Investment income was down in past years, and as a result, the insurance industry began charging higher medical malpractice premiums. The American Medical Association (AMA) is calling for federal legislation that preempts state medical professional liability laws to limit compensation to patients injured by malpractice because the AMA assumes such limits will reduce malpractice rates. However, there is no evidence that limiting compensation to injured patients will have a real impact on malpractice rates. The AMA is carrying on a multi-million dollar public relations campaign to gain public support for such federal legislation and for tort law changes at the state level. Investment income has gone up and insurance rates have adjusted.

In the 108th and the 109th Congresses, President Bush made tort reform a top priority. In the 109th Congress, ABA-opposed legislation, H.R. 5, legislation that would have preempted the state medical liability laws passed the House by a vote of 230-194 (PDF) on July 28, 2005. The ABA sent a letter (PDF) to all members of the House of Representatives opposing H.R. 5. H.R. 5 and S. 354 would have preempted state medical liability laws and, among other things, imposed a cap of $250,000 on pain and suffering awards in states with no caps; capped punitive damages; eliminated joint liability on non-economic damages; and imposed a federal statute of limitations. On May 8, 2006, the Senate, by a vote of 48-42 (PDF), voted not to invoke cloture on S. 22, ABA-opposed legislation that would have preempted the state medical liability laws and imposed federal standards including a cap on noneconomic damages. The ABA sent a letter (PDF) to all Senators opposing S. 22. S. 22 would have imposed a cap on non-economic damages in medical malpractice lawsuits unless a state has enacted or enacts a cap on non-economic damages. Regardless of the number of parties other than a health care institution, the amount of non-economic damages awarded in a cause of action involving such a provider or providers would have been capped at $250,000. The amount of non-economic damages against a single health care institution would have been capped at $250,000. The total amount of non-economic damages against all such health care institutions would have been capped at $500,000. It would also have capped punitive damages, eliminated joint liability on non-economic damages and imposed a federal statute of limitations. In addition, on May 8, 2006, after voting on cloture for S. 22, the Senate considered S. 23, legislation similar to S. 22 except that it would limit liability only for the field of obstetrics and gynecology. S. 23 failed by a vote of 49-44 to get the 60 votes needed to invoke cloture. All the legislation mentioned above died at the end of the 109th Congress. S. 243, legislation the same as S. 22 of the 109th Congress was introduced by Senator John Ensign (R-NV) on January 10, 2007. It was referred to the Senate Committee on Health, Education, Labor and Pensions. S. 244, legislation the same as S. 23 of the 109th Congress was introduced by Senator Judd Gregg (R-NH) on January 10, 2007 and referred to the Senate Judiciary Committee. On December 12, 2007, Senator Gregg (R-NH) offered an amendment to major farm legislation that was on the Senate floor. The amendment would have limited the malpractice liability of obstetricians and gynecologists who practice in towns of 20,000 people or fewer. Non-economic damages would have been capped at $250,000 for a doctor and $250,000 for a medical institution. It lost by a vote of 41-53.

The Medicare Modernization Act of 2003 (MMA), Public Law 108-173, which created the Medicare Prescription Drug program, or Part D, included a provision referred to as "the 45% Trigger." The provision provides that if the Medicare Trustees' finds that, for two years in a row, Medicare spending from general revenues (as contrasted with payroll taxes and premiums) is projected to exceed 45% of total Medicare spending for the current or following six years, it shall be treated as a "funding warning." Such a finding triggers a statutory requirement that the President must submit legislation to Congress to address the funding situation.

The conditions established by the law have now occurred, and the President sent proposed legislation to Congress. It has been introduced in the House as H.R. 5480 by House Majority Leader Hoyer (D-MD). He said he only introduced it because it was his legal obligation to do so. He said that while “some of the items in the proposal deserve consideration, the proposal includes provisions that I oppose. For example, I have consistently voted against medical malpractice proposals similar to the proposal included in this package.” It was introduced in the Senate as S. 2662 by Senator Baucus (D-MT) by request as well. Among other things, it would preempt state medical liability laws in the following ways:

-Set a statute of limitations of 3 years after manifestation of the injury or one year after the claimant discovers or should have discovered the injury (whichever comes first) on all health care lawsuits;

-Cap non-economic damages at $250,000 and prohibit the jury from being informed of the cap;

-Cap attorney's contingency fees;

-Permit the introduction of collateral source benefits in all health care lawsuits;

-Cap punitive damages awards;

-Upon request of any party, provide for periodic payment of any damage award over $50,000;

-Eliminate joint liability.

The law dictates special procedures for Congressional consideration of such legislation. Under the procedures, the President's proposal, or an alternative proposed by a member of Congress to address the same issues, is likely to be considered.

• Congress should not substitute its judgment for the systems that have thoughtfully evolved in each state over time. If enacted, the proposed legislation would preempt the rights of states to administer medical liability laws, an authority that has rested with the states for over 200 years. This system is a hallmark of our American justice system. Because of the role they have played, the states are the repositories of experience and expertise in these matters.


• There should be no ceilings on pain and suffering awards. Instead, the courts should make greater use of their powers of remittitur to set aside excessive verdicts.


• There is no evidence that caps on pain and suffering awards will reduce medical malpractice premiums.


• Proposals to limit non-economic damages deprive individuals of compensation for the consequences of medical malpractice injuries. No one has stated that such injuries are not real or severe; in fact, non-economic injuries may far exceed economic damages. These proposals, if enacted, would make seriously injured persons who are the least able to afford it receive less than full compensation, and thus help subsidize recoveries for less seriously injured persons who would be fully compensated. This would be grossly unjust and doubly so since it would not appreciably affect the cost of health care.

The ABA urges the legal and medical professions to cooperate in seeking a solution to medical liability problems and maintains that federal involvement in the area is inappropriate. In particular, the ABA opposes caps on pain and suffering awards, supports retaining current tort rules on malicious prosecution, collateral sources and contingent fees, and believes that the use of structured settlements should be encouraged. It also supports certain changes at the state level in the areas of punitive damages, jury verdicts and joint and several liability.