December 2003 Bulletin

In the States

Medical liability reform may be delayed because the legislative task force assigned to develop recommendations won't have its report ready for the start of the 2004 legislative session. The task force has been working since June to develop a program that would help lower insurance rates or keep them flat. Members of the task force stated that opposition to capping non-economic damages remains strong, but they are looking at a patient compensation fund.

State officials are requiring medical liability insurers to file rates 7.8 percent lower than they otherwise would have because of new laws limiting non-economic damages. The rates must be retroactive to Sept. 15, providing some doctors with refunds. The requirement means that an insurer who would have filed for a 20 percent increase based on losses will now be limited to no more than a 12.2 percent increase.

Voters elected a physician, former U.S. Rep. Ernie Fletcher (R-Ky.), governor of the Blue Grass State. This is a boost for physicians in Kentucky who will be pushing in 2004 for a constitutional amendment to allow a cap on non-economic damages. Gov. elect Fletcher supported medical liability reform legislation in Congress. For more information:

Gov. Robert L. Ehrlich Jr. is drafting legislation that places new restrictions on medical liability claims. In 1988, the state limited non-economic damage payments to plaintiffs to $350,000, with a gradual increase. The cap is currently at $635,000. Damage awards have also increased significantly. The governor's proposal would lower the cap to $250,000, place limits on the percentage of an award an attorney can claim in fees, require economic damages to be calculated on the basis of take-home pay rather than gross earnings and encourage more structured settlements.

The Harvard School of Public Health is working with the governor’s office on a proposal to move medical liability claims out of state courts and into a new administrative framework similar to the state’s workers’ compensation system. Tribunals of administrative law judges rather than juries would resolve claims. Damages awarded would be based on a compensation schedule established by the state. Appeals to courts would be allowed only in cases involving fraud or allegations that the tribunal did not follow its own rules. For more information:

New Jersey
Physicians were unsuccessful in their bid to unseat Democratic legislators opposed to medical liability reform through caps on non-economic damages. In the November election, Democrats took control of both houses of the legislature; even those supportive of reform now admit that caps are "as dead as anything could be." Physicians will now try to "mend some fences" and focus on passing some legislation during the current lame-duck session, which ends in early January 2004.

North Carolina
The Senate passed a medical liability reform bill, S.B. 802, which does not contain any caps. Under the bill, all medical liability cases would be referred to a three-person review panel before trial. At trial, each party must submit a suggested amount of damages to which the plaintiff is entitled. The jury must select either the plaintiff’s [proposed amount of damages] or the defendant’s. If the jury agrees with the panel that the defendant is not liable, then the plaintiff must pay the defendant’s “court costs and reasonable attorneys’ fees incurred after the filing of the referees’ report and finding.” Likewise, if the jury decides in favor of the plaintiff [as does the review panel], then the defendant must pay the plaintiff’s costs and fees. The House of Representatives will take up the bill in 2004. For more information:

The Ohio House of Representatives passed H.B. 189 to allow podiatrists to have independent admitting privileges to hospitals. Currently, they must co-admit with an MD or DO. The House also passed legislation, H.B. 71, requiring a moratorium on the construction of new specialty hospitals while a panel studies the effect of specialty hospitals on community hospitals. During the two-year moratorium, hospitals are not allowed to deny privileges to physicians with financial interests in specialty hospitals. Both bills now move to the Senate. For more information visit:

H.B. 3630 was signed into law that created a subsidy for medical liability insurance premiums for physicians who practice in rural areas of the state. Premium reductions for non-obstetricians will be up to 40 percent, while premium reductions for obstetricians will be up to 80 percent. For more information visit:

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