Senator Feinstein Opposes Medical Malpractice Bill Being Considered by the Senate

Senator Feinstein Opposes Medical Malpractice Bill
Being Considered by the Senate

- Feinstein believes measure she worked out with Sens. Frist and McConnell
could serve as basis for bipartisan compromise -
July 8, 2003

Washington, DC - U.S. Senator Dianne Feinstein (D-Calif.) today announced her opposition to legislation being considered on the Senate floor that would put severe caps on the amounts that juries could award victms of medical malpractice.

Earlier this year, Senator Feinstein worked with Majority Leader Bill Frist (R-TN) and Senator Mitch McConnell (R-KY) to develop a compromise on the issue, based largely on the California medical malpractice law, with a number of modifications. The most significant provisions of the Feinstein proposal would have:

Established a $500,000 general cap on noneconomic damages (eg., pain and suffering). In catastrophic cases, where a victim of malpractice was subject to severe disfigurement, severe disability or death, the cap would be the greater of $2,000,000 or $50,000 time the number of years of life expectancy of the victim. This would not pre-empt states from having lower or higher caps.

Set a reasonable standard for punitive damages. Under the Feinstein proposal, a plaintiff would have to show by clear and convincing evidence that the defendant:

(i) intended to injure the claimant unrelated to the provision of health care, or

(ii) understood the claimant was substantially certain to suffer unnecessary injury, and in providing or failing to provide health care services, the defendant deliberately failed to avoid such injury, or

(iii) acted with a conscious, flagrant disregard of a substantial and unjustifiable risk of unnecessary injury which the defendant failed to avoid, or

(iv) acted with a conscious, flagrant disregard of acceptable medical practice in such circumstances.

Senator Feinstein continues to believe that her proposal could serve as the basis for a bipartisan compromise. The American Medical Association and the California Medical Association, however, have rejected the Feinstein proposal and because of this opposition, Senator Feinstein is not proposing an amendment at this time. The following is the prepared text of Senator Feinstein's statement:

"I have followed the issue of rising medical malpractice premiums for many decades. It has been a persistent and growing problem in many states. For California, the issue reached a critical stage 28 years ago and resulted in the enactment of a reform bill known as the Medical Injury Compensation Reform Act, or MICRA.

MICRA set the precedent for reform measures in several states which followed with their own reform measures in the ensuing years. The Senate bill before us now, which is nearly identical to the House-passed legislation, is not one that I can support. This bill sets a national cap of $250,000 for noneconomic damages in medical malpractice suits. This cap applies not only to suits against doctors, but to suits against HMOs, nursing homes, and medical product manufacturers. Moreover, this cap would apply even for extraordinary cases like that of Jessica Santillan, a 17 year-old who died after doctors mistakenly transplanted the wrong kidneys into her body.

So, under this bill, suits against drug and device manufacturers like the makers of the weight loss drug Phen-Fen, the Dalkon shield contraceptive device, faulty heart valves, and other products that have caused innocent deaths would be limited to $250,000 in noneconomic damages.

Secondly, this legislation severely limits the availability of punitive damages not only for doctors but also for manufacturers. In general, punitive damages are capped at the greater of $250,000 or twice economic damages. The bill also wipes out punitive damages in several different types of lawsuits against medical product manufacturers. It would immunize the manufacturer or seller of drugs from punitive damages for any packaging or labeling defects on their products. So, presumably, if a drug package label had mistakenly directed a patient to take 10 pills a day instead of one, a patient could not sue for punitive damages - regardless of the harm caused or the basis for the mistaken directions.

It would also limit the availability of punitive damages against any manufacturer or distributor of medical products if the product complies with FDA regulations. Such an exemption could apply to products like the Bjork-Shiley artificial heart valve which originally received FDA approval. These valves broke in an estimated 619 patients leading to hundreds of deaths.

I believe this FDA-exemption sets a downward course. If a company has an FDA-approved product on the market and then learns of dangerous complications, it must remove the product from the marketplace immediately. To provide an exemption if the product has FDA approval may very well be a disincentive to prompt removal from the shelf.

While I cannot support this proposal, there are, however, proposals for which I could support, because I do believe rising insurance premiums are creating a crisis in access to care. Consider this:

Obstetricians and gynecologists in Florida are paying over $200,000 a year for malpractice insurance as opposed to $57,000 in California.

Surgeons in Michigan are paying $110,000 a year for malpractice coverage.

Twenty percent of the obstetricians and gynecologists in West Virginia and Georgia have been forced out of their practice due to rising premiums.

900 doctors in Pennsylvania have left the state since 2001 to avoid annual premiums as high as $200,000.

The Methodist Hospital in Philadelphia discontinued its pre-natal care program for low-income women because of high premium costs.

All of the neurosurgeons in Wheeling, West Virginia have left the area and local trauma patients requiring neurosurgery need to be airlifted out of state.

Not only are insurance premiums skyrocketing in some states, but insurers are leaving the market. There were 14 companies underwriting liability in Mississippi; today there is but one willing to write new policies. Texas had 17 insurance carriers; today it has four. While I oppose the bill before us today, Congress can and, I believe, should provide legislative relief. I believe that California's MICRA bill provides a model. I have spent a number of months reviewing MICRA to see what could be transferred to the national level. And I believe that reasonable caps on liability can lead to affordable premiums.

