Filed Under:Markets, E&S/Specialty

Med-Mal Reform Included in Deficit-Reduction Proposal

NU Online News Service, July 21, 3:22 p.m. EDT

WASHINGTON—A medical-liability insurance trade group is praising the decision of the “gang of six” deficit-reduction panel to include a mandate in its plan for Congress to enact medical-malpractice reform.

“Meritless claims, which are numerous because of the current medical-professional liability (MPL) system, needlessly clog the courts, consume resources that would otherwise help injured patients, and delay compensation to those who have been truly injured,” says Lawrence E. Smarr, president of the Physician Insurers Association of America.

He adds, “For these reasons alone, federal tort reform is long overdue.”

However, Smarr notes, “We are pleased that these senators, along with several experts, have concluded that MPL reform will reduce our national debt. This makes it more imperative than ever that effective MPL reforms be put into place.”

Republicans have been pushing for strong medical-malpractice reform legislation since the new Congress took over in January.

However, the legislation that has been crafted through three House committees includes language that pre-empts state law.

The legislation is H.R. 5, the HEALTH Act.

The legislation imposes a $250,000 cap on subjective, noneconomic damages; collateral-source rule reform allowing evidence of outside payments to be made in court; a ban on subrogation by collateral sources; a fee schedule for attorney contingency fees; and imposes periodic payments of future damages.

But the cap provision has stirred constitutional concerns from both Democrats and Republicans alike—and has held up House floor action.

Critics argue that it would pre-empt cap provisions in existing state laws that are working well, and could violate the 10th Amendment to the Constitution.

PIAA says Congressional Budget Office calculations that include MPL reform project savings of $13.5 billion in the first five years after enactment, and $54 billion over a ten-year time period.

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