring it up in that sense. I think it’s something the Bush administration thinks they can win on and if they don’t win, they can make political hay of it.” Two medical malpractice bills, expected to go directly from introduction to the Senate floor during “Health Week” this month, will not go through the usual committee process of hearings, amendments and committee vote, because “they would never pass” out of committee, said Jillian Aldebron, legislative counsel to Public Citizen, a consumer watchdog group. “This is purely political grandstanding,” she said. “[Senate Republican leaders] want to say Democrats, who oppose the bills, are obstructionists. Right now it makes good talking points, good campaign politics. I can’t see it going anywhere. But who knows?” Supporters of medical malpractice liability legislation are trying to overcome what has been the biggest hurdle to enactment in the Senate-caps on noneconomic damages, said Victor Schwartz of the Washington office of Kansas City, Mo.-based Shook, Hardy & Bacon and counsel to the American Tort Reform Association, which supports medical malpractice liability legislation. “If there is very strong support from the public, votes change,” he added. “But the current picture is they still have that big mountain to climb.” Latest version of the bills But Schwartz and others who have lobbied for years on behalf of those changes believe that Senate supporters are moving higher up that mountain with their latest version of medical malpractice liability reform. At press time, the two bills still had not been introduced in the Senate, but The National Law Journal obtained working drafts that show that the model for federal legislation is no longer California’s law, but Texas’ law, which was passed in 2003. The bills also contain many features of earlier measures. They have limits on attorney contingency fees: 40% of the first $50,000 recovered; 33 1/3% of next $50,000; 25% of next $500,000, and 15% of any amount larger than $600,000. They also have time limitations on filing suits, requirements for expert witnesses and caps on punitive damages: two times the amount of economic damages or $250,000, whichever is greater. The fee limits apply regardless of whether recovery is by judgment, settlement, mediation, arbitration or other form of alternative dispute resolution. “The bill has a lot of good ideas in it and it’s one that’s worth the time and effort of the Senate,” said Schwartz. “They took a step forward by having some flexibility in the cap.” The main bill is S. 22, sponsored by Senator John Ensign, R-Nev., and styled “The Medical Care Access Protection Act of 2006.” The second bill, S. 23, sponsored by Senator Judd Gregg, R-N.H., and styled “Healthy Mothers and Healthy Babies Access to Care Act of 2006,” has identical provisions, but is limited to obstetrical and gynecological services. Under the bills, physician liability for noneconomic damages would be capped at $250,000, regardless of the number of physicians found liable. A health care institution’s liability would be limited to $250,000 or up to $500,000 if more than one is held liable. The total amount of noneconomic damages that could be awarded would be $750,000. Is cap misleading? Public Citizen, the Alliance for Justice, USAction and other consumer watchdog groups involved in the debate contend that the $750,000 cap is misleading. In a letter last week to all senators, the groups cite a recent study of closed medical malpractice claims reported to the Texas Department of Insurance over the period 1988 to 2002. The study found that 79.5% of claims named one or more physicians, 45.2% of claims named a hospital, and 9.7% of claims involved more than one hospital. “Thus, in more than half of all claims, potential compensation for noneconomic damages would be capped at no more than $250,000,” they conclude. And the groups also dispute claims that the caps have resulted in lower insurance rates. “Once the cap passed, instead of reducing premiums, major insurers petitioned the Texas Department of Insurance for rate hikes of up to 35% for doctors and 65% for hospitals,” the letter claims. “Only after an outraged Texas legislature threatened to mandate rate cuts did insurers lower medical malpractice premiums.” Without that kind of political pressure, rates never go down, said Public Citizen’s Aldebron. She added that rates across the country have stabilized, in states with and without damages caps. The Texas law has had an impact on some patients’ ability to get legal representation for their claims, Aldebron said. “That is one of the dirty secrets of caps. The ultimate goal of caps is to wipe out cases.” But Frank of the American Enterprise Institute, echoing other supporters of caps, said that “Unbounded noneconomic damages create all sorts of perverse incentives. It’s a huge random element that is the opposite of justice.” He and Christian Shalgian, chairman of the Health Coalition on Liability & Access, agreed that Texas experienced real results from its reforms after it enacted a constitutional amendment in 2003 protecting those reforms from legal challenges. Frank said that he would like to see something similar in the federal legislation. In a recent article attacking his opponents’ argument that rate stability has undercut the need for liability reforms, Frank said that the question is whether this is a “fragile stability” or something more permanent. “But given the evidence from the past, one cannot conclude the crisis is over and that the markets are stable, much less that liability reform was or will be a waste,” he said.

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