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Texas Gov. Rick Perry’s prescription for the escalating malpractice insurance crisis that Texas doctors claim they face includes a $250,000 cap on non-economic damages. Perry unveiled a number of proposals for addressing the medical-malpractice problem on April 4. Most would require action by the Legislature, which will meet again in January 2003. The governor released his proposals four days before physicians in Corpus Christi, Edinburg and several other Texas cities staged a “walkout” to draw attention to the impact they claim medical-malpractice suits have on their insurance rates and the availability of health care. The Corpus Christi Caller-Times reported that about 300 people, some dressed in hospital whites and scrubs, showed up for an April 8 news conference at the Nueces County Courthouse. Some attendees at the news conference toted signs that read: “Stop lawsuit abuse,” and “You can live without your lawyer, but can you live without your doctor?” Any limit on non-economic damages in medical-malpractice cases must pass muster with the Texas Supreme Court, which threw out a cap enacted by the Legislature in 1977 as part of a comprehensive reform package that responded to a medical liability insurance crisis of that era. Rocky Wilcox, general counsel for the Texas Medical Association, says state lawmakers set a $500,000 cap in 1977 that was to be adjusted for inflation. In a 1988 decision, the state’s highest civil court ruled in Lucas v. United States that the cap in Texas Medical Liability and Insurance Act � 4590(i) violated the “open courts” doctrine in the state Constitution. “[Perry] believes that a law can be written that passes constitutional muster,” says Kathy Walt, the governor’s press secretary. Wilcox says that to be constitutional, the legislation would have to provide a “quid pro quo” for patients. One way to ensure patients receive something in return if a damages cap is enacted is to require physicians to carry medical liability insurance. “By ensuring that some pot of money’s there, if negligence occurs, that’s the quid pro quo,” Wilcox says. Walt says there are other ways to enact a limit on damages, including asking voter approval for a constitutional amendment. “This is all for legislative debate,” she says. “There will be a number of options on the table. The governor’s office isn’t endorsing any one over the other.” Wilcox says the Texas Supreme Court has held that the Legislature has a right to decide the limits to a remedy it has created by statute. In 1990, the court ruled in Rose v. Doctor’s Hospital that the open courts provision in the state Constitution did not block application of caps in wrongful-death cases. The court held that the remedy for the plaintiff in Rose was conferred by statute, not common law, when the wrongful-death law went on the books in 1986. According to the governor’s office, more than 20 other states have lowered liability insurance rates by capping non-economic damages. Perry says that if elected in November, he’ll urge the Legislature to follow the example set by those states when it meets in 2003. Plaintiffs’ attorneys say that imposing such a cap would hurt those harmed the most by a physician’s negligence without affecting the rates doctors have to pay for liability coverage. “Caps only affect truly injured people,” says Texas Trial Lawyers Association President Jack McGehee, a Houston attorney who specializes in medical-malpractice litigation. “It’s absolutely false to say enacting caps would be a solution to rising malpractice premiums,” says Tommy Jacks, a partner in Mithoff & Jacks in Austin, Texas. Roger Hughes, who defends health care providers when they’re sued, says caps would “help some” and would not prevent people from filing medical-malpractice suits. Hughes, a partner in Harlingen, Texas’ Adams & Graham, says Texas Civil Practice and Remedies Code � 101 caps damages in tort claims against governmental entities and has not prevented the pursuit of such claims. “I don’t think caps on damages will discourage people from filing those suits or mean they won’t get high-quality lawyers [to represent them],” he says. George Brin, who also represents doctors in medical-malpractice cases, says capping non-economic damages is probably a good idea but the proposal to set the cap at $250,000 is likely to draw opposition because it would result in “unfair outcomes” for some people. If a patient has suffered catastrophic damages as the result of being paralyzed by a physician’s negligence, $250,000 is too low, says Brin, with Brin & Brin in San Antonio. “Although I’m a defense lawyer and generally feel that a lot of claims I handle are without merit, some of them have merit,” he