After promising start, malpractice reform seems bogged down

WASHINGTON–When it comes to health care policy, there isn’t much that brings the two parties together. But at the outset of the 112^th Congress, it seemed like medical malpractice reform was one area ripe for bipartisan compromise.

In his State of the Union address, President Barack Obama signaled a willingness to work with Republicans on the issue, saying curbing frivolous lawsuits against doctors could help bring down medical costs. House Republicans made it a top priority, holding a hearing on the issue within days of taking power.

And just last week, a key House committee approved a GOP bill to cap non-economic and punitive damages in medical lawsuit awards, teeing the issue up for a full House vote. But even with all the talk and action, supporters and opponents alike say the prospects for a meaningful legislative deal on such a contentious issue is bleak.

“It’s not inconceivable,” said Darren McKinney, a spokesman for the American Tort Reform Association, a lobby group that has long advocated for limiting jury awards in lawsuits against doctors. But at best, he said “it’s a crapshoot.”

Take, for example, the fate of a seemingly modest proposal to provide $50 million in demonstration grants to the states to develop and implement initiatives that would reduce medical-related lawsuits–a provision included in the sweeping federal health care reform law.

Ken Ferrucci, a lobbyist with the Connecticut State Medical Society, said CSMS was so eager for Connecticut to apply that he and others lobbied three different state entities–all of which said they didn’t have the staff or resources to pursue the funds.

No matter: The initiative withered earlier this year anyway, after Congress nixed funding for the program. In the 2011 budget agreement recently hashed out between the White House and congressional Republicans, those medical malpractice grants were zeroed out. If lawmakers can’t agree to offer states incentives innovate in this arena, more sweeping federal legislation seems like truly tough sell.

Medical malpractice reform has long been a politically dicey issue, touching on patient safety and legal rights on the one hand and “junk lawsuits” and defensive medicine on the other.

The Institute of Medicine has estimated that as many as 98,000 patients die every year as a result of medical mistakes, and getting compensated for injuries is usually not an easy or quick process.

On the other hand, doctors say the fear of getting sued forces them to practice defensive medicine, ordering more tests than necessary and not being as transparent or effective as they could be in caring for patients. Physicians also often face crushing malpractice premiums, an issue that’s particularly relevant in Connecticut, where doctors pay some of the highest insurance rates in the country.

Some Democrats have called for a new arbitration system that handles patients’ claims through negotiation instead of a lawsuit. Republicans have long pushed limits on damage awards as a way to reduce meritless lawsuits.

The House Republican bill, approved in committee on May 11, would:

• limit non-economic damages in medical malpractice suits to $250,000
• cap punitive damages at twice the amount of economic damages awarded, or $250,000, whichever is greater
• ban punitive damages unless a provider acted “with malicious intent or deliberately failed to avoid injury”
• create a “sliding scale” for attorney’s contingency fees, thus limiting lawyers’ share of any damages awarded to a patient

Republicans said the measure, which has also cleared the House Judiciary Committee, would help reign in spiraling medical costs. They point to a Congressional Budget Office analysis, which said that similar reform proposals would reduce federal health care spending by as much as $62 billion.

“The medical liability system in this country is not a system at all,” Rep. Fred Upton, R-Mich., the Energy and Commerce Chairman, said in a statement after last week’s vote. “It is a fragmented patchwork of policies that jeopardize access to care and impose added costs to the American people and their government, through Medicare and Medicaid.”

Democrats said the measure was a sop to big insurance companies and would leave injured patients with limited legal recourse. And it would override many state medical malpractice laws.

If passed, the bill would preempt medical malpractice reforms in Connecticut and other states, said Michelle C. Widmann, a spokeswoman for the American Association for Justice, a trial lawyers lobby group, “and replace them with a ‘Washington knows best’ one-size-fits-all $250,000 cap on non-economic damages.”

She noted that the cap applies not just to cases where doctors are negligent in providing care, but also to the makers of defective medical devices or bad drugs, to nursing homes where residents are abused, and to insurers that refuse to pay medical claims.

A fierce lobbying battle has already erupted over the bill. The American Medical Association last week launched an ad campaign, touting the bill as a “common-sense” measure that will reduce baseless lawsuits, while protecting patients’ legal rights.

“The current medical liability system fails both patients and physicians – it hurts the quality of patient care and costs the nation billions,” reads the AMA ad, which is running in Capitol Hill news outlets.

The trial lawyers’ advocacy group, meanwhile, has started targeting Republicans and one Democrat on the Energy and Commerce Committee who supported the measure, sending press releases to outlets in their home districts blasting the bill.

Pointing to the Institute of Medicine statistics on patient deaths from medical errors, the AAJ says that Congress should focus on improving patient safety, not providing “welfare” to drug and insurance companies that fail to provide high-quality care.

The GOP bill would “take away the rights of injured patients, remove incentives to improve safety and leave more people at risk for more injuries from negligent care,” Gibson Vance, AAJ’s president, said in a statement when the bill was first unveiled. 

McKinney, of the tort reform lobby group, predicted the bill will sail through the House and stall in the Senate.

“Richard Blumenthal isn’t going to vote for it and I can name dozens of other mostly Democratic senators who won’t either,” he said. Too many Democrats are “beholden to the personal injury bar,” he said, for any significant tort reform bill to pass.

Blumenthal said he had not reviewed the House legislation. But he sharply rejected the suggestion that he would oppose medical malpractice reform because of contributions from trial lawyers, who are generally reliable Democratic campaign contributors.

“This decision, speaking for myself, will be made on the merits,” Blumenthal said.

“This issue is one where the details are really important,” Blumenthal added. “I’m going to want to look at the proposals before I take a position on the specifics of any one of them.”

He said he hasn’t heard any rumblings about a medical malpractice reform bill coming up the Senate Judiciary Committee, on which he serves. But he praised the approach embraced by the Obama Administration of giving grants to states to experiment with alternatives to litigation. “We need to evaluate what’s been done and what more could be done,” Blumenthal said.

Even though the Administration didn’t win funding for those grants in the 2011 budget, the federal Department of Health and Human Services recently launched a similar initiative–soliciting grant applications from states and other entities for projects that aim to reduce preventable injuries, cut liability premiums, and foster better communications between doctors and their patients.

As with the last round, however, this HHS announcement doesn’t have any committed source of funding; it is contingent on Congress agreeing to allocate money for such grants. And for now, at least, Republicans don’t seem to eager to embrace that approach.

“That’s wasted money,” said Sen. John Cornyn, R-Texas, who also sits on the Senate Judiciary Committee. Cornyn said states can experiment on their own, without federal help. Congress needs to enact hard-core lawsuit limits, he said, and provisions like one that recently passed the Texas state assembly, requiring losing plaintiffs to pay the legal fees of those they sued.

“We already know what works,” Cornyn argued. “The question is whether we have the political will and the votes to make it happen.”