At the time MICRA was enacted in 1975, the cost of health insurance in California was higher than in any other market except New York City. In the six years before 1975, the number of malpractice suits filed per 100 physicians in California more than doubled. MICRA has kept costs down. In 1975, California's doctors paid 20% of the gross costs of all malpractice insurance premiums in the country. Californian doctors now pay just 11% of the nation's total malpractice insurance premiums. California's premiums grew 167% over the past 25 years, compared to 505% in all other states. In other words, premiums grew three times slower in California than in other states.

Because of MICRA, patients get their money faster. Cases settle 23% faster in California than in states without caps on noneconomic damages. MICRA allows patients to obtain health care costs, recover for loss of income, and receive the funds they need to be rehabilitated. California's malpractice premiums are now one-third to one-half lower on average than those in Florida or New York. Because California law has proven successful at keeping premiums down, I used the law as a departure point for crafting a proposal which I believe is both just and fair and which I believe should stabilize and, over time, reduce premium costs.

I personally appreciate the efforts of Senator Frist and Senator McConnell to work with me to explore this option. Specifically, a fair proposal would:

create a schedule for attorneys fees;

create a strict statute of limitations, requiring that medical negligence claims be brought within one year from the discovery of an injury or within three years of the injury's occurrence.

require a claimant to give a defendant 90 days notice of his or her intent to file a lawsuit before a claim can actually be filed.

allow defendants to pay damage awards in periodic installments.

allow defendants to introduce evidence at trial to show that claimants have already been compensated for their injuries through worker's compensation benefits, disability benefits, health insurance or other payments.

permit the recovery of unlimited economic damages.

But, my proposal differs from California law in two key areas: (1) noneconomic damages, and (2) punitive damages. The California MICRA law has a $250,000 cap on noneconomic damages. In contrast, I would propose a $500,000 general cap on noneconomic damages. In catastrophic cases, where a victim of malpractice was subject to severe disfigurement, severe disability or death, the cap would be the greater of $2,000,000 or $50,000 time the number of years of life expectancy of the victim.

This is in line with many state caps:

Only three states have a $250,000 hard non-economic cap - California Montana, and New Hampshire.

More frequently, states have hard non-economic caps that range from $250,000 to $500,000. This includes Alaska, Florida, Hawaii, Louisiana, Massachusetts, Michigan, Mississippi, Nevada, North Dakota, Oregon, South Dakota, and Texas.

Some states - Maryland, New Mexico, and West Viriginia - have even higher hard non-economic caps, from $500,000 to $1 million.

And three states have caps higher than $1 million - Indiana, Nebraska, and Virginia.

Additionally, six states have soft caps that range from $250,000-500,000 - Colorado, Idaho, Illinois, Missouri, Utah, and Wisconsin.

This clearly shows that a $500,000 cap for non-economic damages is well within the mainstream of states.

In addition, the proposal has a less onerous punitive damages standard than California law. California law would require a plaintiff to prove punitive damages under the very high standard of fraud, oppression, or malice. Under this standard, I am not aware of a single case where a plaintiff has obtained punitive damages in California over the past 10 years.

Instead, I would offer a four-part test where a plaintiff would have to show by clear and convincing evidence that the defendant:

(i) intended to injure the claimant unrelated to the provision of health care, or

(iii) acted with a conscious, flagrant disregard of a substantial and unjustifiable risk of unnecessary injury which the defendant failed to avoid, or

(iv) acted with a conscious, flagrant disregard of acceptable medical practice in such circumstances.

I firmly believe that a variant of this type of proposal could lead to a compromise in the Senate.

But, the American Medical Association and California Medical Association both flatly rejected this proposal.

They refuse to move from a cap of $250,000 for noneconomic damages even in catastrophic cases. To me, this makes little sense because a $250,000 cap in 1975, adjusted for inflation, was worth $839,000 in 2002. If $250,000 was adequate in 1975, why wouldn't a figure of $500,000 - which is lower than the cap adjusted for inflation - be acceptable in 2003. If a victim receives $250,000 today, it is the equivalent of $40,000 in 1975. There are many specific instances of why a $250,000 noneconomic damage, especially today, remains too low. Let me share one such case.

Linda McDougal, 46, a Navy veteran, accountant, and mother, was diagnosed with an aggressive form of cancer and underwent a double mastectomy. Two days later, she was told that a mistake was made, she didn't have cancer, and that the amputation of her breasts was not necessary. A pathologist had mistakenly switched her test results with another woman who had cancer.

So, a cap on noneconomic damages must take into account severe morbidity produced by a physician's mistake, such as amputating the wrong limb or transfusing a patient with the wrong type of blood. Unfortunately, because of the opposition of both the AMA and CMA, I am not proposing an amendment at this time. My purpose was to help physicians and patients and I deeply believe that a $500,000 noneconomic damage cap coupled with a catastrophic exception would accomplish this. We also would allow a State law to prevail. So, the California MICRA law, or any other State law, would prevail - regardless of whether it is retroactive or prospective.

Unfortunately, I could not get 60 votes for this proposal with the opposition of physicians - so the result may well be a stalemate because I do not believe the House bill can pass the Senate in its present form. I remain a supporter of malpractice insurance reform. If at any time there would be physician support, I believe the necessary 60 votes could be generated.

In conclusion, I will vote against this bill, but stand ready to participate in a solution along the lines I have mentioned."

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