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Bill Would Cap Malpractice Punitive Damages

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NU Online News Service, May 1, 2:45 p.m. — Washington

Punitive damages in medical malpractice lawsuits would be capped at the greater of $250,000 or two times the compensatory damages under bipartisan legislation recently introduced in the House of Representatives.

The legislation, H.R. 4600, would establish a variety of new tort law rules that would apply solely to medical malpractice cases.

Trial lawyers and other critics say the bill will reduce the incentives physicians and hospitals now have to treat patients with the highest degree of care, at a time when providers are facing increasing financial pressure to cut corners.

Supporters of the bill say it is necessary to control what is called a medical malpractice “crisis.”

“Personal injury lawyer attacks on doctors and other members of the health care community have driven up health care costs, decreased the quality of care patients receive and prevented millions of Americans from accessing the health care system,” says Karen Ignagni, president of the American Association of Health Plans, Washington.

“Personal injury lawyers have benefited at the expense of consumers for far too long,” she says.

H.R. 4600 would protect patients by implementing many of the same medical malpractice reforms that have been successful in California, Ignagni says.

Ken Schloman, Washington counsel for the Alliance of American Insurers, Downers Grove, Ill., says H.R. 4600 is a very reasonable bill that is worthy of consideration.

He particularly praises the legislation for encouraging structured settlements and addressing the issue of joint and several liability.

Introduction the legislation comes in the wake of the release of a survey on the effect of litigation on the practice of medicine released by a new organization called Common Good, Washington.

Leaders of the organization include George McGovern, the former Senator and Democratic presidential candidate, and former Republican House Speaker Newt Gingrich.

According to the Common Good survey, 79% of physicians say they order more tests than they otherwise would based solely on the fear of litigation.

In addition, 74% of physicians say they refer patients to specialists more often than what they consider medically necessary due to the fear of litigation.

Philip Howard, chairman of Common Good, says in reaction to the survey results that Americans are losing their trust in justice.

“The common sense needed to run hospitals and classrooms has been replaced by legal fear,” Howard says.

H.R. 4600 was introduced after the Common Good survey was released by Rep. Jim Greenwood, R-Pa., along with nine co-sponsors.

The legislation would require health care lawsuits to be filed no later than three years after the date of injury, or one year after the claimant discovers, or should have discovered, the injury, whichever occurs first.

In addition to capping punitive damages, the bill would cap other non-economic damages, such as pain and suffering, at $250,000.

Moreover, H.R. 4600 would bar application of the doctrine of joint and several liability in medical malpractice cases. This means that each defendant in a medical malpractice case would only be liable for its own share of responsibility for the damage.

The legislation would also place caps on contingency fees paid to plaintiffs’ lawyers.

H.R. 4600 also contains a section dealing with medical devices. The bill would bar punitive damages against the manufacturer or distributor of a medical device if the Food and Drug Administration approved the device before it was marketed.

Another section of the bill deals with structured settlements. If a court approved an award of at least $50,000 against any party with sufficient insurance or assets to fund a structured settlement, the bill would require the trial court to allow the creation of a structured settlement if either party requested a structured settlement.