Government Relations: New Challenges and the Ongoing Erosion of Liability Reform 

Anne E. Bryant, Senior Director of Government Relations

Legislative advocacy is essential to Physicians Insurance/MedChoice’s purpose to protect, defend, and support our Members. We participate at both the national and state levels as a leading advocate in the judicial, legislative, and regulatory environment to ensure that Members’ concerns are heard by lawmakers on issues that impact medical professional liability. 

In addition to tackling emerging legislative issues, we’re also fighting efforts to remove long-established liability protections that erode the progress made by past reforms. Here’s a summary of key happenings and our efforts to support our Members in the delivery of quality, affordable, accessible healthcare services.

Overview

The current challenges our industry faces in the legislative landscape are many, from the criminalization of medicine in the form of criminal prosecution of medical negligence and new criminal regulations targeting physicians and other practitioners in the reproductive-health arena, to legislative proposals that have been introduced to address telemedicine liability concerns as telemedicine services continue to expand. Although there are some positives, such as comprehensive legislation that has been introduced to improve the liability system and promote meaningful patient safety initiatives (similar to California’s MICRA), the current congressional environment is an obstacle for any successful passage of reform measures in the near future.

Also, as some legislators look to broaden the reach of California’s MICRA benefits, others are succeeding in efforts to erode MICRA protections like noneconomic damage caps. These caps limit the amount of damages for subjective harms, such as pain and suffering, and help to protect against the rising cost of healthcare that can result from excessive awards.

Since California’s MICRA is the model upon which several states’ noneconomic damage caps were set—as well as the model for any federal legislation on noneconomic damage caps—the changes in California threaten to have far-reaching implications that may increase costs and curtail access to healthcare. Several states have already identified legislation that further erodes liability reform across our nation. We devote much of our advocacy to the state level, since there is so much important activity there. Here’s a closer look at what’s happening in California and other states.

California 

In 2022, we saw the erosion of California’s liability protections with legislative action supporting an  increase to the $250,000 noneconomic damage cap recoverable in bodily injury and wrongful-death actions, and eliminating other effective liability reform components of MICRA. For medical professional liability this change would negatively impact insurance rates by inflating bodily injury and wrongful-death claims in California. 

After several negotiations, effective January 1, 2023, the new noneconomic damage cap for bodily injury will increase to $350,000 and then increase by $40,000 per year for the next 10 years until it reaches $750,000. The new noneconomic damage cap for wrongful death will increase to $500,000 and then by $50,000 per year for the next 10 years until it reaches $1 million. After the 10-year period, both the bodily injury and wrongful-death noneconomic damage cap will increase by 2% per year. 

Washington

In Washington, current legislation, if passed, will increase the amount of prejudgment interest on medical professional liability claims. Prejudgment interest is additional money that a court can award to a plaintiff to compensate them for interest they would have earned on a judgment while they were entitled to that money. 

Under current Washington State law, prejudgment interest begins accruing after a case is decided and recorded in the court docket. Under the proposed legislation, interest would instead begin running from the date an injury or event is believed to have first occurred. This means that interest could start to accrue before a defendant even becomes aware of a claim and before a claim is investigated and resolved. 

If passed, the proposed legislation would effectively incentivize plaintiffs to delay filing, litigating, or settling claims in a timely manner, adding to the continued inflation of damages and the erosion of liability-reform efforts meant to resolve medical professional liability claims efficiently and reduce the rising costs of healthcare.

Oregon

An impactful ruling in 2020 by the Oregon Supreme Court began the erosion of the $500,000 noneconomic damage cap for bodily injury. Immediately after that, in 2021, the Oregon State Legislature passed legislation that completely eliminated the $500,000 noneconomic damage cap, except in cases of wrongful death. (Wrongful death involves claims by survivors to recover compensation for the loss of a loved one.) 

With the $500,000 noneconomic damage cap for wrongful death still in effect, continuous defense is necessary against proposals that increase or eliminate this cap.

Also, the Oregon State Legislature, after several months of negotiations, made Oregon one of the few states unwilling to offer any medical professional liability protections for healthcare providers or physicians providing care during the pandemic.

Conclusion

Despite these challenges, our duty to our Members has not wavered. We remain true to our mutuality and founding principles and will continue to put our Members first in every business decision and in all the products and services we provide. We will continue to serve as a trusted, reliable source of information for our Members and lawmakers at every level. We will continue to be a leading advocate to support our Members by defending the practice of good medicine and protecting against the erosion of liability reform, now and in the future. 

 


Why Legislative Involvement Matters

When it comes to professional liability, legislative actions like those in progress today significantly impact the delivery of care. A prime example of this can be seen by looking back on the important legislative history Washington state has faced, which still has meaningful ramifications for both patients and providers. 

In 2005 Washington debated two separate ballot initiatives aimed at reforming professional liability. The first, known as the Washington Medical Malpractice Act, would have established a government-run malpractice insurance program, imposed a “three strikes, you’re out” license revocation after three malpractice incidents, limited the number of expert witnesses, and required unnecessary reporting. The other, known as the Washington Negligent Health Care Act, would have limited noneconomic damages in medical malpractice cases, limited attorney fees, changed the statute of limitations, and modified joint and several liability—a provision that makes all parties in a lawsuit responsible for the damages awarded to a plaintiff. 

Both of these ballot initiatives were defeated, which led to the signing in 2006 of the Health Care Liability Reform Light. This allowed for the admissibility of an apology/sympathy and aimed to improve healthcare by increasing patient safety, reducing medical errors, reforming medical malpractice insurance, and resolving medical malpractice claims fairly without imposing mandatory limits on damage awards or fees.

Since that time, several components of Health Care Liability Reform Light have been ruled unconstitutional by the Washington State Supreme Court. And in the years following, other liability reforms have been eroded or continue to be threatened in the Washington State judicial, legislative, and regulatory environment—bringing us to where we are today, with reform measures being challenged in multiple states. 

For our team at Physicians Insurance/MedChoice, knowing the impact that legislative changes can have upon our Members drives us to advocate for legislation that supports good medicine for patients, for physicians and other healthcare providers, and for healthcare as a whole.