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• Medical Liability Reform

• Other Legal Reforms

• Insurance Modernization

• Patient Safety

House of Representatives - Floor Action

The House of Representatives passed comprehensive medical liability legislation (H.R. 5) by a vote of 230-194 (with two Members voting "present") on July 28, 2005.  This marked the tenth time in 11 years that the House passed effective medical liability reform legislation.  On the most recent vote, 14 Democrats crossed party leaders and voted for H.R 5, while 9 Republicans voted against the bill.

The bill, also known as the Help, Efficient, Accessible, Low-cost, Timely Healthcare (HEALTH) Act, was introduced by Cong. Phil Gingrey, M.D. (R-GA) and Cong. Lamar Smith (R-TX) on July21, and quickly moved through the House legislative process.  Identical to bills of the same name which passed in 2003 and 2004, the bill includes a $250,000 cap on non-economic damages, collateral source rule reform, a sliding scale for lawyers contingency fees, and a 3/1 statute of limitations.

While PIAA supported the bill, we opposed changes to the periodic payment provision that had been in the previous Congress' version of the bill and carried forward to this version.

House of Representatives - Committees

House Committees were quite active on this issue earlier in the session.  On February 17, 2005, the House Committee on Small Business, chaired by Cong. Donald Manzullo (R-IL), conducted its own hearing - "Medical Liability Reform: Stopping the Skyrocketing Price of Healthcare."  PIAA President Larry Smarr testified at this hearing, sharing with committee members the effectiveness of California's MICRA reform and providing the latest data on the state of the medical liability insurance industry.  (See "Testimony" section of the website for Mr. Smarr's full written statement.)

Earlier, on February 10, 2005, the Health Subcommittee of the House Energy & Commerce Committee, led by its new chairman, Nathan Deal (R-GA), conducted a hearing entitled "Current Issues Related to Medical Liability Reform."

Senate - Floor Action

On May 8, 2006, the U.S. Senate voted on motions to end a filibuster of two different medical liability reform bills.  The two bills were identical except the first bill - the Medical Care Access Protection (MCAP) Act (S. 22) - applied to all health care providers, while the second bill - the Healthy Mothers and Healthy Babies Access to Care Act (S. 23) - applied only to those providing OB-GYN services.  The votes on the bills were 48-42 and 49-44, respectively.  Sixty votes were needed to proceed with consideration of these bills.  This marked the fifth time in the last four years that opponents of reform in the Senate blocked the opportunity for an up or down vote on the merits of medical liability reform legislation.

Taking a slightly different approach to medical liability reform, these most recent bills adopted the Texas model for caps on noneconomic damages - $250,000 per provider and $250,000 per institution (2 institutions maximum) - rather than the MICRA model  Other new provisions in the bills included expert witness standards and sanctions against lawyers who file frivolous lawsuits.

Senate - Committees

No hearings on MICRA-style medical liability reforms were held in the Senate during the 109^th Congress.  

Joint Economic Committee

On April 28, 2005, the Joint Economic Committee held a hearing entitled "Medical Liability Reform" to discuss the ramifications to the federal government of not fixing medical liability system.  Appearing as the sole witness was CMS Administrator Mark McClellan.  When asked about problems in the current system, the Administrator noted that half of all medical liability claims involve no negligence and that when negligence does occur, the system is burdensome and slow to provide restitution.

House of Representatives

Taking a relatively new approach to the medical liability crisis is H.R. 1546, the Medical Liability Procedural Reform Act.  Introduced by Cong. Mac Thornberry, the bill provides up to seven grants for states to create "health care tribunals."  These new courts would be presided over by judges with medical expertise, and would hear only medical liability cases.  In addition, the courts would use independent expert witnesses to help get to the facts in a case.

Focusing on a more narrow area of reform, Cong. Tim Murphy (R-PA) introduced the Community Health Center Volunteer Physician Protection Act, H.R. 1313.  This bill would include volunteer physicians/psychologists working in health centers under the auspices of the Federal Tort Claims Act, thus giving them a degree of immunity from medical Liability suits.

House of Representatives - Hearings

On July 13, 2006, the Health Subcommittee of the Energy and Commerce Committee held a hearing entitled "Innovative Solutions to Medical Liability."  This hearing looked at issues such as health courts - specialized courts featuring judges with specific knowledge of medical liability issues, independent expert witnesses, and a schedule of damages.  Also discussed were "early offers" programs (designed to bring quick settlements in cases of medical injury), "I'm sorry" legislation (which prevents a health care provider's expression of sympathy from being used as evidence in a medical liability case), and patient protection measures.  (See "Testimony" section of the website for a written statement submitted by the PIAA.)

Senate

Sen. Mile Enzi (R-WY) introduced the "Fair and Reliable Medical Justice Act," S. 1337 which would award grants to 10 states for the establishment of new demonstration projects.  The projects could be any one of three models referenced in the bill: Early Disclosure and Compensation (exempts a health care provider or organization from liability if the provider or organization promptly notifies the patient of an adverse event and makes a good faith offer of compensation); Administrative Determination and Compensation (allows states to create administrative boards to establish a schedule of compensation for avoidable injuries - mush like workers' compensation - which would not be subject to civil litigation); or, Special Health Care Courts (creates courts, presided over by judges with medical expertise, with exclusive jurisdiction over medical liability claims).

