June 29,2005

Baucus, Enzi Introduce Bill to Promote State Alternatives To Medical Tort Liability System

(WASHINGTON, D.C.) – Sen. Max Baucus (D-MT), ranking member of the Committee onFinance, and Sen. Mike Enzi (R-WY), chairman of the Committee on Health, Education, Labor,and Pensions, today introduced legislation to promote state-based demonstrations of alternativesto current medical tort liability litigation.

“This bill tackles the medical liability issue from a new perspective, through a set of pilotprojects centered on improving patient safety,” Baucus said. “We need to think creatively to tryto solve the problem of rising medical liability premiums.”

The Enzi/Baucus measure authorizes the Secretary of Health and Human Services to fundstate demonstration projects to test alternatives to current health care-related dispute resolutionsystems.

“Our current medical justice system does not provide prompt or fair compensation toinjured patients. It’s racked by inconsistencies and delays, and the majority of patients who suerecover little, if anything,” said Senator Mike Enzi, Chairman of the Senate Health, Education,Labor and Pensions Committee.

The bill will allow an increased number of patients to receive their payments for injuriesin an accurate, timely manner. It also encourages patient safety by promoting disclosure ofmedical errors.

“I am deeply concerned about rising medical liability costs,” Baucus said. “Thislegislation strikes the right balance, giving states incentives to streamline the medical liabilityprocess.”

A brief summary of the bill follows:

The Fair and Reliable Medical Justice Act would establish state-based demonstrationprograms to help states test alternative systems of health care-related dispute resolution underthree different models: early disclosure and compensation; administrative determination ofcompensation; and special health care courts. Under the bill, states may develop other plans forresolving health care related disputes as well.

The early disclosure and compensation model encourages health care providers todisclose medical errors that result in harm to patients and to offer just compensation for patients’injuries. Under this model, disclosures and offers of compensation do not constitute admissionsof liability by providers. It assures patients of compensation for their net economic loss, noneconomiclosses, and attorney’s fees, in a timely manner. It also maintains patients’ access to thetraditional legal system in the event that claims cannot be resolved by the early disclosureprocess. This model does not affect patients’ rights to bring court cases that result from criminalor intentional harm or fraud.

Under the administrative determination of compensation model, a state would create anadministrative board that would bring together patient advocates, providers, and attorneys. Theboard would establish classes of avoidable injuries and determine compensation rates for each,but patients would be assured of compensation for their net economic loss, non-economic losses,and attorney’s fees.

The special health court model ensures that cases are adjudicated by judges with specialhealth care expertise, assisted by independent expert witnesses. Judges who sit on the specialhealth care court would be subject to all the same criteria as any other state judge and would siton the health care court voluntarily. Under this model, states would have to provide an appealsprocess for reviewing decisions of the special health court.

A 2002 Institute of Medicine report entitled “Fostering Rapid Advances in Health Care:Learning from System Demonstrations,” which suggested state-based demonstrations in the areaof medical liability reform, helped shape the Fair and Reliable Medical Justice Act.