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Not Your Grandfather's Preemption: Proposed Federal Preemption of State Medical Malpractice Cases

By Wendy E. Parmet and Elisabeth J. Ryan

During this past spring and summer’s debates over Republican efforts to repeal and replace the Affordable Care Act, GOP leaders insisted that states should be given greater flexibility over health care.  Their support for states’ rights relating to health care, however, seems to be fickle. In June, the same House of Representatives that supported the American Health Care Act, which would have allowed states to get rid of essential benefits, passed on a close vote of 218-210 H.R. 1215, “Protecting Access to Care Act of 2017.” This bill would preempt numerous aspects of state substantive, procedural, and evidentiary law in any “health care lawsuit…for which coverage was provided in whole or in part via a Federal program, subsidy, or tax benefit.”  In other words, the bill would apply to any lawsuit relating to healthcare that was paid for not only by Medicare, Medicaid, or the Veterans Administration, but also by any insurance plan purchased on an Affordable Care Act exchange for which the consumer received a tax credit or subsidy.  It may also apply to lawsuits relating to care paid for by any insurance plan – including any employer-sponsored plan – that receives any tax credits from the federal government. However, the full scope of the language is unclear because it was rushed through the House and subject to just one hour of general debate

Federal preemption of state health care laws is not new, as anyone who has heard of ERISA knows. Nor is GOP support for so-called malpractice reform. Republicans have long advocated for stringent tort reform bills, touting them as ways to lower health care costs, reduce liability insurance premiums, and discourage “frivolous” lawsuits.  In response, many states have adopted a wide variety of tort reform measures.

What is striking about HR 1215, beyond the inconstant commitment to states’ rights, is that this bill preempts the procedural and evidentiary rules that would apply in state court. In other words, unlike ERISA or parts of the Food, Drug and Cosmetic Act which preempt state causes of action, HR 1215 would leave tort law claims to be adjudicated in state court, according to state substantive law, but subject to federal caps and federal evidentiary and procedural laws. As one of us argued in another context, the constitutionality of this kind of federalization of state court procedures is highly questionable.

Yet, subject to certain limitations, and provisions that would allow states to impose even more stringent restrictions, HR 1215 would preempt or modify a wide range of procedures and evidentiary rules applicable in state court actions. Among other things, it would:

 - Impose a statute of limitations of 1 year from a patient’s discovery (or the time a patient “should have” discovered) of the injury;

 - Limit non-economic damages (including “physical and emotional pain, suffering… [and] disfigurement”) to $250,000 (Research has shown that patient care falls in states with similar caps.);

 - Eliminate joint and several liability, with each defendant only responsible for its own share of damages;

 - Specify the amount that attorneys may collect in contingency fees and allow a judge to restrict that amount even further, regardless of whether the judgement was via verdict, settlement, or any other kind of alternative dispute resolution;

 - Mandate that damages be paid in installments, prohibiting lump sum payments;

 - Forbid experts from testifying to the standard of acceptable practice in a defendant’s specialty and whether that defendant met that standard unless the expert was licensed to practice that specialty in the state at issue in the one year prior to the incident;

 - Make inadmissible any provider’s expressions of “apology…or a general sense of benevolence” to a patient;

 - Require the plaintiff to file a detailed “affidavit of merit” by a health professional, simultaneous with the filing of a complaint;

 - Require a plaintiff to give a potential defendant 90 days written notice before filing a   complaint.

In the past, Republican tort reform efforts died in the Senate due to the filibuster. For the moment, the filibuster remains, so HR 1215’s enactment seems unlikely. However, given the President’s repeated calls for ending the filibuster, and the uncertain fate of health reform, nothing can be taken for granted. For this reason, HR 1215 merits serious review, both for its impact on patient rights and for its proposed federalization of state court procedures.