U.S. Deficit Commission Recommends Tort Reform, Disaster Plans

NU Online News Service, Dec. 1, 3:46 p.m. EST

WASHINGTON–The co-chairmen of the deficit commission appointed by President Obama today proposed "aggressive tort reform" as one of its recommendations for reducing the federal budget deficit.

The co-chairmen of the 18-member National Commission on Fiscal Responsibility and Reform also said in their draft, "Many members of the commission also believe that we should impose statutory caps on punitive and non-economic damages, and we recommend that Congress consider this approach and evaluate its impact."

Representatives of the plaintiffs' lawyer industry immediately assailed the recommendations, calling them "dangerous proposals [that] will create a health care system that costs more but produces worse outcomes."

Also among the deficit-cutting proposals contained in the commission's draft report was a recommendation for the creation of a disaster fund that would "budget honestly for catastrophes."

Blaine Rethmeier, a spokesman for the American Insurance Association, said the deficit panel's recommendations should receive prompt consideration.

"The good news is that the recommendations contained in the report are already bringing focus to the issues," Mr. Rethmeier said.

He added, "We have an enormous budgetary problem facing our country and our future generations. Congress needs to give each of the commission's recommendations serious consideration in order to improve our nation's fiscal health."

The changes were proposed in the draft of the "Moment of Truth" proposal on federal budget-cutting unveiled by Democrat Erskine Bowles and Republican Alan Simpson.

A vote on the proposal by the full committee membership is scheduled for Friday. The co-chairmen released their proposal this morning.

On tort reform, the co-chairmen recommended that among the policies that should be pursued, state and federal governments should consider modifying the "collateral source" rule to allow outside sources of income collected as a result of an injury (for example, workers' compensation benefits or insurance benefits) to be considered in deciding awards.

The co-chairmen also suggested imposing a statute of limitations–perhaps one to three years–on medical malpractice lawsuits and replacing joint-and-several liability with a fair-share rule, under which a defendant in a lawsuit would be liable only for the percentage of the final award that was equal to his or her share of responsibility for the injury.

The co-chairmen further suggested creating specialized "health courts" for medical malpractice lawsuits and allowing "safe haven" rules for providers who follow best practices of care.

They projected that those changes would save $2 billion in 2015 and $17 billion through 2020.

But Gibson Vance, president of the American Association for Justice, which represents trial lawyers, said, "Not once does this report mention patient safety and solving the epidemic of medical errors that plague our health care system, costing thousands of lives and billions of dollars each year."

He added, "These radical ideas will guarantee that patients injured by medical errors are left with no recourse, leaving taxpayers to foot the bill and causing our nation's deficit to rise further.

"The last thing Americans want is Washington interfering even more with their health care by creating expensive new health courts or controversial practice guidelines that will tie the hands of physicians and create even more government bureaucracy."

On disaster relief, the co-chairmen suggested a disaster fund budget authority be limited to the rolling average of disaster spending in the most recent 10 years, excluding the highest and lowest year.

Any unused budget authority would be rolled forward to increase the disaster fund budget available in the following year, they suggested.

Any spending above the disaster fund limit must be offset by reductions in spending or subject to a 60-vote point of order (and all other requirements established for regular emergency spending).

Moreover, the two co-chairmen recommended codifying a strict definition of what qualifies as a disaster and requiring Congress and the president to separately designate spending as an emergency and as necessary for the purposes of disaster response.

"To keep Congress accountable and encourage transparency, the commission also recommends the establishment of a searchable online database of all disaster spending, similar to that found on the Recovery.gov website, to be maintained by the Government Accountability Office and operational by January 1, 2012," the co-chairmen proposed.