Massachusetts, like most states, treats medical malpractice different than most personal injury cases. The Legislature bought into the insurance industry’s false, but brilliantly executed, argument that medical malpractice litigation was responsible for driving doctors’ insurance rates sky high and for driving doctors out of the state. It is easy to be suspicious of the motives behind the statutory changes by taking a look at some of the main provisions of the Massachusetts medical malpractice “reform” legislation and examining its impact.
The law abolishes the collateral source rule, which mandates that an injured person’s recovery from the wrongdoer not be diminished because the victim received insurance, usually health insurance benefits, from a third party source. The defendant is barred from introducing evidence of the plaintiff’s recovery of benefits resulting from the injury, from any third party. The rule stems from the sound principle that the negligent party should not benefit from the foresight of the victim. In a medical malpractice action, however, if the plaintiff introduces evidence of medical bills, the defendant may show they were covered by insurance, and any judgment will be reduced by the amount of the insurance (the collateral source) paid. The impact has not been great, since plaintiff’s counsel can merely choose to introduce evidence only of future medical expenses and other losses and not bills paid by insurance.
The malpractice statute limits awards for pain and suffering and other non-economic damages, to $500,000, no matter how severe the injuries, unless the jury finds that the plaintiff suffered “a substantial or permanent loss or impairment of a bodily function or substantial disfigurement, or other special circumstances [such that] imposition of such a limitation would deprive the plaintiff of just compensation for the injuries sustained. Interestingly, this provision has had little impact. In cases of significant harm, most defense attorneys do not request this instruction to be given to the jury, fearing that the jury will then focus on the severity of the plaintiff’s loss and reason that if it is severe, $500,000 must be a floor amount of non-economic damages.
Which brings us to the real goal of the statute – limitations on attorneys fees. Instead of the customary 33 1/3% contingency that most lawyers charged (even 40% in some cases, given the complexity, expense, and risk of many malpractice cases), fees are limited to 40% of the first $150,000, 1/3 of the next $150,000, 30% of the next $200,000, and 25% of any recovery in excess of $500,000. This may seem like good news to the consumer. The main goal of the fee limitation though – and it has been highly successful – has been to make it less financially attractive for lawyers to accept malpractice cases resulting in serious but not permanent and severe injury. The risk is too great for the corresponding benefit. What looks like a benefit to citizens is really imposition of a barrier to the rights of many victims of medical malpractice. The easiest way to reduce the costs of medical malpractice cases would be for the malpractice insurers to settle valid cases early in the process, which would save many thousands of dollars of expenses. The insurers do the opposite, settling only when trial is near, thus making it too costly to bring many valid cases.
If there are any readers of this blog out there with views on the subject, I would be interested in your opinions on “medical malpractice reform.”