AAI Praises Nev. Gov.’s Attempt to Resolve State’s Med Mal Crisis

July 31, 2002

Nevada Gov. Kenny Guinn presented a special session of the state Senate with his proposals to cure the state’s medical malpractice crisis. The governor called for the special session to pass legislation that will restore affordability and availability to the medical malpractice insurance market and stem the exodus of the state’s trauma and maternity care doctors.

The reforms are contained in SB 2 and call for a $350,000 cap on non-economic damages except in cases of gross negligence. Health care provider liability would be limited to their share of the conduct in awards. Trauma care doctors would have medical malpractice liability capped at $50,000. Periodic payment of awards also would be allowed.

“Liability caps are essential if Nevada is going to stabilize the losses and restore predictability to the market,” Peter Gorman, vice president of the Alliance of American Insurers’ Western Region. “Runaway jury awards have severely damaged the market and the state’s health care system. In 2001, awards totaled $22 million, an increase of $17 million over the prior year.”

The governor’s bill also contains other reforms to the judicial system. They include:

• Reducing the statute of limitations from four to three years from date of injury;
• Replacing the state’s current ineffective medical screening panels with “fast track” medical malpractice courts, using well-trained judges that have the authority to expedite discovery and order arbitration and settlement;
• Requiring plaintiffs attorneys filing frivolous lawsuits to pay all court costs;
• Establishing a state case tracking system that would require insurers to file data within 30 days.

In response to several senators questions as to why tougher sanctions against insurers weren’t included in the reform package, the governor explained that the state had recently become an “insurer of last resort” through a joint underwriting association, and that he wanted to restore the private market and exit that business.

“Gov. Guinn asked the legislature to pass his reforms to accomplish this goal,” Gorman said. “This took courage and understanding of the state’s complex marketplace dynamics. The plaintiffs attorneys have been blaming insurers publicly so they can continue to reap the rewards of a dysfunctional system.”

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