Malpractice reform heads to governor
Tuesday, May 25, 2004
BY ROBERT SCHWANEBERG
Star-Ledger Staff
After 18 months of negotiations, 22 separate votes in the Legislature and an election-year battle between doctors and Democrats, a bill seeking to stem spiraling medical malpractice insurance premiums was finally sent to Gov. James E. McGreevey yesterday.
In a 44-25 party-line vote, Assembly Democrats approved Senate revisions to the bill and sent it to McGreevey. The governor is "likely" to sign it, but wants to give it a final review, said his spokesman, Micah Rasmussen.
"This comprehensive reform measure ensures that doctors will get the financial relief they deserve and patients will get the quality care they need," said Assembly Majority Leader Joseph Roberts (D-Camden), a sponsor.
Although the bill was refined as it went through the legislative process, its central provision remains one Assembly Democrats offered -- and doctors initially rejected -- more than a year ago: a temporary fund to subsidize spiraling malpractice insurance premiums for physicians in high-risk specialties.
As amended in the Senate, that fund would utilize $78.3 million raised over the next three years through an annual tax on employers of $3 per employee and yearly licensing surcharges of $75 on physicians and lawyers. Those assessments would end after three years.
The bill also would set new requirements for bringing a medical malpractice lawsuit and give the state insurance commissioner the power to roll back malpractice insurance rate increases she deems excessive.
"More than two years have passed since the medical liability crisis first appeared," said S. Manzoor Abidi, president of the Medical Society of New Jersey. "Since then, we have lost the services of too many New Jersey physicians."
Abidi said the bill's passage yesterday was "an initial step" toward addressing a "looming crisis" of physicians leaving New Jersey because of the high cost of malpractice insurance.
He called upon McGreevey to "very quickly" appoint a 17-member task force to study whether limiting jury awards would lower malpractice insurance rates. The bill passed yesterday does not limit jury awards, but gives judges greater powers to reduce verdicts they deem excessive.
A legislative stalemate developed last year when the Senate gave bipartisan approval to a version that limited how much negligent physicians or their insurers would have to pay for a patient's pain and suffering and Assembly Democrats blocked it.
The Medical Society of New Jersey responded with an unprecedented door-to-door campaign aimed at electing a Republican Assembly that would enact "caps," or limits, on jury awards. But the gamble backfired as Democrats solidified their control of both houses in last November's election. The Medical Society then dropped its insistence on caps.
Assemblyman William Baroni (R-Mercer) made a last-ditch effort yesterday to amend the bill to include a $250,000 limit on jury awards for pain and suffering in medical malpractice cases, but the Democrats, who control the lower house, defeated it.
Baroni said that without limits on jury awards, the bill "does not solve the problem."
But Assemblyman Neil Cohen (D-Union) said limiting jury awards would not solve the problem either, noting that insurance company executives who testified at legislative hearings refused to promise they would decrease rates if caps were enacted.
Cohen said runaway jury verdicts are not the culprit for skyrocketing malpractice rates. He said the subsidy fund is needed to help physicians get through a periodic spike in malpractice insurance rates that is due to economic factors, including bad business decisions by what had been the state's biggest malpractice insurer.
Cohen added that the bill also makes "dramatic changes to the legal process" to stabilize malpractice insurance rates. Among other things, it sets a deadline of a child's 13th birthday for suing for injuries caused at birth, toughens requirements for expert witnesses and provides a way for medical professionals who did not treat the patient to get out of a lawsuit early.
Edwin McCreedy, the new president of the New Jersey State Bar Association, said it would be "outrageous" to tax all 70,000 lawyers in the state $75 a year when perhaps only 300 of them handle medical malpractice cases. He said the association is considering challenging that assessment in court.