It has been a relatively busy time over the last few months with respect to tort reform. At the end of July, the Missouri Supreme Court overturned the state’s cap on non-economic damages. The state’s medical association and its Republican veto-proof majority in both houses of the legislature have since focused their attention on getting replacement legislation passed this legislative session. In October, the Kansas Supreme Court upheld the state’s cap on non-economic damages. Now Rick Snyder, the governor of Michigan, has just signed into law a tort reform package which has physicians there very happy.
The law, which was introduced by the Michigan State Medical Society (MSMS) and supported by The Doctors Company (TDC), builds upon the state’s tort reform law passed in 1993, but alters how juries can award damages and limits what can be counted as a non-economic damage, among other things.
While physicians are elated at the law’s passage, not all interested parties share the same opinion as the MSMS and TDC. Malpractice attorneys who run the Illinois Malpractice Blog had this to say:
The measure does several things. For one, it lumps loss of society and companionship into the noneconomic damages category and requires it be locked in with damage cap laws that were previously passed in the states. In other words, it limits the amount of compensation that a wife, husband, or child might receive as a result of losing their relative due to medical malpractice. There are also now strict time limits on when survivors can file suit for possible errors that led to their relative’s passing. Additionally, the new law bars prejudgment interest on certain damages, like attorney’s fees and court costs. This means that defendants have less to lose by stalling and delaying a case, because interest payments for that delay will be lower.
Predictably, those pushing this measure argue that it is only meant to prevent “frivolous” suits from going to court. Further they claim that it will limit the use of “defensive” medicine which may lower healthcare costs. One proponent even suggested that healthcare costs might be lower by a staggering 20% as a result of these laws and the elimination of defensive medicine.
No doubt those claims of financial savings spurred many to support this bill. But, as we have pointed out time and time again, those claims are nothing more than pipe dreams. There is simply zero evidence of the fact that limiting patient rights in these ways lowers helath [sic] care costs or insurance costs. The only winner are chronic defendants and insurance companies.
As I said above, TDC supported this legislation, and that fact is not the least bit surprising, seeing as TDC itself was born out of a tort reform effort.
In 1976, when all liability insurers stopped offering malpractice coverage in California, a group of physicians got together to help pass MICRA, the Medical Injury Compensation Reform Act. According to Dr. David Troxel, a pathologist and medical director of TDC, MICRA is “the best piece of tort reform legislation in the country”.
After MICRA’s passage, many of the same physicians who worked to pass it got together and formed TDC.
David McHale, Senior Vice-President and General Counsel of TDC, who was kind enough to tell me why TDC’s acquisition of UMIA fell through for yesterday’s post, explained TDC’s support of this legislation:
Essentially, The Doctors Company supported a package of bills introduced at the request of the Michigan State Medical Society. We supported these bills because they will repair some of the erosion court decisions have caused to the state’s medical liability reform statutes. SB 1115 clarifies what damages are covered by the state’s noneconomic damages limitation and specifies the order in which setoffs are applied to a judgment. SB 1118 clarifies how the statute of limitations operates in actions by an authorized representative of an estate, and explicitly provides what parts of a judgment are subject to pre-judgment interest. Together these changes should resolve confusion created by conflicting decisions by different courts, provide greater certainty to insurers and insured health care providers when evaluating liability risks, and limit the ability of plaintiff attorneys to use creative pleadings or paperwork shuffles to inflate damages or evade deadlines.
Physicians are praising a refurbished tort reform package signed into Michigan law in January that they say strengthens protections against frivolous cases.
The Patients First Reform Package enhances reforms approved in 1993 by improving how jury awards are calculated and clarifying which claims fall under noneconomic damages, said Colin J. Ford, senior director of state and federal government relations for the Michigan State Medical Society.
“Our intent was to preserve the intent of the reforms first passed in 1993, which is to keep doctors in the operating room and out of the courtroom,” Ford said in an email. “Our legislative package preserves the ability of a patient to have access to the courts, but puts reasonable requirements in place to assure that our courts treat physicians fairly in Michigan.”
The state’s original reforms, enacted in 1994, included a certificate of merit for all complaints and a $280,000 noneconomic damages cap, among other rules. However, since then, the statutes underwent various interpretations by the courts, and certain loopholes were introduced, Ford said. For example, jury award calculations that included future damages were improperly weighted toward plaintiffs, he said.
The 2013 law requires a fairer formula for calculating future damages, Ford said. The reforms also limit the time frame a party can sue on behalf of a deceased patient and bans prejudgment interest and attorney fees incurred before a judgment is issued. In addition, the law clarifies that loss of household, companionship and consortium are considered noneconomic damages and subject to the state’s liability cap.
“The passage of this legislation is a tremendous win for Michigan’s physicians, as it mitigates the need to practice defensive medicine,” said Richard E. Anderson, MD, chair and CEO of The Doctors Company. The Doctors Company, a physician-owned liability insurer in Napa, Calif., advocated for the Michigan reform package.
However, the Michigan Assn. for Justice — the state’s trial bar — expressed disappointment over the laws, saying they do not benefit patients.
“Throughout the debate, we heard advocates of the legislation continually talk about patient safety and increasing the number of doctors who locate in Michigan,” Ryan Irvin, a MAJ spokesman, said in an email. “We think these are important and laudable goals. Unfortunately, the evidence suggests neither goal is advanced by the reforms that were proposed or passed. … We hope legislators turn their attention to solutions that will actually solve the problems they seek to address.”