Competing bills may complicate reform

Steve Kanigher and Cy Ryan

Wednesday, July 31, 2002 | 11:02 a.m.

CARSON CITY -- Two competing bills designed to stop the medical malpractice crisis in Southern Nevada are on a collision course today in the state Legislature.

The major issues that stand in the way of comprehensive reforms aimed at curbing malpractice insurance rates are mandatory reporting of medical errors and limits on exceptions to a proposed $350,000 cap on damages for pain and suffering.

A bill passed early this morning by the Assembly includes a cap with several exceptions and the requirement for reporting medical errors.

The Senate's version of the bill, which is expected to be passed today, stripped most of the exceptions out of the cap and doesn't require medical errors to be reported.

The exceptions, which became part of a compromise bill introduced Monday, were worked out this weekend in negotiations among Gov. Kenny Guinn, legislative leaders and representatives for doctors, lawyers and insurance companies.

But that compromise fell apart after doctors balked at the exceptions to the cap and the Republican-led Senate was told there wouldn't be much of an insurance rate decrease if the bill passed.

Each house of the Legislature will review the other's bill, but the differences are expected to be settled by a six-member bi-partisan conference committee, made up of three senators and three assemblymembers.

"I don't think it will be that tough to work out," Assembly Speaker Richard Perkins, D-Henderson, said. "Everyone feels strongly about accomplishing tort reform and keeping good doctors."

But the special session's second day showed true dividing lines, which could cause problems as lawmakers negotiate over the differences to try to find long-term reform.

The Democratic-led Assembly voted 32-10 shortly after midnight this morning to pass a bill that includes the cap with eight exceptions, along with a requirement that all medical facilities report medical errors to a repository run by the state health division.

All 27 Democrats and five Republicans voted for the bill, which was approved after a 15-member bipartisan Assembly panel unanimously sent the bill to the floor of the lower chamber.

The Republican-dominated state Senate, meeting as a committee of the whole, passed a bill to the Senate floor late Tuesday night that contains most of the same elements as the Assembly version with the glaring differences of only two exceptions to the cap and no medical error reporting. The Senate version also contains far broader liability protections for doctors who treat trauma patients.

The day was packed with political drama. It began in the morning with Guinn chastising some GOP lawmakers for wanting to bolt from a bipartisan agreement that seemingly was achieved on Monday, complete with a joint appearance of the governor with Senate Majority Leader Bill Raggio, R-Reno, and Perkins.

The intrigue built up by Tuesday afternoon when physicians, who appeared to be on board with the agreement Monday, changed their minds and threatened to pull out. That was after the doctors heard concerns from some insurers that a cap with the eight exceptions passed by the Assembly would do virtually nothing to lower insurance rates.

But after the Senate committee of the whole passed a version with only two exceptions to the cap, the doctors reconsidered and talked as if they may be able to live with the proposed Senate bill.

"It's a great improvement," Dr. Michael Daubs, president of the Nevada Orthopedics Society, said of the Senate bill. "There's no doubt. Yes, that would be our preference. We can deal with that."

Las Vegas surgeon Ikram Khan said he, too, would prefer the Senate version.

"We are given to understand that this version would be better at making insurance affordable," Khan said.

Watching this on the sidelines was Marybel Batjer, Guinn's chief of staff.

"Yes, the governor has concerns about the doctors," Batjer said. "He is concerned that the doctors' patients are taken care of, that women who are pregnant have proper care and that victims of car crashes have trauma care.

"As far as we're concerned the soup is still cooking."

Meantime, trial lawyers who had voiced concerns Monday about the constitutionality of the cap because of its limit on jury decisions, issued a press release Tuesday night praising the Assembly bill while taking swipes at the doctors.

"Now the doctors are coming face to face with insurance executives who are pressuring doctors to go back on the same deal that all of us, physicians, lawyers and lawmakers from both sides of the aisle worked so hard to negotiate," Las Vegas malpractice attorney Jim Crockett stated in the release.

Finally, at 12:15 a.m. today, the Assembly sent its bill to the Senate.

But not before Perkins and Assembly Majority Leader Barbara Buckley, D-Las Vegas, called a press conference in which they chided insurers for "misleading doctors about the alleged negative impacts of the Assembly bill."

"They are just creating fear among physicians in Southern Nevada to drive tort reform and line their own pockets," Perkins said of insurers.

Buckley said that it was a shame that "a couple individuals are trying to derail the process." She referred to critics of the Assembly bill as "fear mongers."

