[Extensions of Remarks]
[Pages E1540-E1541]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

MEDICAL MALPRACTICE AND INSURANCE REFORM ACT OF 2005

______

HON. JOHN CONYERS, JR.

of michigan

in the house of representatives

Wednesday, July 20, 2005

Mr. CONYERS, Mr. Speaker, I am pleased to introduce the Medical
Malpractice Insurance and Litigation Reform Act of 2005. In response to
the issue of frivolous lawsuits, Title I of the bill provides for a
series of measures designed to insure that the lawsuit itself is not
frivolous and that the pleadings filed in connection with the suit are
accurate and meritorious. Title I also provides for alternative dispute
resolution designed to encourage resolution of medical malpractice
actions outside of court.
The bill also responds to the real problems in the medical
malpractice insurance market, namely higher prices driven by lack of
competition and investment losses by insurers leading to a boom/bust
cycle. In response to these issues, Title II insures that the antitrust
laws apply to medical malpractice insurers, price comparisons can be
easily obtained, and procedural checks are in place to insure that
premium increases are warranted and can be challenged by health care
providers.
Above and beyond these requirements, Title III of the legislation
responds to concerns that medical malpractice is not available in
certain parts of the country. As a result, this title would create
monetary grants dispensed through the Health Resources and Services
Administration to health care providers who choose to work in
geographic areas with a shortage of one or more types of health
providers.
In addition, the bill responds to the need to fully examine the
recent and dramatic increases in medical malpractice insurance
premiums. Title IV creates an Independent Advisory Commission on
Medical Malpractice Insurance to evaluate the cause of the recent
premium increase. Title V authorizes the Department of Health and Human
Services to collect the data necessary to examine the medical
malpractice insurance industry. The following is a more detailed
description of the legislation:

``The Medical Malpractice and Insurance Reform Act of 2005'' Section-
by-Section Analysis

Scope. The legislation narrowly defines ``medical
malpractice action'' to cover ``licensed physicians and
health professionals'' for only cases involving medical
malpractice. These definitions are intended to include
doctors, hospitals, nurses, and other health professionals
who pay medical malpractice insurance premiums. See, Sec.
107(8).
The Republican legislation is broadly drafted to include
HMOs, insurance companies, nursing homes, and drug and device
manufacturers for a broad range of liabilities including
suits by physicians against those companies. The full extent
to which H.R. 534 protects the wrongdoings of these companies
is still unknown.

Title I--Reducing Frivolous Lawsuits

Sec. 101--Statute of Limitations. This section limits the
amount of time during which a patient can file a medical
malpractice action to the later of three years from the date
of injury or three years from the date the patient discovers
(or through the use of reasonable diligence should have
discovered) the injury. Children under the age of 18 have the
later of three years from their eighteenth birthday or three
years from the date the patient discovers (or through the use
of reasonable diligence should have discovered) the injury.
The Republican legislation limits it to the earlier of
three years from the date an injury ``manifests'' itself or
one year from the date discovered, but in no event can it
exceed three years. This makes it more akin to a statute of
repose than a statute of limitations. H.R. 534 also
establishes a statute of repose for children injured under
the age of six that is the later of three years from the date
of manifestation or prior to the minor's eighth birthday.
Sec. 102--Health Care Specialist Affidavit. This section
requires an affidavit by a qualified specialist before any
medical malpractice action may be filed. An extension may be
granted for such an affidavit if at the time the claim is
brought, the claimant has not been able to obtain medical
records or other information necessary for the affidavit. A
``Qualified Specialist'' is a health care professional with
knowledge of the relevant facts of the case, expertise in the
specific area of practice, and in the case of an action
against a physician, board certification in a speciality
relating to the area of practice.
Although the Republicans claim their legislation would
limit frivolous claims, H.R. 534 does nothing to ensure that
the claims filed by plaintiffs are legitimate. H.R. 534 has
no certification process prior to the filing of a medical
malpractice lawsuit. H.R. 534 only restricts the rights of
injured patients and physicians in meritorious lawsuits.
Sec. 103--Sanctions for Frivolous Actions and Pleadings.
This section reduces the frivolous lawsuits by requiring that
every document in a medical malpractice action be signed by
at least one attorney of record. Any unsigned paper is
stricken. Second, all plaintiff attorneys who file a medical
malpractice action are required to certify that the case is
meritorious. Attorneys who erroneously file such a
certificate are subject to strict civil penalties. First time
violators, the court shall require the attorney to pay costs
and attorneys fees or administer other appropriate sanctions.
Second time violators, the court shall also require the
attorney to pay a monetary fine. Third time violators, the
court shall also refer the attorney to the appropriate State
bar association for disciplinary proceedings.
The Republican legislation does not have a provision that
directly addresses the filing of frivolous lawsuits. H.R. 534
only restricts the rights of injured patients and physicians
in meritorious lawsuits.
Sec. 104--Mandatory Mediation. This section establishes a
mandatory alternative dispute resolution (ADR) system for
medical malpractice cases. Participation in mediation shall
be in lieu of any other ADR method required by law or by
contractual arrangements by the parties. States also have the
option to allow arbitration. Any party dissatisfied with the
result reached through ADR will not be bound by this result
and all statements, offers and communication made as part of
ADR would be inadmissible as part of an adjudication. A
similar approach is recommended by the Committee for Economic
Development (CED), which suggests that defendants make and
victims accept ``early offers.'' The effect of the ``early
offer'' program, according to the CED, is that defendants
will reduce the likelihood of incurring litigation costs, and
victims would obtain fair compensation without the delay,
expense, or trauma of litigation.
The Republican legislation does not address alternative
dispute resolution methods to reduce the number of medical
malpractice actions that are litigated. The sole remedy of
the Republican legislation is tort reform that will restrict
the rights of those who have been legitimately wronged.
Sec. 105--Punitive Damages. This section limits the
circumstances under which a claimant can seek punitive
damages in a medical malpractice action. It also allocates
50% of any punitive damages that are awarded to a trust fund
managed by the Department of Health and Human Services (HHS)
through the Agency for Healthcare Research and Quality. The
money in the trust fund must be used for activities that
reduce medial errors and improve patient safety. The
Secretary will promulgate regulations that will establish
programs and procedures to carry out this objective. See
also, Sec. 221-223.
The Republican legislation raises the evidentiary standard,
provides an exemption for FDA approved drugs or devices, and
caps punitive damages at the greater of twice the economic
damages or $250,000.
Sec. 106--Reduction in Premiums. This section requires
medical malpractice insurance companies to annually project
the savings that will result from Title I of the bill.
Insurance companies must then develop and implement a plan to
annually dedicate at least 50% of those savings to reduce the
insurance premiums that medical professionals pay. Insurance
companies must report these activities to HHS annually. The
section provides for civil penalties for the noncompliance of
insurance companies.

