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.

Public Health and the Battle for Local Control

By Micah Berman

Last year -- over at Notice & Comment -- I blogged about two laws in Arizona that were taking seemed to be extreme forms of state-level preemption.  SB 1847 provided that if the state Attorney General concluded that a local government had passed a local law that was preempted by state law, the state could withhold all state funding from the locality.  Meanwhile, SB 1524 provided -- in incredibly broad and vague terms -- that a local government "may not take any action that materially increases the regulatory burdens on a business unless there is a threat to the health, safety and welfare of the public that has not been addressed by legislation or industry regulation within the proposed regulated field."

In a recent article in the Journal of Law, Medicine & Ethics, James Hodge and colleagues helpfully noted that these two laws are part of a broader trend they have labeled "Preemption Plus."  Hodge et al, explain:  

These schemes, including direct threats, fines, loss of funds, and deauthorizations, are gaining traction especially in public health arenas impacting big industries (e.g., tobacco, sugar sweetened beverages (SSBs)) or specific interests (e.g., rights to bear arms, religious freedoms). Collectively, they can essentially force states or localities to comply with higher level policies that are antithetical to the public’s health.

"Preemption plus" efforts noted by Hodge et al include a Florida law providing that local officials can be held personally liable for enforcing preempted gun control laws, and a proposed law in Virginia that would make "sanctuary cities" liable for crimes committed by undocumented immigrants.  Not included in their account was a law I recently heard about in Colorado, that withholds state cigarette tax funds from local governments that pass their own tobacco control regulations.

A July New York Times article notes many of these same efforts and dives deeper into the politics of preemption.  It notes:

In the last few years, Republican-controlled state legislatures have intensified the use of what are known as pre-emption laws, to block towns and cities from adopting measures favored by the left. The states aren’t merely overruling local laws; they’ve walled off whole new realms where local governments aren’t allowed to govern at all.

It notes that the industry-based American Legislative Exchange Council (ALEC) has been promoting model state laws pushing some of these "preemption plus" tactics.

Interestingly, the NY Times article mentions the late 19th-Century practice of "ripper bills" that took authority away from local governments and passed it to the states.  According to Richard Briffault, these laws were often passed by rural-dominated states legislatures that wanted to take power away from the cities.  These "ripper bills" were also frequently the product of corruption, designed to benefit special interests.

Outrage at "ripper bills" led to the rise of the modern "home rule" movement, prompting state constitutional reforms and other efforts aimed at protecting local control.  Will the rise of "preemption plus" tactics lead to a similar backlash?   A new organization, the Campaign to Defend Local Control, has formed to bring attention to this issue and to push back against preemptive laws.  Those interested in promoting public health should wish them well and get involved.