WASHINGTON — Low-income people and older Americans would find it more difficult to win lawsuits for injuries caused by medical malpractice or defective drugs or medical devices under a bill drafted by House Republicans as part of their plan to replace the Affordable Care Act.
The bill would impose new limits on lawsuits involving care covered by Medicare, Medicaid or private health insurance subsidized by the Affordable Care Act. The limits would apply to some product liability claims, as well as to medical malpractice lawsuits involving doctors, hospitals and nursing homes.
Sean Spicer, the White House press secretary, said the bill would limit “frivolous lawsuits that unnecessarily drive up health care costs.”
But Democrats and plaintiffs’ lawyers said it would take rights away from people served by federal health programs, including those harmed by horrific medical mistakes.
In renewing their effort to devise a replacement for the Affordable Care Act, Republicans say one chief aim is to slow the growth of health spending. Rep. Robert W. Goodlatte, R-Va., the chairman of the House Judiciary Committee, said the malpractice limits would reduce health costs, increase access to care and save taxpayers billions of dollars.
The nonpartisan Congressional Budget Office estimates that the bill would reduce federal budget deficits by almost $50 billion over 10 years. Under the bill, the budget office said, doctors would slightly decrease the use of diagnostic tests and other services that they perform to reduce their exposure to lawsuits. Doctors have long said such “defensive medicine” adds to the cost of care.
But Rep. Jamie Raskin, D-Md., said the bill would deny full restitution to many victims of medical malpractice. Rep. Steve Cohen, D-Tenn., said the bill’s restrictions would apply even in cases of “egregious medical error,” such as when a foreign object is left inside a patient’s body or surgery is performed on the wrong body part.
Kimberly A. Valentine, a lawyer in Orange County, California, who has represented scores of nursing home residents, said the House bill “would make it much more difficult for victims of elder abuse to seek redress and would eliminate one of the most powerful tools we have to improve care in nursing homes.”
The bill would set a $250,000 limit on “noneconomic damages,” which include compensation for pain and suffering, though states could set different limits.
California has long had a $250,000 cap on noneconomic damages in medical malpractice cases. But under state law, elder abuse cases are exempt from the limit. Valentine said she had obtained verdicts and settlements exceeding $250,000 for relatives of many patients who had died because of infected bedsores, medication mix-ups, malnutrition, dehydration or a failure to provide care.
The bill would not limit a patient’s ability to recover economic damages, for medical expenses or lost earnings. If more than one defendant was responsible for an injury, the jury would award damages against each one in proportion to the share of responsibility.
The bill says that a doctor who prescribes a drug or medical device “approved, licensed or cleared by the Food and Drug Administration” may not be named in a product liability lawsuit against the manufacturer or seller of the product. The bill provides similar protection for pharmacists who fill prescriptions. The bill would restrict contingency fees that lawyers can charge for representing plaintiffs in health care lawsuits.
The measure would limit claims related to coverage provided “via a federal program, subsidy or tax benefit.” Brian K. Atchinson, president of the Physician Insurers Association of America, a trade group for insurers, said this meant that the House bill would apply to health insurance provided by employers, because the federal government provides a tax break for such coverage. The tax-free treatment of employer-provided health benefits is one of the largest tax breaks in the tax code, costing the government more than $150 billion a year in lost revenue, according to the Congressional Research Service.
The costs of the medical malpractice system have been hotly debated for years. Reliable, comprehensive data is not available. Several studies suggest that the costs, including damage awards, legal fees and the effects of defensive medicine, may represent 2 percent to 2.5 percent of national health spending.
The House bill is supported by the American Medical Association, the American Hospital Association and the American Health Care Association, a trade group for nursing homes. But manufacturers of medical devices have mixed feelings about it.
“We support the overall intent of the bill, to reduce litigation burdens on the health care system,” said Greg Crist, a spokesman for the Advanced Medical Technology Association, which represents device makers. “But some of our members are concerned that the bill could actually have the opposite effect and could increase burdens on manufacturers by insulating doctors and other health care providers from any liability related to devices.”
Several provisions of the House bill closely resemble legislation introduced by Tom Price, secretary of health and human services, when he was a House member from Georgia. As a congressman, Price, an orthopedic surgeon, championed legislation that would set limits on damages and make it easier for doctors to defend themselves in malpractice lawsuits.
In a report on the latest Republican bill, the House Judiciary Committee referred to a “malpractice insurance crisis” and said that “no doctor is safe from lawsuit abuse.”
Paul A. Greve, who follows malpractice trends as an executive vice president of Willis Towers Watson, a benefits consulting company, said two factors slowed the growth of malpractice claims in the first part of the last decade. “Patient safety initiatives improved care,” he said, “and many states adopted tort reform laws.”
But, Greve said, in the last few years, malpractice insurance became less profitable because of the growing frequency of jury verdicts exceeding $1 million.