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Summary:
The rising cost of medical malpractice insurance is of concern to Congress largely because of its potential impact on the availability of health care providers and services. As malpractice insurance becomes increasingly expensive, some physicians claim that premium increases have forced them to limit the services they provide, move their practice locations, or leave medicine altogether. This is especially the case for certain specialists who have experienced the largest premium increases. Some providers have gone on strike to publicize their plight. They cite excessive malpractice lawsuits and unreasonably large jury awards as the causes of the malpractice insurance "crisis." Some lawyer and consumer groups counter that the insurance industry is to blame for the rapid rise in malpractice insurance premiums. These groups contend that bad investment choices, in addition to the underwriting cycle, have led to dwindling profits for insurers, who then try to recoup their losses through expensive insurance products. Abetting this, in their eyes, is an exemption from the normal federal antitrust law for insurers. Congressional debate on these issues generally has conformed to the contrasting perspectives mentioned above. During the first session of the 109th Congress, some Members, notably both House and Senate majority leadership, attributed the rise in malpractice insurance premiums to "frivolous" lawsuits and large jury awards. Other lawmakers respond that spikes in malpractice insurance premiums are the result of the insurance underwriting cycle and sagging insurer investments. In addition, there is a third perspective, which has not generated the same level of attention or controversy, that sees the overall medical error rate as the root of the problem. Given the malpractice insurance debates from previous sessions, proposals for legal changes (H.R. 5, which has passed the House, and S. 22 and S. 23, which are currently being debated in the Senate) most likely will be high on the legislative agenda. These bills are designed to decrease the overall number of malpractice lawsuits and the payment amounts awarded in successful claims. Examples of specific reforms include establishing a federal statute of limitations, restricting attorneys' fees, and placing caps on the amount juries may award in damages. Proposals addressing the insurance side (S. 1525, H.R. 3359) include a range of strategies to constrain the cost of malpractice insurance, such as greater oversight of the insurance industry and stabilizing the reinsurer market in order to limit the liability that primary insurers face in the event of extraordinary loss. Some Members also have expressed interest in alternatives to tort and insurance reforms. Among the proposals introduced during the 109th Congress are efforts to disclose medical error data (S. 554, now P.L. 109-41), establish administrative proceedings (S. 1337), and award tax credits to physicians to help cover premium costs (H.R. 2291). This report will be updated in the event of major legislative activity.