Sen. John Counyn (R-TX) subsequently stated that he intends to introduce legislative to establish health court pilot projects.  Details of the bills are apparently still being developed.

Joining with his PA colleague, Sen. Risk Santorum (R-PA) introduced the Community Health Center Volunteer Physician Protection Act, S. 1058, which is identical to the House bill of the same name.

Senate - Hearings

The Senate Health, Education, Labor and Pensions Committee held a hearing on "alternatives" to traditional tort reforms on June 22, 2006.  Entitled "Medical Liability: New Ideas for Making the System Work Better for Patients," the hearing focused primarily on the issue of health courts - specialized courts featuring judges with specific knowledge of medical liability issues, independent expert witnesses, and a schedule of damages - such as the demonstration programs included in Sen. Enzi's bill, S. 1337.  Limited discussion was also held on "early offers" (designed to bring quick settlements in cases of medical injury) and "administrative determination of compensation" (similar to workers' compensation) programs.

The House Financial Services Committee has been working on legislation to modernize and make more uniform the patchwork of state insurance regulations.  The most advanced proposal, dubbed the State Modernization and Regulatory Transparency (SMART) Act, although not yet introduced, would neither create federal charters nor assume federal regulatory control over insurance.  Instead, it would established nationally uniform standards for which state regulators would be responsible.  The PIAA has produced a summary of the discussion draft.

A hearing entitled "SMART Insurance Reform" was held by the Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises on June 16, 2005 to get further insight on the draft legislation.  While a panel of former insurance commissioners was quite favorable to concepts in the SMART ACT, the president of the National Association of Insurance Commissioners (NAIC) expressed substantial concerns about federal interference in the state regulatory process.  Questioning by Subcommittee members indicated a clear concern about the failure of the NAIC to more strongly pursue national uniformity in insurance regulations, while the issue of price deregulation also appears very contentious.

The PIAA is concerned that the SMART ACT discussion draft exempted medical liability insurance from its price deregulation provisions, thus treating this line of insurance differently from other professional liability lines.  The PIAA is lobbying to ensure that the SMART Act treats all professional liability lines of insurances equally under any regulatory reform provisions.  To begin, the attached letter (sent 1/4/2005) has been delivered to all members of the Financial Services Committee.  Subsequently, another letter (sent 5/24/2005) was sent to Committee Chairman Michael Oxley (R-OH) to reiterate the PIAA perspective.

In the interim, the Financial Services Committee advanced much more modest legislation, the "Nonadmitted and Reinsurance Reform Act of 2006," (H.R. 5637), introduced by Cong. Ginny Brown-Waite (R-FL).  The aim of the bill is to "create regulatory standardization for non-admitted insurance and reinsurance by applying single-state regulation and uniform standards."  A hearing entitled, "Commercial Insurance Modernization" was held on the legislation in the Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises on June 21, 2006.  The bill subsequently passed the House by a vote of 417-0.

Senate

Sen. John Sununu (R-NH) introduced the "National Insurance Act" (S. 2509), which is supposed to ease the regulatory burden on multi-state insurers by allowing them to register as National Insurers.  National Insurers would be subject to a set of uniform federal regulations rather than having to comply with the differing regulatory requirements of each state in which they operate.  The bill establishes a new federal entity, the Office of National Insurance, to oversee this new regulatory regime.  Currently before the Senate Banking, Housing and Urban Affairs Committee, the bill is unlikely to see any action this year.

Sen. Pat Leahy (D-VT) took a different approach to insurance regulation by re-introducing the "Medical Malpractice Insurance Antitrust Act," (S. 1525).  The bill would exempt medical liability insurance from some elements of the McCarran-Ferguson Act.  Due to the limited use of the antitrust exemption provided by the McCarran-Ferguson Act by medical liability insurers, it is not yet clear whether the bill would actually have any effect on PIAA Members.  The PIAA recently sent Sen. Leahy a letter clarifying some facts about the medical liability insurance industry and offering to work with him on the antitrust issue.

At the start of the 109th Congress, the Senate moved out quickly on the issue, with the Health Education, Labor and Pensions (HELP) Committee approving in March a bill introduced by Sen. Jim Jeffords (I-VT), S. 544.  Very similar to legislation the Senate had approved in 2004, the bill allows health care providers to report medical errors to new "patient safety organizations" (PSOs) without fear that the information would be used to file a malpractice claim or used in a claim already filed.  PSOs would collect and analyze this data and develop and disseminate recommendations, protocols and information aimed at improving patient safety.  These results would be shared with a U.S. Department of Health and Human Services database to catalog reports and identify national trends.  None of the data reported by any entity would identify specific patients, health care providers, or those who report errors.

Subsequently, Cong. Michael Bilirakis (R-FL) introduced similar legislation in the House of Representatives.  In an effort to speed passage of the bill, negotiations on the two bills began before the House took any formal action on the legislation.  Cong. Joe Barton (R-TX) and Cong. John Dingell (D-MI), the chairman and ranking member of the House Energy and Commerce Committee, respectively, worked with Sen. Mike Enzi (R-WY) and Sen. Ted Kennedy (D-MA), the chairman and ranking member of the Senate HELP Committee, respectively, to develop a substitute amendment which could be quickly approved by both chambers.  On July 20, the House Energy and Commerce Committee approved the proposed substitute amendment, and the full Senate passed the new bill by unanimous consent the following day.  Less than one week later, the House approved the bill by a vote of 428-3.