California Healthline Rounds Up Federal Legislative Agenda for 2005
President Bush this week will renew his push for "revisions in medical liability law" in a speech Wednesday in Collinsville, Ill., the AP/Boston Herald reports (AP/Boston Herald, 12/31/04). Bush has said he will make tort reform a priority in his second term in an effort to spur the U.S. economy, which the Chamber of Commerce says loses $230 billion annually from the defense and payment of liability claims. According to the Chicago Tribune, Bush is making Collinsville the "first public spotlight" in his campaign because the town is "infamous for its volume of lawsuits."
The campaign includes three primary reforms: capping noneconomic damages in medical malpractice cases, possibly at $250,000; restricting the scope of class-action lawsuits; and limiting lawsuits against makers and sellers of asbestos-filled products (Silva, Chicago Tribune, 1/3). Senate Majority Leader Bill Frist (R-Tenn.) said he hopes Congress can make progress on such legislation in 2005. Congressional Republicans have advocated measures that would limit noneconomic damages to $250,000 and limit attorney's fees but still allow patients to "unlimited compensation to pay for their medical costs and economic damages," according to the Baltimore Sun.
Opponents of such legislation -- including trial lawyers, consumers' groups and many Democrats -- have said limiting damages deprives some injured patients of their right to compensation and would "subsidiz[e] the insurance industry," according to Carlton Carl, spokesperson for the Association of Trial Lawyers of America. ATLA backs legislation aimed at reducing the growth of malpractice insurance premiums, which also would force insurers to disclose when premiums rise and offer medical liability coverage in areas in which they offer other types of policies. Senate Minority Leader Harry Reid (D-Nev.) has expressed support for a measure authored by Sen. Richard Durbin (D-Ill.) that would give physicians a tax credit for high liability premiums (Hirschfeld Davis, Baltimore Sun, 12/25/04).
The Chamber of Commerce and AMA spent a combined $39 million during the first half of 2004 lobbying on behalf of medical liability limits, according to politicalmoneyline.com, the Los Angeles Times reports. The organizations "top[ped] the list of spenders" among special interests, which spent $1.1 billion on lobbying efforts in the first six months of 2004, according to the Times. The Chamber of Commerce spent millions of dollars in 2004 on the November Fund, a group formed to "attack Democratic vice presidential nominee Sen. John Edwards of North Carolina for his work as a trial lawyer," the Times reports.
An unnamed AMA spokesperson would not say how the group spent the money, only that medical liability issues and Medicare reimbursements were important issues. Stephen Moore, president of the Club for Growth -- an organization that advocates tax cuts and limited government -- said, "A lot of business groups have been waiting for years, if not decades, for all the political stars to be aligned so they could get legislation passed on issues like medical malpractice," adding, "The overall issue of lawsuit abuses and bringing a stop to them will mean that the lobbying frenzy will be even more intense in 2005" (Wallsten, Los Angeles Times, 12/29/04).
Bush -- faced with "record deficits" and unlikely to revoke his tax cuts -- has pledged to "cu[t] the deficit in half over five years," and "Medicare and Medicaid are prominent" on his "likely hit list," the Los Angeles Times reports. John Nelson, president of the American Medical Association, said, "The appearance is that the government is trying to solve Medicare's financial problems on the backs of the nation's doctors." Nelson said AMA has met with members of Congress and CMS Administrator Mark McClellan to discuss the group's concerns.
As of Jan. 1, 2006, physicians who treat Medicare patients will absorb a 5% reduction in their government reimbursement, and the doctors "barely headed off" cuts of 4.5% scheduled for 2004 and 2005 when Congress revised the new prescription drug bill to include a 1.5% increase instead, according to the Times. Medicare and Medicaid advocates have said that budget cuts harm the general public, not just the recipients of federal aid. Some members of Congress have said that Bush will likely try to cut state Medicaid funding while allowing greater spending flexibility, a proposal blocked last year by the Senate (Havemann, Los Angeles Times, 12/26/04).
Rep. Michael Oxley (R-Ohio) will likely introduce legislation at the beginning of 2005 that would set federal standards for the insurance industry, including market conduct, rates, forms and licensing -- which would mark the industry's first federal oversight since the 1940s, the Los Angeles Times reports. The proposal, currently a 300-page draft called the State Modernization and Regulatory Transparency act, would create national standards "on a host of fronts" in an industry that currently is only regulated at the state level, according to the Times.
Insurance groups, which have traditionally opposed regulation, said they support Oxley's bill. Joseph Annotti, vice president of the Property Casualty Insurance Association of America, said, "Five years ago, our members would have said 'no' to any federal involvement whatsoever. But increasing frustration with disjointed state regulation is beginning to turn the question from being 'state versus federal' to being 'good regulation versus bad regulation.'"
Consumer advocates have said the draft is a "ruse" that is "designed to weaken state regulation, not strengthen it," according to the Times. Doug Heller, executive director of the Foundation for Taxpayer and Consumer Rights, said the insurance industry is "threatening a federal takeover in order to scare our state lawmakers into weakening state consumer protections" (Kristof, Los Angeles Times, 12/25/04).
Instead of returning to their homes, several departing members of the 108th Congress are trading "their years of service for big paychecks from lobbying groups, investment banks and law firms," the San Jose Mercury News reports.
Rep. Billy Tauzin (R-La.), who helped write the new Medicare prescription drug law, will become president of the Pharmaceutical Research and Manufacturers of America for a salary that is said to be about $2 million. Rep. Jack Quinn (R-N.Y.) will join a top lobbying firm, and Rep. Dick Gephardt (D-Mo.) and Sen. Tom Daschle (D-S.D.) are reportedly considering "lucrative" positions in the lobbying arena (Stearns, San Jose Mercury News, 12/26/04).