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Matheny Predicts More Tort Reform at Doctors Town Hall

House Speaker Pro Tem Judd Matheny says the Legislature will probably seek more tort reform next year, and Gov. Bill Haslam, no fan of the new federal health care law, says it’s time to start talking about how to implement the new act anyway.

Those developments show that health care issues remain very much on the table for Tennessee. While tort reform is usually thought of as a legal issue, proponents of limiting malpractice and wrongful death lawsuits have cited litigation as a driver of health care costs.

Matheny, R-Tullahoma, told a Doctors Town Hall audience at Lipscomb University in Nashville on Saturday that he hopes this year’s tort reform legislation is only “the first step of several steps in issues we hope to deal with in regard to tort reform.”

During a break in the formal discussion, Matheny elaborated on those plans and pointed to a so-called “loser pays” effort that could be the next measure in tort liability in Tennessee.

“I just know the General Assembly is very interested in additional tort reform,” Matheny said.

“‘Loser-pays’-type scenarios are ones we will look at, especially with regard to what would be perceived as malicious lawsuits.”

Matheny said potential legislation would address situations where there are possibly second or third appeals in cases.

“A case in point would be if somebody filed a third appeal and the answer was the same as the first two, whether both are in the negative or both in the positive. That person would be responsible for the legal fees,” he said.

The approach would be to confront those who are seen as abusing the system. It would follow a tort reform measure passed this year and spearheaded by Haslam that put caps on non-economic damages in civil cases at $750,000, although the law creates exceptions in cases that involve intentional misconduct, destruction of records or activity under the influence of drugs or alcohol.

Those caps go to $1 million in what are categorized as “catastrophic” cases, which are defined in the law as conditions of paraplegia, quadriplegia, amputation, especially severe burns or the wrongful death of a parent leaving minor children. The new law also caps punitive damages at two times compensatory damages or $500,000, whichever is greater.

Matheny said he would like to see the caps in the law go even lower — to around $250,000 or $300,000 — but he said he did not foresee the Legislature taking that path.

“There will probably be a lot of (tort reform) legislation filed, but there will probably be one thing that rises to the top and is carried by the body,” Matheny said. “I don’t know what that will be yet, but I think there will be some additional tightening.”

Matheny said he has not spoken to Haslam about further tort reform and that Haslam probably wants to give the most recent law a chance to take effect. But there seems to be little doubt that the Legislature is prepared to consider further steps on the topic.

“It’s important to remember that sometimes progress is made in baby steps and after a three- or four-year period maybe we can look back and really see some true progress,” Matheny said.

Spine surgeon says government doesn’t help

The town hall audience Saturday at Lipscomb was an overwhelmingly conservative crowd, with 10 panelists and audience members expressing dislike of the 2010 federal health care overhaul.

Dr. Lee Heib, a spine surgeon and president of the Association of American Physicians and Surgeons, spoke of her practice as a small business owner.

“If you have to run a small business, if you have to produce something, when has the government come in and made your job easier or more cost-effective? It’s never done that. Trust me, it doesn’t do it in medicine either,” she said.

Andrew Schlafly, general counsel for AAPS, who went to law school with President Barack Obama, said the fundamental problem with the new health care law is that it forces citizens to purchase coverage.

“That is the foundation of it, and that is basically un-American,” Schlafly said. “To force people to buy something you don’t want to buy, it’s never been done before. You can look through the Constitution. You can read it backward and forward and ask yourself, ‘What gives the federal government the authority to force us to buy something we don’t want to buy?'”

That’s the question raised by the Thomas More Law Center in Michigan, which has asked the Supreme Court to review a lower court decision upholding the Patient Protection and Affordable Care Act. The Sixth Circuit Court of Appeals, in Cincinnati, ruled against the center earlier this summer, finding the law to be constitutional.

Legal challenges regarding the act also are pending in the Fourth and 11th circuits. It has not been determined if the high court will take up the issue.

The town hall meeting included state Sen. Mae Beavers, R-Mt. Juliet, who spoke to the audience of about 125 people about her Tennessee Health Freedom Act (SB079), which Haslam has signed, which says government cannot force a person to purchase a product as the new federal law does, and prevents penalties against those who wish to opt out of the system.

Beavers also touted her Health Care Compact legislation (SB326), a states’ rights measure, which would allow states to join forces to control their health care funds. That bill passed in the state Senate this year but not in the House.

Ben Cunningham of Tennessee Tax Revolt told the audience the federal health care overhaul would be such a burden on the state it would force talk of a state income tax.

U.S. Rep. Marsha Blackburn, R-Brentwood, spoke of Tennessee’s problems with TennCare as an example of what can go wrong with government-run health care.

Haslam: State should prepare to implement health care act

Haslam, meanwhile, said in a recent interview that time is a factor in whether to address the new federal health care legislation, commonly referred to as “Obamacare,” which has been overshadowed recently in Washington. The most significant aspects of the law do not kick in until 2014, but the law requires states to be ready in several ways when that time comes.

