Medical Liability Reform
The current medical liability system fails both patients and health care providers. Liability reform must more equitably and quickly compensate those truly injured in the course of medical care without needlessly diverting health care dollars. By reducing liability insurance premiums and exorbitant legal fees associated with litigation, and by ending the need to practice defensive medicine, we can decrease the cost of health care.
Medical liability costs have been rising, primarily due to our nation's dysfunctional liability system. According to the Congressional Budget Office, tort reform implemented nationwide is estimated to lower both total U.S. health care spending by 0.5 percent and federal budget deficits by roughly $54 billion over the next 10 years.
Skyrocketing medical liability premiums are forcing physicians to limit services, retire early or move to a state with reforms where premiums are more stable.
In January 2013, the Patients First Reform Package (Senate Bill 1115 and Senate Bill 1118), was signed into law.
Legislative Analysis of the Patients First Reform Package
SB 1115: Non-economic Loss and Entry of Judgment
- The legislation provides better clarification on what constitutes "economic" and "non-economic" loss.
- The current law sets a limit of $280,000 on the total amount of damages for non-economic loss unless other circumstances occur, such as paralysis or impairment of cognitive abilities, in which case the limit would be $500,000. The bill clarifies the existing law, which includes loss of house household or other services, loss of society and companionship and loss of consortium under the criteria of "non-economic" damages.
- Under current law, the court is required to enter an order of judgment after a verdict is rendered in favor of a plaintiff. The bill makes changes to the law governing the entry of an order of judgment in a medical malpractice action. Specifically, the legislation seeks to clarify when and how judges should apply setoffs, as well as when judges should begin the clock in terms of calculation of prejudgment interest.
- The legislation seeks to require that the courts compound the interest to assure that the reduction to present day value reflects the additional interest that can be earned via compounding.
SB 1118: Statute of Limitations and Prejudgment Interest
- Currently, if a person dies before or within 30 days after the period of limitations has run, an action that survives by law may be brought by a personal representative within two years after letters of authority are issued. Under the bill, in medical malpractice cases the two year period would run from the date letters of authority were issued. This provision would end the practice of trial lawyers who use a loophole in the law to double the statute of limitations for filing wrongful death suits.
- The bill sets limits on the period of time for bringing a medical malpractice action on behalf of a deceased person. By reforming guidelines that cover the timely filing of legal documents, trial lawyers will no longer be allowed to win default judgments against physicians by failing to notify them that they are being sued.
- Under existing law, interest is calculated in six month intervals from the date the complaint is filed. The bill would prohibit interest from being calculated prior to the entry of judgment so that trial lawyers are no longer collecting interest payments on expenses they have not incurred.