House Republican leaders continued to push a medical malpractice reform bill this week that caps non-economic damages at $250,000 and limits lawyer contingency fees, arguing that it would save taxpayers $41 billion and prevent defense spending cuts.
The House passed the HEALTH Act in March, even though President Barack Obama said he would veto it and House Democrats say it will be dead-on-arrival in the Senate. Now, House Judiciary Committee Chairman Rep. Lamar Smith (R-Texas) is proposing the bill as part of a way to cut the federal budget.
“America's broken medical liability system is a good place to start to reduce federal spending and to avoid cuts Secretary of Defense [Leon] Panetta has called putting a gun to the head of the country and weaken our defense system for the future,” Smith said during the hearing.
The HEALTH Act reforms include a $250,000 cap on noneconomic damages and limits on the contingency fees lawyers can charge, creates a “fair share rule” that allocates damages in direct proportion to fault and it provides guidelines on the award of punitive damages, Smith said.
Smith said the Congressional Budget Office estimates the bill will reduce mandatory federal spending by eliminating "defensive medicine," where doctors are forced to conduct medical tests simply to avoid a lawsuit. “This wasteful defensive medicine adds to all our health care costs without improving the quality of patient care,” Smith said.
The judiciary committee’s ranking member, Rep. John Conyers (D-Mich.), said that repackaging the bill will ultimately be futile and the committee should look for other ways to recommend budget cuts. Conyers also said the bill does too much for big business.
“The legislation is literally a financial wish list for the pharmaceutical companies and the insurance companies; and so, rather than helping the doctors and the patients, the measure before us today would guarantee a windfall for the health care businesses,” Conyers said.
The committee spent hours voting down proposed amendments from Democrats this week, but have not yet voted on recommending the bill for the spending cut proposals. The Budget Control Act, signed into law in August, requires automatic spending cuts – called sequestration – if other cuts are not found.