Good for Texas, Good for U.S.

Texas-Style Tort Reform Pushed Nationally

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Legislative Affairs Feature – June 2011


Tex Med. 2011;107(6):23-25

By Ken Ortolon
Senior Editor

The way U.S. Rep. Michael Burgess, MD (R-Texas), sees it, the 2003 Texas medical liability reforms are so successful that the rest of the country should follow suit.

"Proposition 12 really has made a huge and profound difference on the practice of medicine in the state of Texas, not just from the standpoint of physicians' liability premiums – although that has been substantial – but the number of counties that now have an ER doctor or an OB/Gyn that didn't in the past," he said.

That is why a number of Texas members of Congress – both Republican and Democrat – are either authoring or cosponsoring legislation to pass national legislative reforms similar to those in Texas or, at least, to ensure that no federal action could negate state-level reforms.

Representative Burgess filed House Resolution 896, the Medical Justice Act, which largely enacts the Texas medical liability reforms – including a $250,000 cap on noneconomic damages – nationwide.

Meanwhile, U.S. Rep. Lamar Smith (R-Texas) is cosponsoring HR 5 with U.S. Rep. Phil Gingrey, MD (R-Ga.). HR 5, the Help Efficient, Accessible, Low-cost, Timely Healthcare (HEALTH) Act, is patterned after the Medical Injury Compensation Reform Act (MICRA) passed in California in 1975. Texas' 2003 reforms, themselves, are MICRA-based.

Finally, U.S. Rep. Henry Cuellar (D-Texas) and Representative Gingrey coauthored HR 816, which ensures that no regulations resulting from the national health system reform law could override state medical liability laws, such as the Texas reforms.

The Texas Medical Association supports all three tort reform bills, but even the authors acknowledge that getting the Democratic-controlled Senate to pass medical liability reform and President Barack Obama to sign it is almost impossible.

Still, supporters say there is a good chance that HR 5 and HR 816 will clear the House. And Representative Cuellar is optimistic his bill can gain enough support in the Senate to pass, particularly because it merely protects existing state laws.


Preserving the Status Quo

TMA Immediate Past President Susan Rudd Bailey, MD, says defending the landmark Texas liability reforms is the association's primary goal. The reforms led to increased access to medical care for Texas patients and substantially lower medical liability insurance premiums for physicians.

Since 2003, a record number of new physicians have been licensed in Texas, and dozens of counties now have emergency physicians, obstetrician-gynecologists, or other specialists they didn't have before. The number of physician license applications the Texas Medical Board (TMB) received jumped from 2,561 in 2003 to a high of 4,094 in 2009, according to TMB statistics. Meanwhile, the number of licenses issued by TMB rose from 2,513 in 2003 to a high of 3,621 in 2008. In all, 15,282 new physicians were licensed in Texas between 2004 and 2009.

"We cannot afford for even very-well-intentioned federal tort reform legislation, if it were to come to pass, to negate the great progress we've made here so far," Dr. Bailey said.

None of the liability measures pending in the House at press time are new. The HEALTH Act was introduced and passed by the House in previous sessions. Representative Burgess filed his Texas-style reforms in previous sessions, and Representative Cuellar successfully added language similar to HR 816 to the Affordable Care Act when it passed the House in November 2009. Unfortunately, the language was left out of the Senate version of the bill, which ultimately became law.

In a January letter to Representative Smith, Dr. Bailey threw TMA's support behind HR 5 with the proviso that "this legislation in no way preempts the state reforms that have been won in Texas and other states."

And in a March letter to Representative Cuellar, Dr. Bailey wholeheartedly endorsed HR 816, cosponsored by Representative Burgess and Representative Smith, who chairs the House Judiciary Committee.

"We very much appreciate this legislation, which reaffirms the legislative intent that nothing in the Affordable Care Act of 2010 would override Texas' 2003 health care liability reforms," Dr. Bailey wrote. "You make it crystal clear that this new law, in no way, either intentionally or unintentionally, preempts or changes the states' abilities to design medical liability laws that are in the best interests of their citizens. You also make it clear that nothing in that new law exposes Texas physicians to new theories of tort liability."

Representative Cuellar says he backed medical liability reforms as a member of the Texas House of Representatives and says he wants to make sure neither the ACA nor any regulations developed to implement it override current state law.

"The bottom line is we want to make sure that no bureaucrat comes in and creates a law that would preempt what we've done in Texas or California or other states where there are some pretty strong medical liability statutes," he said.

