Kaiser Daily Health Policy Report Examines Medical Malpractice Insurance Developments in Five States

The Kaiser Daily Health Policy Report today highlights developments related to medical malpractice insurance in five states. Summaries of the developments appear below.

• Florida: State Senate President Jim King (R) on June 24 sent members home from a special session three days early after Gov. Jeb Bush (R) announced he that would call more special sessions this summer to pass a malpractice reform bill, the Miami Herald reports. State lawmakers could not resolve differences in state House and Senate malpractice reform bills (HB 55B and S2-B) in the regular legislative session, which prompted Bush to schedule the special session. The House bill, which Bush supports, would cap noneconomic damages in malpractice lawsuits at $250,000; the Senate bill would cap noneconomic damages in malpractice lawsuits at $1.5 million in most cases but would allow patients who experience medical errors that result in death or brain damage to receive as much as $6 million. Negotiators from the state House and Senate said that they have reached compromises on about one-third of the differences between the two bills, such as provisions that would establish new rules for physicians who commit medical errors, mandatory malpractice insurance rate decreases and new limits on compensation for patients who experience malpractice. King said that a state Senate staff analysis found that on most issues, the bills "are more closely aligned than either are with the governor's proposal," the Herald reports. State House Speaker Johnnie Byrd (R) said that he would tell members to return home until the state Senate "moves closer to the governor's bill" (James, Miami Herald, 6/25). Meanwhile, physicians in the state said that they may have to close their offices and move to other states in the event that the state Legislature does not pass a malpractice reform bill (Royse, AP/Miami Herald, 6/26).
  
• Mississippi: The Mississippi Hospital Association has announced plans to partner with more than 20 hospitals in the state to establish a malpractice insurance company to provide coverage to hospitals and their medical staffs, the AP/Jackson Clarion-Ledger reports. MHA President and CEO Sam Cameron said the group hopes to license the new company, called Healthcare Providers Insurance, by July 1 (AP/Jackson Clarion-Ledger, 6/26).
  
• New York: The state Legislature, in an agreement with Gov. George Pataki (R), last week passed a bill that will alter the way jury awards in malpractice cases are paid out, the New York Times reports. Previously, jury award payments in medical malpractice cases were determined in a "structured judgment." The existing law stated that a jury would determine damages year-by-year for the life of the award. A judge would then determine the average annual payment, reset the first year's payment to the average payment and then increase that amount by 4% each year to account for inflation. However, the law did not preclude juries from applying inflation adjustments to its award -- which could "greatly inflate" the award -- or prevent plaintiffs' lawyers from encouraging juries to apply their own inflation. As a result, many juries calculated their own inflation rates and the judge would calculate inflation a second time. The legislation passed last week means that judges will no longer reset the original jury award and calculate inflation. In addition, the law calls for 35% of long-term medical costs to be paid in an initial lump sum; previously no long-term medical costs were paid in an initial sum. The law also increases to $500,000 from $250,000 the amount in damages for pain and suffering that can be awarded as a lump sum and requires any noneconomic damages beyond the lump sum to be paid over eight years, rather than 10. The new law also states that yearly payments for medical costs will continue as long as the plaintiff lives; under the previous law, patients could outlive their awards (Perez-Pena, New York Times, 6/23).
  
• North Carolina: The Raleigh News & Observer on June 25 looked at lobbying efforts -- including ads, rallies and campaign mail -- related to the state General Assembly's consideration of legislation to cap malpractice awards for pain and suffering at $250,000 and whether to limit lawyers' fees in malpractice cases. For example, the state Academy of Trial Lawyers has a team of eight lobbyists advocating against the caps on fees and awards, while the North Carolina Medical Society and North Carolina Hospital Association, a group representing hospitals, have a "main group" of approximately twelve lawyers pushing for the restrictions. In April, state doctors held rallies in Raleigh followed by meetings with members of the Senate select committee in their districts. In addition, the medical society gives physicians brochures to distribute to patients that say doctors have reduced services and that the state might lose young doctors. The North Carolina Coalition for Patients' Rights, a group of trial lawyers and advocacy groups for seniors, has arranged meetings among legislators, patients and staff members of Senate and House leaders (Bonner, Raleigh News & Observer, 6/25).
  
• Pennsylvania: Gov. Ed Rendell (D) on June 24 told the state insurance commissioner to postpone for a second time this year the collection of physicians' and hospitals' malpractice payments to a state-operated excess liability fund called MCARE, the Philadelphia Daily News reports. The action will postpone payment until Aug. 1 for about 40% of the state's physicians whose policies are slated for renewal July 1 (Hinkelman, Philadelphia Daily News, 6/25). Earlier this month, Rendell promised to provide $600 million in relief through 2005 to help providers pay for malpractice insurance, but so far, he has not found a source for funding (Kaiser Daily Health Policy Report, 6/11). Kate Philips, a spokesperson for the governor, said funding questions will not be resolved until legislators approve a new state budget (Philadelphia Daily News, 6/25). Meanwhile, Pennsylvania Supreme Court Chief Justice Ralph Cappy on June 23 unveiled a three-step plan to expedite Rendell's medical malpractice proposal, the Philadelphia Inquirer reports. Cappy proposed that Supreme Court Justice William Lamb develop a voluntary mediation program, which could be implemented through changes to state rules. He also launched an effort to collect data on the state's malpractice lawsuits to help policymakers gain a better understanding of the scope and nature of malpractice litigation. Cappy also convened a group of four lawyers who will work under Allegheny County Common Pleas Court Judge R. Stanton Wettick to examine the aspects of Rendell's plan that would require rule changes by the court; the group will specifically study the possibility of introducing limits on plaintiff lawyers' contingency fees and developing guidelines for judges to use when considering whether to reduce large noneconomic damages awards (Goldstein, Philadelphia Inquirer, 6/24). In related news, noneconomic damage caps and using the court system to resolve medical injury cases could disproportionately effect malpractice awards received by young workers and women, according to a paper released this month as part of an ongoing two-year study by the Pew Charitable Trusts' Project on Medical Liability in Pennsylvania, the Pittsburgh Post-Gazette reports. According to Maxwell Mehlman, director of the Law-Medicine Center at Case Western Reserve University School of Law in Cleveland and the paper's author, using the court system to resolve the malpractice cases is overly expensive because of lawyers fees; unfair because lawyers may not take worthy cases if anticipated awards will not cover attorney costs; and "may actually hurt efforts to prevent future mistakes" because it focuses blame on individuals, which discourages providers from reporting mistakes and enacting broad institutional reforms, the Post-Gazette reports (Snowbeck, Pittsburgh Post-Gazette, 6/23).