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House Acts to Improve Patients’ Access to Care by Reining In Runaway Cost of Medical Liability Insurance

Ryan Votes for Legislation to Guard Against Lawsuit Abuse, Lower Costs and Improve Patients’ Access to Doctors

WASHINGTON, DC – The U.S. House of Representatives voted today to fix our nation’s medical liability system by taking steps to promote speedy resolutions to patients’ claims, prevent lawsuit abuse, lower costs and give patients better access to health care.  First District Congressman Paul Ryan voted in favor of the legislation, H.R. 5, which helps restore common sense to the medical liability system.  This legislation passed the House by a vote of 229-196.

“Across our nation, there have been too many cases where doctors have had to stop treating patients because of the incredible rising cost of liability coverage,” Ryan said.  “This hurts patients who lose trusted physicians and have fewer choices for care.  The current system also means higher costs across the board – not just for doctors but for employers who provide health coverage and for federal health programs too.  The bill we passed today is a positive step toward fixing what’s wrong with the system, while making sure that patients who have been injured can get proper compensation and faster resolution of claims.”

H.R. 5 is modeled after California’s Medical Injury Compensation Reform Act (MICRA), enacted in 1976, which has had success at helping control costs and retain patients’ access to affordable care.  Whereas medical liability insurance premiums in California rose 167 percent between 1976 and 2000, premiums in the rest of the U.S. rose 505 percent during the same period. 

In addition to reining in medical liability costs, the legislation is expected to have a positive “ripple” effect in other areas of the health care system.  For example, the Congressional Budget Office (CBO) estimates that enacting H.R. 5 will save the federal government over $14 billion in Medicare, Medicaid and other federal health programs over the 2004-2013 period.  CBO also estimates the bill will result in employers paying less for health insurance.  When employers’ health insurance costs are lowered, it encourages them to continue providing coverage for their employees and frees up resources that can be used to give employees raises, hire more workers, or improve the benefits packages they offer to employees.   

Provisions of H.R. 5 include the following:

·        Requires that health care lawsuits commence no later than three years after the date of injury or one year after the claimant discovers the injury, whichever occurs first. There are certain exceptions to this, including if the injury occurred to a minor while under the age of six. 

·        Does not limit economic damages – which include compensation for plaintiffs’ economic losses, medical costs, rehabilitation expenses and future lost wages.

·        Sets a cap on noneconomic damages (“pain and suffering”) of $250,000.

·        Guidelines governing the award of punitive damages provide that awards not exceed the greater of $250,000 or twice economic damages.

·        Damages are governed by a “fair share” rule, under which each party in a lawsuit is liable only for that party’s share of damages based on the degree of responsibility.  (Currently, a defendant is liable for the entire sum of the damages even when only partially at fault.)

·        Limits contingent fee payments (in other words, where an attorney receives a percentage of the damages).

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