House Committee Moves Ahead in Debate of Medical Liability

On Thursday, April 7, 2011, the House Select Committee on Tort Reform presented a revised medical liability reform bill. The two-hour meeting, chaired by Rep. Danny McComas (R, New Hanover), also involved debate on numerous amendments, most of which sought to weaken the proposed reforms. Rep. Johnathan Rhyne (R-Lincoln), who co-chairs the committee with Rep. McComas, spoke extensively on the implications of each proposed amendment.

The NCMS has been devoting extensive resources to this issue and has been working closely with legislative leaders on each provision related to medical malpractice. In addition, through North Carolinians for Affordable Health Care, Inc., the NCMS and others have been executing an aggressive media campaign aimed at building public understanding of the problems with our current liability system. Our goal is to pass meaningful medical liability reform that will take excessive costs out of the civil liability system. Here is a summary of the provisions that are expected to have a significant impact on medical liability actions.

Evidence of medical expenses: Juries would get to hear, for the first time, the amounts actually necessary to satisfy the medical bills that have been incurred. Today, juries only hear the full charges, which often amount to double or triple the amounts paid. This provision is expected to have a very significant salutary effect on the cost of civil litigation in our state.

Appeal Bond Reform: Currently, anyone appealing a civil judgment (including docs who appeal medical malpractice judgments) must purchase a bond for the full amount of the judgment to protect the interests of the plaintiff. Under the proposal, judges would be required to set an amount for appeal bonds based on relevant factors, including the amount of the judgment, the limits of applicable insurance policies, and the net worth of the judgment debtor.

Bifurcation of Trials: The proposal would require courts to hold separate trials (same jury) for the issue of liability and the issue of damages in cases where the plaintiff is seeking more than $150,000. Juries often confuse evidence of harm with evidence of negligence. Separate trials would avoid that confusion. In addition, juries could focus on the threshold issue of negligent conduct (because without negligence, there is no liability), before spending time on evidence of the magnitude of harm.

Punitive Damages Divided Between Plaintiff and the State: Currently, punitive damages are awarded to the plaintiff, even though they have a purpose that is unrelated to compensation of the plaintiff. The proposal would permit the plaintiff to receive the first $100,000 in punitive damages, and 25% of any punitive damages above $100,000. The rest would go to the State Civil Penalty and Forfeiture Fund.

Rule 9(j) Strengthened: The rule requiring plaintiffs to have a qualified expert review  the medical care in question prior to filing a medical malpractice action (i.e., Rule 9(j)) would be strengthened to require the expert to review all of the reasonably available medical records pertaining to the alleged negligence and resulting injuries. An appellate decision had held that the “review” could be done in the abstract without the benefit of medical records.

Medical Malpractice Action Definition Clarified: Actions against hospitals, nursing homes or adult care homes that allege a breach of duty to a patient and that arise out of the same facts or circumstances as an action against a health care provider would be within the definition of a medical malpractice action. The rules unique to such actions would then apply to those cases.

Limited Immunity in Emergencies: The standard of care statute in NC would be amended to specifically require fact finders (typically juries) to consider the circumstances under which care is provided. Additionally, limited immunity would be extended to health care providers during emergencies. Providers found to be grossly negligent would be liable for harm proximately caused by that gross negligence.

Cap on Noneconomic Damages: Noneconomic damages would be capped at $500,000. This cap differs from the cap approved by the Senate. While the Senate cap was not stackable (i.e., payable multiple times in the same case) against an individual defendant, this cap is not stackable at all. No matter how many defendants or plaintiffs, the cap for all noneconomic damages in the case would be $500,000. The cap would be indexed to CPI, adjusted every three years beginning January 1, 2014.

Periodic Payments of Future Damages: Awards of future damages (future medical expenses, care, custody, future earnings, future household services) over $200,000 would be payable by periodic payments.

FDA Defense for Drug Manufacturers and Sellers: Limited protection would be provided for drug manufacturers and sellers provided the drug was approved for safety and efficacy by the US FDA, and the drug and its labeling were in compliance with the FDA’s approval at the time the drug left control of the manufacturer or seller. No protection would be available if the claimant proves that the manufacturer or seller sold the drug after it was ordered to be removed from the market, intentionally violated agency regulations (as determined by final agency action), or withheld or misrepresented relevant, material information to the US FDA to obtain approval, or made an illegal payment to obtain or maintain approval of the drug.

The emergency liability provisions were not discussed at this meeting. They are expected to be discussed when the House Select Committee on Tort Reform continues its debate on this proposal next Thursday at 11:00 A.M.


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