Beyond MICRA: New Ideas for Liability Reform

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Abstract
The existing medical liability system does not work. It does not deter negligence, provide timely compensation to injured persons, or resolve disputes fairly. Studies show that a large percentage of injured patients are not compensated and that physicians feel vulnerable to a lawsuit whether or not they practice high-quality medicine. The arbitrariness and inefficiency of the system disrupts the physician-patient relationship, increases health care costs, and, in some cases, hurts access to care. As a result, comprehensive changes to the liability system must be made. The American College of Physicians makes the following recommendations. 1. Congress should immediately pass the tort reforms contained in the California Medical Injury Compensation Reform Act (MICRA), particularly caps on noneconomic damages, as necessary short-term changes to a flawed system. 2. Federal legislation should be enacted that overturns recent court decisions that have relied on the Employee Retirement Income Security Act of 1974, a federal law that regulates pensions and other benefit plans, to bar plaintiffs from suing their health plan for negligence if the plan's benefits or treatment decisions lead to an injury. 3. Demonstration projects should be created and funded to examine the feasibility of using a set of caps for noneconomic damage awards that are based on the severity of injury suffered and the injured party's age. A set of caps could be seen as fairer to injured persons than flat caps but would still protect physicians from unlimited awards. 4. Demonstration projects should be authorized and funded to test enterprise liability and no-fault systems. These systems could take many forms, including administrative approaches; lists of accelerated compensation events; "early offer of settlement" approaches; and organizational liability for health plans, hospitals, or health systems. Such long-term reforms are consistent with trends in health care delivery and are necessary to promote quality of care, compensate injured persons, and protect physicians.

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