On the Tip of Tort Reform

CINDY SANDERS

On the Tip of Tort Reform | Tort reform, non-economic damages, caps on jury awards, Tennessee Medical Association, TMA, Fred Thompson, Dr. Michael Minch, Tennessee Association for Justice, HB 2008, SB1522, Tennessee Civil Justice Act of 2011

Dr. Michael Minch, TMA President

State Moving Toward Non-Economic Caps

For years, healthcare providers across the state have asked the Legislature to mandate a cap on jury awards for non-economic damages. For years, the answer has been ‘no.’ This Legislative session, however, feels very different. For the first time, many believe tort reform is about to become a reality.

While providers here never faced the kind of runaway verdicts that became commonplace in neighboring Mississippi before that state enacted caps, Tennessee was added to the American Medical Association’s (AMA) ‘crisis list’ by the mid-2000s. At that point 45 percent of hospitals in the country reported the professional liability crisis had resulted in the loss of physicians or reduced coverage in emergency departments according to information collected through the American Hospital Association’s (AHA) Professional Liability Insurance Survey.

A similar AMA research mechanism from 2007-08 found 61 percent of physicians 55 and older had been sued at least once during their career, and nine of every 10 surgeons in the same age group had been sued. For obstetricians/gynecologists, the picture was even bleaker with 51 percent being sued before hitting the age of 40.

Increasing liability insurance premiums, the cost and time required to defend a case (even one without merit), increased cost to the system for practicing defensive medicine, a growing ‘us vs. them’ mentality between providers and patients, and diminished access to care as a result of physicians or hospitals avoiding high-risk specialties and procedures resulted in the AMA leading the charge on tort reform. By January 2011, half of the states in the country had enacted legislation to address some variation of non-economic damage caps, and another six states had put caps on total damages.

Although not there yet, there is a widespread belief that Tennessee is on the brink of becoming the newest member of that club. Gov. Bill Haslam backs tort reform and enjoys Republican majorities in both the State House and Senate.

The Tennessee Civil Justice Act of 2011 (HB2008/SB1522) does not put any cap on economic damages suffered by a plaintiff but does limit non-economic damages to $750,000. Punitive damages — those awarded when a jury deems malicious intent, fraud or recklessness — would be capped at twice the total of economic and non-economic damages or $500,000, whichever is greater. However, limits on punitive damages would not apply if the defendant was convicted of a felony which caused the injury or was under the influence of alcohol or drugs

Representing the Tennessee Association for Justice in front of the House Judiciary subcommittee in late March, former U.S. Senator Fred Thompson outlined his objections to the current tort reform bills under consideration. The prominent Republican and long-time member of the Tennessee Bar Association suggested the proposed legislation is like “killing a mouse with a bazooka.”

Countering the argument that defendants ought to know what the worst-case scenario might be if a case went to trial, he said instead that people should think, “If I don’t exercise a reasonable amount of care, I don’t know what a Tennessee jury is going to do.”

Thompson continued, “The crux of the matter is that we ought to be looking for balance. You know, there’s a reason why our symbol of justice in this country is a lady blindfolded with scales. We talk about the blindfold a lot, but think about the scales. When we do something to one side of the scales, we’re doing something to the other.” He added that as a state, Tennessee trusts juries to make death penalty determinations. If, he opined, juries are capable of making decisions in life-or-death cases, then surely they were capable of reviewing facts in civil cases and making a determination of fair compensation.

F. Michael Minch, MD, who was sworn in last month as the new Tennessee Medical Association (TMA) president, said he believes meaningful tort reform will be passed this session. Minch, who chaired the association’s medical liability committee for several years, stressed legislation would have no impact on economic damages, which are categorized as quantifiable costs that can be evaluated including loss of wages, hospital bills, rehabilitation and future medical expenses. He added it’s much harder to assign a dollar value to the ‘pain and suffering’ part of the equation, and because juries vary, there’s no real consistency.

Tennessee’s legal landscape, he continued, doesn’t encourage young physicians graduating from the state’s four medical schools to stay here and practice. “People would rather go to states where they have some protections,” he said. “We’d like to have an environment here that’s as good as the 30 states that have some type of caps.”

In the past, Minch said tort reform bills have never made it out of the Civil Practice subcommittee of the House. However, there is now a new political landscape. “Leadership of the House has changed so the leadership of that committee has changed,” he pointed out. Also, he noted, previous bills had a significantly lower cap amount.

The current bills, he said, represent a compromise in that the non-economic damages cap is set at $750,000. Minch said most providers felt like the cap should be lower but would accept the higher figure. In fairness, he added, the idea of limiting non-economic damages started in the mid-1970s in California with a $250,000 cap. “If you index for inflation at 3 percent, that would be about $724,000 in today’s dollars.”

Minch also pointed out liability caps actually have broad public support. A recent survey of 620 adult Tennesseans conducted by Catalyst Healthcare Research and commissioned by the TMA found 61 percent are in favor of limiting non-economic damages. Among seniors, that support rises to 72 percent.

“This survey is a fair snapshot of adults in our state, and it shows most of our citizens understand how high jury awards — or the threat of them — affect rising healthcare costs and their access to their doctor. Despite what some of our opponents claim, older Tennesseans get the connection and want us to establish fair boundaries for these emotional awards, which have nothing to do with actual economic losses,” Minch stated.

“The access to care is more important to seniors than whether or not they’re going to get a big malpractice settlement,” he added. “Most people won’t get involved in a malpractice case, but everyone gets involved in whether or not there is a doctor to see you.”

Although Minch said he believes the votes are there to pass the Governor’s reform legislation, he cautioned providers from taking anything for granted. “If you’re requested by the TMA to appeal to your legislator, please do so. It’s in your best interest.”