Norris Cunningham on several medical liability reforms in Trump's HHS budget

by Roy Edroso on Jun 1, 2017
In the regulatory update of the June 5, 2017, issue, Part B News talked to Norris Cunningham, leader of the litigation practice group at the Hall, Render, Killian, Heath & Lyman firm in Indianapolis about the medical liability reforms proposed in the Trump HHS budget. To follow are some more of Cunningham’s thoughts on those reforms.

The proposed cap on non-economic damages would reform the current hodgepodge of state systems into one federal cap. A number of states have already capped these damages at varying levels. It would be a $250,000 cap, but they’ll probably let the states have a more restrictive number if they like -- $225,000, say, but not $400,000 as Missouri currently has.
[These reforms] would do a great deal toward resolving an issue that impacts providers greatly. There’s a general feeling that the relationship between economic and non-economic damages appears to be out of whack. For example, take a case where a hospital patient uses the restroom, falls and fractures her hip. It goes to trial. The economic damages associated with surgical repair, rehab, etc., are maybe $100,000. But plaintiffs' attorneys in a lot of jurisdictions would be looking for a half-million-dollar payday, from which the lawyers will take a third, then charge $50,000 for expenses, etc. … One of the reforms mentioned in the HHS budget document includes the ability to ask the court to redo attorney fee agreements between patient and her attorney.

[Also affecting rates would be] the fair share rule replacing joint and several liability [proposed by Trump]. Currently if multiple providers are sued and one doesn’t have enough coverage [for the settlement or award], one provider may be held responsible for all damages. ... This makes it good to sue as many providers as possible and has a great deal of impact on rates.
Another basic fairness issue [raised by Trump] is safe harbors based on clinical standards. You get experts who walk in, particularly on the plaintiff side, and say Dr. Smith screwed up because the expert found some minority opinion out there that indicates this is the way a procedure should be done, even if clear clinical guidelines exist that indicate something much different that would favor the provider in that circumstance. This reform would allow them to use those clinical guidelines in evidence. … Experts can say a lot of stuff that tends to skew a jury. For providers to be able to defend on clinical standards is a step in the right direction.

A lesser one would be forcing courts to require periodic payments – you won’t be getting lump sums. So insurers can focus on periodic payments they can easily handle.

These reforms, regardless of your political leanings, are reforms that make sense in the context of being able to add basic fairness. … Take excluding provider expressions of regret and apology from evidence. A number of states have moved in that direction [“apology laws”], and states that have adopted that policy are doing better in terms of frequency and severity [amount paid] of claims. 

Powerful interests -- providers and insurers -- have been in favor of these reforms for years, but the Trial Lawyers Association has been good at spreading money around. I thought we had a tipping point in 2005 [after Bush’s re-election], but I was quickly disabused -- I think because of the forces arrayed against it, including the Trial Lawyers Association. Also there are some people who see it as a federalism issue. This hodgepodge among the several states works fine, according to them, and so ought to continue. They favor a conservative approach, like in Kentucky, which has done nothing in reform except expert panels, which is new. So between the trial lawyers and the federalists who think this needs to be dealt with at the state level, [opposition has been effective].
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