In addition to TMA, the American Medical Association, the Texas Medical Liability Trust (TMLT), the Texas Alliance for Patient Access, the American Society of Plastic Surgeons, and other medical groups endorsed HR 816, Representative Cuellar says. In fact, TMA officials say TMLT really has played a leading role in trying to protect Texas' liability reforms from being overridden by anything that came out of federal health system reform.

"They were pushing from day 1 to make sure it was clarified that in no way was state law usurped by the federal legislation," said Darren Whitehurst, TMA vice president for advocacy.

TMLT President and Chief Executive Officer  Bob Fields says the concern was that "there was at least inferences" in ACA that might allow the federal government to override state medical liability laws, at least for Medicare, Medicaid, and TRICARE. That would mean that physicians used by Medicare, Medicaid, or TRICARE patients would be subject to federal tort laws, which do not include the $250,000 cap on noneconomic damages that Texas enacted, he says.

Representative Cuellar believes HR 816 will pass the House, and he already is talking to Sen. Dianne Feinstein (D-Calif.) about sponsoring the measure in the U.S. Senate.


Roadblocks Ahead

The outlook for the HEALTH Act and Representative Burgess' Medical Justice Act, however, doesn't look as promising.

While both measures include a $250,000 cap on noneconomic damages, there are some differences. HR 5 sets a statute of limitations on medical liability cases of three years after the date of the injury or one year after the patient discovers the injury; makes each party liable only for the amount of damages directly proportional to his or her percentage of responsibility; and allows courts to restrict payment of attorneys' contingency fees. The bill also allows punitive damages only when "clear and convincing evidence" proves that a physician acted with malicious intent to injure the patient or deliberately failed to avoid unnecessary injury, and denies punitive damages in cases involving products approved, cleared, or licensed by the Food and Drug Administration.

HR 896 limits noneconomic damages and total damages a patient may recover from a single health care practitioner. It also:  

  • Says a medical liability carrier that rejects a settlement offer within policy limits is not liable for damages in excess of the physician's liability;
  • Sets requirements for qualified expert reports;
  • Allows periodic or accrual payment for future damages;
  • Prohibits a jury from awarding punitive or exemplary damages unless it is unanimous;
  • Makes each defendant liable only for a proportionate share of total damages directly correspondent to his or her responsibility; and
  • Provides "Good Samaritan" immunity for physicians and hospitals in emergency cases.  

Representative Burgess says he knows HR 5 is the House Republican leadership's bill and almost certainly will be the vehicle that goes to the House floor for debate. But he thinks it's important to inject the Texas experience into the debate.

"When I first got to Congress in 2003, Texas had not done its liability reform," he said. "Prop 12 was unknown. So MICRA was the shining example of how caps on noneconomic damages could hold down costs. Consequently, HR 5 was closely patterned after the California law."

Since then, data from the Texas law show a dramatic impact on premiums, access to care, and increased physician workforce, he says.

"Caps work. Caps on noneconomic damages are a good idea. It improves the provider and patient landscape in areas where it is tried. But the refinements that were built into the Texas proposition should be front and center because they are working," Representative Burgess said.

Apparently, a number of other Texas lawmakers agree. U.S. Reps. Kevin Brady (R-The Woodlands), John Carter (R-Round Rock), Michael Conaway (R-Midland), Blake Farenthold (R-Corpus Christi), Bill Flores (R-Waco), Kay Granger (R-Fort Worth), Sam Johnson (R-Plano), Kenny Marchant (R-Coppell), Michael McCaul (R-Austin), Randy Neugebauer (R-Lubbock), Pete Olsen (R-Sugar Land), and Pete Sessions (R-Dallas) cosponsor the bill.


Exercise in Futility?

While Representative Burgess' bill likely is going nowhere, HR 5 cleared the Judiciary Committee and was referred to the House Energy and Commerce Committee for further consideration. Representative Burgess says he will support it. Representative Cuellar says he might support it if the final version is close enough to the Texas reforms.

But both have little hope the Democratic majority in the Senate will pass or the president will sign any medical liability reform. Representative Cuellar points out that Republicans couldn't even push through tort reform when they had majorities in both the House and Senate and the presidency.

What may hurt chances for significant medical liability reform even more are the recent statements from a bipartisan group of state lawmakers from the National Conference of State Legislatures who say medical liability is an issue that should be left up to the states.

Dr. Bailey says TMA also acknowledges that federal reforms are unlikely to pass, but says "we've got to support our leaders who are doing the best they can" to protect the Texas reforms from federal intrusion.

Ken Ortolon can be reached by telephone at (800) 880-1300, ext. 1392, or (512) 370-1392; by fax at (512) 370-1629; or by email.


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