Bush May Seek Malpractice Lawsuit Curbs

President Bush, who is about to unveil his health care reform package, is considering urging states to severely restrict medical malpractice litigation through such controversial methods as imposing caps on court awards or limiting attorneys’ fees, sources said Monday.

Under the proposals, which will be unveiled by Bush in Cleveland on Thursday, states that failed to enact such restrictions could lose some federal Medicare and Medicaid funds, they said.

“All this is still being discussed, and nothing seems final, but it’s in the works,” said one source familiar with the proposals--which could be expected to face strong opposition from congressional Democrats as well as the nation’s trial lawyers.

While many details of Bush’s health care proposals are still being worked out, it is becoming clear that cutting federal payments for Medicare and Medicaid--particularly to providers--will be a major tool of the Administration in its drive to increase access to health insurance and to curb medical costs.

But such an approach also is likely to face stiff opposition from doctors, hospitals and state governments, which say that they already are being inadequately reimbursed for treating the elderly and the poor.

Some of the emerging White House medical malpractice proposals appear to be recycled from a Bush plan that languished in Congress last year, while others are still being thrashed out, partly in deference to Senate Republicans who have developed their own malpractice reform proposals.

In his 1991 proposal, for instance, the President urged states to impose a $250,000 cap on non-economic damage awards, such as for pain and suffering; Senate Republicans would like to see a more generous cap of $350,000.

The higher figure is part of a health care reform package introduced last November by Sen. John H. Chafee (R-R. I.) that had more than 20 GOP co-sponsors. That plan would also limit attorneys’ fees to 25% of the first $150,000 of a jury award or out-of-court settlement and 15% of amounts exceeding $150,000.

The Administration plan, as it now stands, would not urge states to set ceilings on malpractice awards for actual medical expenses or loss of future earnings, sources said. California law already provides for such limits. A law passed in 1975 confines medical malpractice awards to actual damages, plus a cap of $250,000 for pain and suffering.

The Bush Administration has long blamed defensive medicine--in which physicians order excessive tests to shield themselves against possible malpractice lawsuits--as a major factor in runaway health care costs.

In a related development, Vice President Dan Quayle, is to unveil later today the Administration’s proposals to reform the civil justice system, particularly in the area of product liability. However, he is expected to defer to the President on the issue of medical malpractice reform, a Quayle spokesman said Monday.

With more than 35 million Americans uninsured and total medical spending accounting for more than 12% of the gross national product, changing the health care system has become a volatile political issue in this presidential election year. More than three dozen proposals already have been introduced in Congress.

On medical malpractice, the Administration is also likely to encourage states to:

* Set up alternative dispute resolution mechanisms such as arbitration and mediation.

* Allow medical defendants to pay awards gradually rather than in a lump sum.

* Establish “joint-and-several-liability” rules so that each defendant is only liable for the amount of non-economic damages proportional to its percentage of responsibility.

Times staff writers Art Pine in Washington and Philip Hager in San Francisco contributed to this story.