Without Non-Economic Damage Cap, Will N.J. Med Mal Reform Be Enough?
New Jersey Gov. James McGreevey signed a medical malpractice insurance bill into law last week which sets some restrictions on lawsuits and creates a fund to subsidize the state health care industry's coverage costs.
The governor said it provided change for the future and immediate short-term benefits, but critics said it won't do much to improve the state's marketplace in the long run.
The bill was passed after nearly two years of negotiations in the state legislature.
"Thanks to a focused commitment from all parties, this medical malpractice law is comprehensive, providing short-term relief and long-term reform," Gov. McGreevey said.
"Our overriding priority," he said, "is to ensure that patients have access to doctors and quality health care, and this bill meets that objective in several ways."
The final version of the bill, A50, was approved by the Democrat-controlled state Assembly in a 46-25 vote last month. The approved bill was a revised version that incorporates changes made by the state Senate, also controlled by Democrats, in March.
Among its key provisions, the law:
Creates a $78.3 million three-year subsidy fund to help physicians and hospitals pay for medical malpractice coverage.
The subsidies would be funded by physicians, lawyers, chiropractors and dentists, who would pay a $75-per-year license fee. Hospitals and other health care employers would also pay a $3 tax on each worker.
o Sets stricter guidelines for filing malpractice lawsuits.
Gives judges more leeway to control monetary awards.
Encourages mediation rather than court battles.
Expands the Good Samaritan Act, allowing health care workers who respond to emergencies beyond their normal duties to receive protection from civil lawsuits.
But critics argue that the bill lacks one critical element needed to stabilize the state's medical malpractice insurance marketplace caps on non-economic damages in jury awards.
Richard Stokes, a representative for the Des Plaines, Ill.-based Property Casualty Insurers Association, noted that while he had expected the governor to sign the bill, "we also sent him a letter last week asking him to veto the legislation."
Explaining the veto request, Mr. Stokes said, "While there are some short-term positive aspects to the legislation, we just don't see how it could help the long-term stability of the marketplace."
"The critical part of the bill that's lacking is caps on non-economic damages," he said.
Still, Mr. Stokes observed that this is probably as far as New Jersey politicians are willing to go in addressing the med mal insurance issue. "I don't think there is going to be anything more," he said. "Considering the fact that this took two years and numerous committee hearings, I just don't think the state legislature has any wherewithal to look at further reforms at this stage."
Reproduced from National Underwriter Edition, June 11, 2004. Copyright 2004 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.