Medical Liability Reform Passes in the House, Stalls in the Senate

Just about as reliably as the swallows return to Capistrano, every year the U.S. House of Representatives passes medical liability reform legislation only to see it wither on the vine over in the Senate.

At least that’s the way it’s been for a quite a few legislative sessions. Will the 109th Congress prove to be any different? And what does recently proposed legislation mean for medtech manufacturers?

Frist: A liability reform initiative.

At the beginning of the year, the leadership of both the House and the Senate cited medical liability reform as a top priority. Senate majority leader Bill Frist (R–TN) included it among his top 10 legislative initiatives for the session. And House Republicans pledged to introduce yet another a medical liability reform bill early in the session. This year’s incarnation of medical liability reform legislation, known as the Help Efficient, Accessible, Low-Cost, Timely Healthcare (HEALTH) Act of 2005 (H.R. 5), was introduced in the House by Representative Phil Gingrey (R–GA) on July 21. The key reform provision of the bill is the capping of noneconomic or “pain and suffering” and punitive damages at $250,000. Economic damages such as medical expenses, lost wages, and other actual costs would not be capped. Authors of the bill claim that it is the increase in noneconomic damages awarded to plaintiffs that has led to the “skyrocketing rise” in healthcare costs and what they refer to as the “medical liability crisis.”

Gingrey: Looking to cap damages.

“As an obstetrician-gynecologist for nearly 30 years, I’ve seen the results of our troubled medical tort system firsthand,” said Gingrey. “In many communities, hospitals have closed, women have to travel across state lines for prenatal care, and emergency rooms lack the on-call specialists they need to save lives. That shouldn’t be happening in America, home to the greatest physicians in the world.”

On July 28, the Republican-controlled House passed the legislation with a vote of 230–194 that was split largely along party lines. The bill was then sent on to the Senate, where several variants of medical liability reform are undergoing legislative review.

AMA’s Plested: Urging Senate approval.

Commenting on House approval of the bill and calling for Senate passage, William G. Plested, MD, president-elect of the American Medical Association (Chicago) said, “Skyrocketing medical liability premiums—$200,000 a year or more in high-risk specialties—are forcing physicians to limit services, retire early, or move to states with reforms. Reforms, including a quarter-million-dollar cap on noneconomic damages, have been working in California for nearly 30 years. The Senate must act to give the rest of our nation that same relief.”

California’s model for medical liability reform is provided by the Medical Injury Compensation Reform Act (MICRA), which has been the law in California since 1975. By all accounts, it has been deemed a success by patients, doctors, and hospitals.

Medmarc’s Quinley: Wary of reform impact.

But according to Kevin Quinley, senior vice president with the Medmarc Insurance Group (Chantilly, VA), California’s MICRA and similar laws in other states have often proven to be problematic for medtech manufacturers. “Plaintiffs, knowing that so-called noneconomic damages from doctors and hospitals are capped by statute, frequently turn their attention to the manufacturer of the device in seeking a more attractive settlement or jury award,” says Quinley. “So what starts out as a medical malpractice suit can shift to a medical product liability case. Simply put, with caps on noneconomic damages on the service provider—the doctor or hospital—the device manufacturer becomes a more tempting and lucrative target for plaintiff recovery.”

But unlike MICRA and similar state statutes, H.R. 5 offers protection to medtech manufacturers. The bill specifically states that “no punitive damages may be awarded against the manufacturer or distributor of a medical product, or a supplier of any component or raw material of such medical product” when the product has been approved, cleared, or licensed by FDA, unless the agency has determined that it was not manufactured or distributed in compliance with applicable statutes and regulations.

Although Medmarc’s Quinley believes that liability protection for medtech firms is very much needed, he says that now may not be the best time to press the issue. “With some of the recent and widely reported device malfunctions and recalls very much in the news, opponents of liability reform legislation would seize upon this issue, claiming it to be giving a pass to manufacturers,” says Quinley. “They could become a powerful force in shaping legislation that would be worse than no reform at all.”

Indeed, that is just the way the HEALTH Act was described by many opponents, most notably Public Citizen (Washington, DC), a consumer advocacy group that describes H.R. 5 as a “gift of impunity to insurers, physicians, hospitals, HMOs, nursing homes, pharmaceutical companies, and medical device manufacturers—a gift that will be paid for by patients, their families, voluntary organizations, and taxpayers.”

And how is medical liability reform legislation progressing in the Senate?

Medmarc’s White: Reform bill is dead.

Not well. Since receiving the bill from the House, it has essentially languished with virtually no action since the end of July. With lackluster Republican support and no Democratic sponsors, the bill seems destined to be buried in committee, particularly now that hurricane relief and the confirmation of two Supreme Court justices are dominating the Senate’s agenda.

“It’s not going to happen—no way,” says Jaxon White, Medmarc’s president and CEO. “Medical liability reform in the Senate is dead this year. It has no current champion . . . and I don’t see one on the horizon, either.”

Canon Communications LLC

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