says. “Malpractice does happen.” If a cap is set, Brin says, it should not be $250,000, and the Legislature should provide for exceptions so that the plaintiff’s injury can be considered. Perry’s other legislative proposals include: � Designating special trial courts or judges to hear medical-malpractice cases. Special courts have been designated in some counties to hear probate, family law, juvenile and criminal matters; � Limiting plaintiffs’ attorneys’ contingent fees; � Expanding lawsuit immunity to protect physicians who provide health care to low-income or indigent patients under state contracts; and � Requiring future damage awards to be paid periodically rather than in lump-sum amounts. Brin says that having special courts or judges designated to handle medical-malpractice cases would help because of the “incredible complex medical issues” that some claims involve. Judges with specialized knowledge about the issues would be better able to consider in summary judgment proceedings the affidavits submitted by parties in support of their medical position, Brin says. In addition, he says, a judge with medical expertise could better determine whether a medical expert’s opinion meets the requirements of the 1993 U.S. Supreme Court decision in Daubert v. Merrell Dow Pharmaceuticals or the Texas Supreme Court decision in E.I. du Pont de Nemours and Co. v. Robinson (1995). STOCK MARKET LOSSES An April 4 report by Texas Watch, a consumer advocacy group, shows the number of claims filed in Texas fluctuates, peaking in 1995 when 5,396 claims were filed. The group reported the number of claims went from 5,333 in 1999 to 4,501 in 2000, the most recent year for which statistics are available. Broadus Spivey, president of the State Bar of Texas, says physicians’ negligence prompts claims to be filed. “You’re never going to solve the malpractice crisis until you solve malpractice itself,” says Spivey, of Spivey & Ainsworth in Austin. Spivey and other members of the plaintiffs’ bar contend that the escalation in medical-malpractice insurance premiums is the result of insurance companies’ losses in the stock market, not suits. “All insurance rates are going up,” says McGehee, a partner in Houston’s McGehee & Pianelli. In its April 4 report, Texas Watch said that St. Paul Cos., which recently pulled out of the Texas market, lost $37.5 million on medical-malpractice payouts in the state but lost $108 million because of the Enron Corp. crash. The Texas Watch report appears to be based on a Dec. 4, 2001, announcement by the insurance company. In a news release, St. Paul Cos. said its aggregate limits of insurance exposure related to Enron was approximately $85 million and that it held about $23 million of Enron’s unsecured debt. The insurer indicated in the release that it expects its losses to be “significantly less” than its aggregate limits. Tom Hancher, president of the Texas Medical Association, says insurers’ stock market losses may be a part of the problem. “But that’s certainly not the reason we’ve reached a crisis,” says Hancher, who specializes in internal medicine and geriatrics in Columbus, Texas. The malpractice claims are a big factor, he says. “It’s getting a lot more expensive to defend these cases, not less expensive,” Hughes says, noting that a health care provider must mount a defense, even if a claim is without merit. Plaintiffs’ attorneys say the malpractice cases are expensive for them to prepare and that they don’t file claims without investigating them thoroughly. A lawyer “has to be prepared to spend well into six figures out of his own pocket,” Jacks says. Section 4590(i) requires a plaintiffs’ lawyer to post a $5,000 bond for each defendant named in a suit. Under the same section, the attorney has 180 days after suing to file a medical expert’s report that details the claim. If the report fails to meet the requirements, the trial court is required to dismiss the suit with prejudice and require the plaintiff to pay the defendant’s attorney fees, Jacks says. But Hughes says some judges don’t strictly enforce the deadline for those reports and accept reports that are insufficient, leaving the door open to plaintiffs’ lawyers who may not investigate claims thoroughly before filing suits. He says midlevel appellate courts have disagreed whether interlocutory appeals can be filed to challenge a trial judge’s decision on an expert’s report, and the Texas Supreme Court has not considered the issue. Hughes says malpractice claims against doctors not only affect their insurance rates, but also their right to practice in some hospitals. He says the claims go on doctors’ records and can be a factor when they apply for staff privileges at hospitals.

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