Tort Reform Opt-Out Concerns Insurers

NU Online News Service, Dec. 21, 2:41 p.m. EST

WASHINGTON–A trade group representing medical liability insurers is voicing concern over a provision in the Senate healthcare reform bill that would encourage states to create tort reform programs, but allows participants to "opt-out" of any new process the state's establish at any time.

"Allowing claimants to opt-out of the new processes at any time is a serious concern," said Lawrence E. Smarr, president of the Physician Insurers Association of America. "We are okay with an op-out provision as long as there is a point where both parties commit to the process."

"As currently worded, the provision would gut any tort reform the bill encourages states to implement," Mr. Smarr said. "We are hopeful that it can be reworded during the conference process," he said.

The provision, contained in an amendment unveiled Saturday by Sen. Harry Reid, D-Nev., Senate Majority Leader, encourages states to develop, implement, and then evaluate "alternatives to current tort litigation for resolving disputes over injuries allegedly caused by health care providers or health care organizations."

The bill provides $50 million in grants to the states annually over the next 5 years starting in 2011 to accomplish this goal.

States would have to apply to the Department of Health and Human Services for the funds.

Most of the provision is similar to that proposed in the House legislation, according to Mr. Smarr. But, the opt-out provision is a major concern, he said.

At the same time, he said he is "pleased" that the Senate bill does not contain language repealing the antitrust exemption currently accorded to health and medical malpractice insurers under the McCarran-Ferguson Act.

But, he cautioned, the provision remains in the House bill, and will be subject to negotiation in conference to reconcile the House and Senate's versions.