“I quite frankly am surprised that as the clock ticks closer to 2014 there’s not more conversation,” Haslam said.

But he noted one group is paying very close attention to the issue.

“There is a lot of conversation among governors, saying, ‘We need to be prepared to implement this if it does happen,'” Haslam said, adding that “it would be irresponsible not to.”

The 2010 election year brought a significant uproar about the new law, with talk of repealing it after a new Congress was put in place. But Haslam, who opposes the plan, said the furor about the law has seemed to subside since then.

“A year ago, in the middle of the campaign, that was all the talk,” Haslam said. “I don’t know if in Washington the whole budget and debt issue has eclipsed everything else. I don’t know if that’s the situation.”

The foremost issue in the new law is for states to set up exchanges — marketplaces involving competing insurance plans — where people would shop for what best fits their needs. States must set up their own exchanges or allow people to move into a federal exchange.

Tennessee is already working with various stakeholders and what are known as Technical Assistance Groups (TAGs) on the state’s options. The state is accepting comments and questions about the exchange process at insurance.exchange@tn.gov.

Haslam said the law’s implementation in Tennessee would likely be run through TennCare and the state Department of Finance and Administration. A finance spokeswoman referred questions on the matter to TennCare.

“We’re still watchfully waiting for guidance from CMS,” said Alyssa Lewis, communications manager for TennCare, referring to the federal Centers for Medicare and Medicaid Services. “We’re seeing what’s going to happen when there is more certainty. It’s to see what the options are, and what the appropriate options are for Tennessee.”

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Ramsey: Keeping Non-Economic Damages Cap at $750K Preferable

Lt. Gov. Ron Ramsey said this week he believes Republicans in the Senate prefer the original version of Gov. Bill Haslam’s tort reform bill, and that the legislation will likely move through the Senate simultaneously with that in the House.

Ramsey said he anticipates Senate activity on the bill next week. He said his prediction would be that the Senate would adopt part of the governor’s bill, but not the current House version as amended.

“I think the majority of our caucus likes the governor’s original bill without the amendment,” Ramsey told reporters. “I think the bill to begin with was a compromise.”

A subcommittee of the House Judiciary Committee on Wednesday passed a version of the tort reform measure, which is one of the main legislative efforts on Haslam’s agenda, and it is headed to the full House Judiciary Committee on Tuesday.

The thrust of the legislation, HB2008/SB1522, is to put caps on monetary awards for victims in civil suits. Haslam says the caps will create a more stable business climate for the state. He believes the bill will help create jobs, his top priority as governor.

Ramsey also sees the bill as a way to help create jobs, but he has refused to speculate on a specific number of jobs that could come from the action.

Haslam originally offered a proposal that put caps on non-economic damages in such lawsuits at $750,000. But the legislation immediately became the subject of negotiations behind the scenes among various parties involved.

The administration offered a subsequent version of the legislation that would raise the cap in “catastrophic” cases to $1.25 million. But by the time the subcommittee took up the bill Wednesday, the $1.25 million had been reduced to $1 million.

Herbert Slatery, Haslam’s legal counsel, attributed the changing figures to “the legislative process.”

The $1 million would apply to the most severe cases, such as those that involve amputations or spinal cord injuries that leave victims with paralysis. The $750,000 cap remains in the bill for most cases, and Ramsey’s comments suggest the Senate would like to keep the $750,000 in all cases, as Haslam first proposed.

Advocates for reform say there should be some level of predictability of how big awards could be in cases where victims are harmed. Opponents say such figures should be left to the judicial system, and that legislated caps significantly take away the opportunity for justice in such cases.

The issue has become a matter of emotional appeal, with opponents of the caps offering examples of people who have suffered serious losses. Testimony in committee hearings has included people affected by such cases.

Opponents of the bill have used the star power and persuasiveness of actor and former U.S. Sen. Fred Thompson to head the lobbying effort against the bill. Thompson has appeared before lawmakers but did not address the subcommittee on Wednesday.

Haslam has emphasized that caps will not apply in cases where intentional misconduct comes into play.

The bill includes caps on punitive damages that are two times the amount of compensatory damages in a case, or $500,000, whichever is greater.

It is possible other amendments will be offered on the legislation.

“On any kind of issue, you can argue extremes on both sides,” Ramsey said. “You kind of look at what’s reality in real life, and I think that’s what we’re doing.”

The legislation defines “catastrophic loss or injury” as cases that involve spinal cord injury resulting in paraplegia or quadriplegia; amputation of two hands, two feet or one of each; third-degree burns over 40 percent or more of the body as a whole or third-degree burns up to 40 percent or more of the face; or wrongful death of a parent leaving a surviving minor child or children for whom the deceased parent had lawful rights of custody or visitation.