"It sounds like an insurance company that wants to make money on the backs of severely injured individuals," she said. "A lot of misinformation has been stated by people who haven't even read the bill."

Some senators were also upset after Chip Wallace, co-founder of the Nevada Mutual Insurance Co., testified that the original bill with the eight cap exceptions would reduce insurance rates by no more than 2 percent. Raggio said that information should have been disclosed to lawmakers sooner.

"I feel somewhat used," Raggio said. "I am definitely disappointed."

State Sen. Terry Care, D-Las Vegas, said he was "dumbfounded" by that testimony.

"I'm appalled at this," he said.

Las Vegas attorney Jim Wadhams, a lobbyist for the American Insurance Association, told both chambers that their respective bills would probably have a positive impact on rate reduction over time.

But he said before his Assembly testimony that having the eight exceptions to the cap would "significantly lower his estimates of how much the Assembly's tort reform bill would help reduce insurance premiums."

However, longtime insurance executive Robert Byrd, chairman of the Nevada Medical Liability Association created earlier this year by the state to help insure doctors, testified that even the Assembly bill would lower rates over time.

"My reaction is that it is meaningful tort reform," Byrd told the Assembly panel. "Over time I would expect insurers to come back into the market, a reduction in prices and increased competition."

The eight cap exceptions in the Assembly bill include: brain damage, paralysis in one side of the body, paraplegia or quadraplegia, death of a parent, spouse or child, total blindness, loss of a limb, permanent loss or damage to a reproductive organ resulting in sterility, gross malpractice, and cases where a court determines by "clear and convincing evidence that an award of more than $350,000 for pain and suffering is justified.

The Senate version contains exceptions only for gross negligence and cases where a court determines an award of more than $350,000 is justified. In both bills, the most an injured plaintiff can collect for these exceptions is $1 million, which is the limit of liability coverage carried by Nevada physicians per incident.

But as pointed out by Buckley, a person who collects as an example $800,000 in economic damages to cover such items as medical expenses and lost wages, could get no more than $200,000 for pain and suffering.

Proponents of the Assembly version argued that the bill still represents a true cap on pain and suffering because the vast majority of medical malpractice cases would fall under the $350,000 cap.

Such cases could include a botched knee operation or a surgical instrument accidentally left in the patients body, Tim Williams, president of the Nevada Trial Lawyers Association, said.

"Probably 95 percent of all malpractice cases would come under the $350,000 cap," Williams said. "You don't see many wrongful death cases and I can't remember the last case involving blindness or amputation."

Opponents of the Assembly bill, including 10 GOP assemblymembers, said they would rather support a Senate version that has fewer cap exceptions because that would offer a greater guarantee that insurance rates would come down.

Assemblywoman Barbara Cegavske, R-Las Vegas, was among the GOP lawmakers who discussed tort reform with the governor on Sunday. But she said the compromise bill that included the eight cap exceptions took her by surprise and was not something she could support.

Dr. Lonnie Hammargren, a Las Vegas neurosurgeon and former lieutenant governor, said the problem with the Assembly's cap exceptions is that they would involve the cases with the highest damages, thus encouraging insurers to increase rates.

"It's a cap with a lot of exceptions and they're all in the high dollar, lawsuit-prone areas," Hammargren said. "A bill with all those exceptions could reduce rates some but not enough to make it effective."

But Perkins told his colleagues in the Assembly that the lower chamber's bill would provide relief for doctors and injured patients alike.

"This is bipartisan, it's bicameral and it's swift," Perkins said. "I urge you all to pass the governor's consensus tort reform bill."

As for mandatory medical error reporting, Assembly Democrats said such a provision would also help lower insurance rates because the elimination of the errors would also result in fewer malpractice cases. The provision would involve the analysis of errors with corrective actions to be taken by the medical facility in question.

"It's a model system for medical error reporting," Assemblywoman Ellen Koivisto, D-Las Vegas, said. "There's no agency or system in Nevada that tracks medical errors or adverse events. The key to reducing errors is to focus on system improvements and not blame."

But opponents of mandatory reporting, including hospitals, argue that medical facilities already do a considerable amount of voluntary and mandatory reporting.

"To this day I have not found any study that shows that mandatory reporting reduces medical errors," Bill Welch, president of the Nevada Hospital Association, said. "I want to assure you we are equally, if not more concerned, about safe, quality care."

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