Medical Liability Reform

Background

At least 20 states are in crisis because soaring health care liability costs and an inability to access liability insurance have caused medical providers to move out of the increasing number of excessively litigious states and have forced hospitals to suspend services.

Without access to practicing physicians and high quality medical facilities, local chambers cannot attract businesses to locate in their areas or recruit highly talented employees to relocate. Additionally, excessive litigation and high medical malpractice rates have added to employers' health care costs and spurred some providers to "err on the side of caution" that comes at the expense of both health plan dollars and patients receiving unnecessary service. This issue isn't just about physicians -- its effects cut across the health care sector. Hospitals need physicians to admit patients. Companies that manufacture medical devices and pharmaceuticals need physicians to use and prescribe their products.

The U.S. Chamber and its affiliate, the Institute for Legal Reform (ILR), continue to work very hard to build support in Congress for the passage comprehensive health system liability reform in the 110th Congress. Excessive litigation and high medical lawsuit costs have increased employers' health care costs and spurred some providers to "err on the side of caution," leading to increases in health care spending and in the volume of unnecessary services that are provided.

U.S. Chamber Position

We back legislation that would:

• Cap non-economic damages ($250,000)
• Cap punitive damages (the greater of twice economic damages or $250,000)
• Make each party liable solely for its share of damages and not others
• Allow periodic payments of future damages in excess of $50,000
• Impose a sliding scale cap on attorneys' fees
• Impose a statute of limitations

The Chamber has mobilized state and local chambers in more than 42 states to support legislation addressing the medical liability crisis, culminating with House passage of the Help Efficient, Accessible, Low-Cost, Timely Health Care (HEALTH) Act of 2004 (H.R. 4280) in the 109th Congress.  The Senate failed to pass similar legislation.

The Chamber also believes it is critical that health care liability reforms apply to the range of health system providers, including health plans and sponsors, in order to preclude "deep pocket" lawsuits. A number of states have enacted laws holding health plans liable for medical judgments, making it imperative that federal tort reforms be widely applicable. Moreover, federal ERISA preemption laws barring such lawsuits against employers must be maintained.