Title II--Medical Malpractice Insurance Reform

Sec. 201--Prohibition on Anti-competitive Activities by
Medical Malpractice Insurers. This section would repeal
McCarran-Ferguson Act to ensure that insurers do not engage
in price fixing. The Act, enacted in 1945, exempts all anti-
competitive insurance industry practices, except boycotts,
from the Federal antitrust laws. Over the years, uneven
oversight of the insurance industry by the States, coupled
with no possibility of Federal antitrust enforcement, have
created an environment that fosters a wide range of anti-
competitive practices.
Sec. 202--Medical Malpractice Insurance Price Comparison.
This section creates an internet site at which health care
providers could obtain the price charged for the type of
coverage the provider seeks from any malpractice insurer
licensed in the doctor's

[[Page E1541]]

state. This section specifies the availability of online
forms and that all information will remain confidential.
The Republican bill does nothing to address the flaws
apparent in the medical malpractice insurance marketplace and
the regulation of that market. The sole remedy of the
Republican legislation is tort reform that will restrict the
rights of those who have been legitimately wronged.
Sec. 203--Procedural Requirements for Proposed Rate
Increases. This section allows any health care professional
to challenge a proposed rate increase of medical malpractice
insurance in a State administrative proceeding. It also
requires that before it implements any rate increase, an
insurance provider submit to the appropriate state agency a
description of and justification for the rate increase.

Title III--Enhancing Patient Access to Care Through Direct Assistance

Sec. 301--Grants and Contracts Regarding Health Provider
Shortages. This section authorizes the Secretary of Health
and Human Services to award grants or contracts through the
Health Resources and Services Administration (HRSA) to health
care providers who choose to work in geographic areas that
have a shortage of one or more types of health providers as a
result of dramatic increases in malpractice insurance
premiums.
Sec. 302--Health Professional Assignments to Trauma
Centers. This section amends the Public Health Service Act to
authorize the Secretary to send physicians from the National
Health Service Corps to trauma centers that are in danger of
closing (or losing their trauma center status) due to
dramatic increases in malpractice premiums.
The Republican legislation does not directly address the
access to care issue caused by rising malpractice premiums.
The sole remedy of the Republican legislation is tort reform
that will restrict the rights of those who have been
legitimately wronged.

Title IV--Independent Advisory Commission on Medical Malpractice
Insurance

Sec. 401-402--Independent Advisory Commission on Medical
Malpractice Insurance. This section establishes the national
Independent Advisory Commission on Medical Malpractice
Insurance. The Commission must evaluate the causes and scope
of the recent and dramatic increases in medical malpractice
insurance premiums, formulate additional proposals to reduce
those premiums, and make recommendations to avoid any such
increases in the future. In formulating its proposals, the
Commission must, at a minimum, consider a variety of
enumerated factors.
The Republican legislation only addresses tort reform and
does not examine other causes of malpractice premium costs.
Sec. 403--Report. This section requires the Commission to
file an initial report with Congress within 180 days of
enactment and to file annual reports until the Commission
terminates.
Sec. 404--Membership. This section specifically establishes
the number and type of commissioners that the Comptroller
General of the United States must appoint to the Commission.
Generally, the membership of the Commission will include
individuals with national recognition for their expertise in
health finance and economics, actuarial science, medical
malpractice insurance, insurance regulation, health care law,
health care policy, health care access, allopathic and
osteopathic physicians, other providers of health care
services, patient advocacy, and other related fields, who
provide a mix of different professionals, broad geographic
representations, and a balance between urban and rural
representatives. Members of the commission will be appointed
for three year staggered terms.
Sec. 405--Director and Staff, Experts and Consultants. This
section allows the Commission to hire personnel and contract
services necessary to perform its duties.
Sec. 406--Powers. This section allows the Commission to
secure from any department or agency information necessary to
carry out its purpose. It also requires that the Commission
be subject to a periodic audit by the Comptroller General.
Sec. 407--Authorization of Appropriations. This section
authorizes that such sums be appropriated to the Commission
for five fiscal years.

Title V--Medical Malpractice Insurance Information Administration

Sec. 501--Establishment. This section creates within the
Department of Health and Human Services an administration
that will collect and evaluate information on the medical
malpractice insurance market. Such information includes the
frequency of medical malpractice claims paid, the severity of
such claims, the portion of claims paid as settlements, the
portion of claims paid as a result of a trial, and the
division in claims between economic and non-economic damages.
The section also requires that insurance companies submit the
above data to the administration. The administrator may
compel submittal and there will be a civil money penalty for
not submitting the data.
Sec. 502--Authorization of Appropriations. This section
authorizes appropriations for the administration.

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