Senate approves measure to limit
malpractice costs
Friday, March 21, 2003
BY ROBERT SCHWANEBERG
Star-Ledger Staff
Dealing a defeat to the powerful trial lawyers lobby, the Senate passed a physician-backed bill yesterday intended
to halt spiraling medical malpractice insurance premiums in high-risk specialties such as
obstetrics and neurosurgery.
But the measure faces an uncertain future in the Assembly, where Democratic leaders object to the $300,000 limit
the bill places on how much physicians and their insurers must pay to malpractice victims for
their pain and suffering. They also fear a new state fund that could pay victims an additional $700,000 might go bankrupt.
Yesterday's 32-5 vote in favor of the bill was a defeat for the state chapter of the Association of Trial Lawyers of
America (ATLA-NJ), which opposed it. Of the 15 senators who are lawyers, 10 voted in favor of the bill; all five
no votes were cast by senators with law degrees.
"It isn't a perfect bill," Sen. Diane Allen (R-Burlington) said. "What it does do is stem the hemorrhaging of doctors
from the state of New Jersey."
Under the bill, malpractice victims still could collect their full economic damages -- lost wages and medical
expenses -- but awards for pain and suffering would be limited. Physicians' insurers would pay a maximum of
$300,000. If a jury awarded a higher amount, victims could collect up to an additional $700,000 from a state fund,
but only if the fund had enough money on hand to pay.
The fund would collect an estimated $20 million a year through $50-a-year
assessments on lawyers and health care providers and a yearly tax on
employers of $3 per employee.
Although the bill normally would go to the full Assembly for approval of the Senate changes, Assembly Speaker
Albio Sires (D-Hudson) said he is sending it to the health and insurance committees for a public hearing.
"Let me be absolutely clear: We are not rubber-stamping a plan that was drafted without the participation and input
of the Assembly," Sires said.
He said Assembly Democrats still favor a different approach that would give state subsidies to physicians in
high-risk specialties to cover up to half of their premium increases.
On Wednesday, the Medical Society of New Jersey unveiled an independent actuarial study that concluded that
alpractice jury awards and settlements are driving up premiums and will continue to do so unless
changes are made.
The study's author, James Hurley, said it would be "a mistake" to expect rates to go down because of an improving
economy.
Hurley said the Senate bill passed yesterday probably would not translate into rate reductions, but should keep
malpractice premiums from climbing even higher.
"We're already hearing that insurance companies are preparing large rate increases again," said Ray Cantor,
director of governmental affairs for the Medical Society of New Jersey. "This is not a problem that is going to go
away, and it's not one that can be fixed by a Band-Aid approach of subsidies."
The trial lawyers and physicians are two of the most influential forces at the Statehouse. In the past two years,
ATLA-NJ spent $599,730 to influence lawmakers through lobbying and political contributions; the
Medical Society was right behind at $550,265.
The Assembly had passed its own medical malpractice bill last December, but that measure was completely
rewritten by the Senate health and commerce committees. The bill now goes back to the
Assembly, which is not scheduled to meet until May 15 because lawmakers are conducting budget hearings.
Sen. Robert Singer (R-Ocean), one of the sponsors of the bill that passed yesterday, said his "greatest fear" is that
the Assembly would "amend the bill to the way it was and send it back--which would stalemate the entire
issue."
Cantor said he hopes to persuade Assembly leaders that "substantial tort reform" is needed and that the fund
created by the Senate version is set up so there is no way it can go bankrupt.
The complex bill also imposes new time limits on lawsuits by injured minors, new requirements for expert witnesses
and tighter oversight of the medical malpractice industry by the state insurance commissioner. In
addition, it has provisions intended to allow physicians who are wrongly accused of malpractice to get out of lawsuits early.