Monday, February 26, 2007

TMA v. TTLA

Posted By on Mon, Feb 26, 2007 at 11:04 AM

A hearing of the Senate Judiciary Committee is scheduled tomorrow afternoon (2/27) to consider two changes in the laws governing medical malpractice litigation in Tennessee.

One proposed bill, sponsored by Sen. Mark Norris (R-Memphis) and backed by the Tennessee Medical Association (TMA), would cap "non-economic" damages at $250,000.

The other, sponsored by Sen. Doug Jackson (D-Dickson) and backed by the Tennessee Trial Lawyers Association (TTLA) (but, oddly, not by the TMA), would require that a certificate of merit be filed within 90 days of suit by both plaintiff and defendant to weed out cases that have no merit.

Update: Today's hearing was postponed until next week after the committee spent its full day discussing dog-bite legislation. In its broadest formulation, the TMA's position is that "frivolous lawsuits" and out-of-control jury awards are "jeopardizing access to health care" in Tennessee. The TMA says that many doctors are closing their practices because of "increasing medical malpractice insurance premiums and climbing jury awards." The TMA also claims that the cost of malpractice litigation is a significant cause of the increased cost of health care generally, not just from the direct costs of malpractice litigation but from "defensive medicine" practiced by doctors who order tests or procedures that might not otherwise be strictly necessary.

For all those reasons, the TMA is proposing a cap of $250,000 on "non-economic" damages.

The TTLA counters by saying that any claim with non-economic losses of at least $250,000 is by definition not "frivolous," so a cap on non-economic damages would do nothing to deter frivolous suits. Very few cases are actually decided by juries, moreover—only 5 cases went to verdict in 2005—so it is difficult to sustain the contention that jury verdicts are out of control. On the other hand, 444 cases were settled in 2005, the medical malpractice insurance carrier presumably settling because it saw probable proof of liability. Of the payouts in 2005, $120 million was in settlements, $6 million from jury awards—a ratio of 95 to 5 percent.

As to doctors closing their practices, the TTLA points to a 2006 report by the Department of Commerce and Insurance that the number of physicians practicing in Tennessee actually increased from 218 per 100,000 population to 260 per 100,000 between 1991 and 2001. The TTLA acknowledges that some doctors are experiencing financial pressures, but it says that their difficulties stem in larger part from radically lowered reimbursement rates under managed care, TennCare and Medicare—that it's not just a matter of high malpractice premiums.

The primary reason that good doctors are paying high malpractice insurance premiums, according to the TTLA, is that their insurance companies do not "experience rate" their premiums. This means that a physician's premium is not calculated on the quality of care he provides. Instead, all doctors wind up paying for the negligence of the few doctors who actually commit malpractice. Premiums are based on a one-size-fits-all standard within specific disciplines and specialties.

The TTLA also says that 50 percent of malpractice claims come from only 5 percent of the doctors practicing in Tennessee. The TMA disputes that figure, claiming that more than two-thirds of doctors in Tennessee have had malpractice claims filed against them, but the TTLA counters that the TMA figure includes all inquiries about possible negligence, not actual malpractice lawsuits. (The TMA acknowledges that in 88 percent of such inquiries there is no malpractice discovered or suit filed.) If the insurance companies practiced careful experience rating in their premium calculations, the TTLA says, the small number of doctors committing professional negligence would be charged with a much larger share of the total malpractice premiums paid in the state.

As to the claim that health care costs are being increased by the practice of "defensive medicine," the TTLA quotes the Congressional Office for Technology Assessment that less than 8 percent of the total cost of healthcare in the U.S. is affected by the practice of defensive medicine. Actual malpractice payouts, for both meritorious and "frivolous" lawsuits, amounts to only .55 percent of the total cost of health care, according to the Consumer Federation of America. And the TTLA says that "defensive medicine," where life and health are at stake, is "good medicine," pointing out that malpractice liability only exists where a physician's practice falls below the accepted "standard of care," a standard which presumably would reflect sound medical practice.

As a matter of judicial philosophy, the TTLA says it is skeptical of any measure which would remove discretion from the hands of a jury—12 ordinary citizens—and give it over to the state legislature instead. And limiting the size of jury awards, it reiterates, will do nothing to discourage frivolous lawsuits—a case worth at least $250,000 in non-economic losses is by definition not a frivolous case.

How, then, can frivolous cases be discouraged? Sen. Jackson's bill calls for both plaintiff and defendant in a malpractice case to file sworn affidavits within 90 days of suit from a competent expert witness (i.e. another physician with expertise in the defendant's specialty either from Tennessee or a contiguous state) who, having reviewed the evidence in the case, can state that the defendant's conduct either did or did not fall below the standard of care expected of a practitioner under the same circumstances. If the plaintiff cannot secure such an affidavit, his case is dismissed; if the defendant cannot secure such an affidavit (assuming that the plaintiff can), liability can be assigned to him by default. Jackson's bill, backed by the TTLA but apparently not by the TMA, would quickly eliminate cases which are unsupported by any medical proof and are therefore "frivolous."

Legal mechanisms are already in place to protect physicians from unwarranted liability or frivolous suits. At the filing of suit, the attorney for the plaintiff signs a pledge that he has reviewed the facts of the case and believes in good faith that there is a justifiable claim to be made. If that turns out not to be true, the attorney may become liable for all of the defendant's costs and resultant damages. Jackson's bill would strengthen that requirement.

After trial, if the verdict seems too high, the presiding trial judge has the discretion to order a diminution in the size of the verdict or to order a new trial. The appellate court has the same discretion if it is shocked by the verdict. Such reductions are rarely reported in the press, says the TTLA, and do not normally come to public attention. An initial extreme verdict may be reported prominently (e.g. the multimillion dollar verdict in the McDonald's "hot coffee" case) but the subsequent reduction of the award often passes unnoticed (the "hot coffee" judgment against McDonald's was ultimately settled for about $300,000).

The TMA and TTLA will do battle in the Judiciary Committee tomorrow. It could be quite a show.

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