Mr. Chairman, the rising cost of malpractice insurance is a real problem for doctors and patients. The substitute before us would provide direct, targeted aide to physicians and communities to assist with the current crisis. It would also institute common sense tort reforms to weed out frivolous lawsuits and stabilize our court system while protecting the rights of patients. Lastly, this amendment would create an independent commission to examine every aspect of the current insurance crisis, propose additional solutions, and make recommendations to avoid any future malpractice insurance crisis.

The scope of liability reforms in the substitute amendment are limited to hospitals, physicians, nurses and other health professionals who pay malpractice insurance premiums. Unlike H.R. 5, it does not protect HMO’s, insurance companies and drug and device manufacturers.

The amendment establishes an equitable statute of limitations that begins three years from the date an injury is discovered or reasonably should have been discovered. For children who discover their injury while under the age of 18, they have three years after turning 18 to do so.

As officers of the court, attorneys have an obligation to keep frivolous law suits from clogging the system. This amendment expands that obligation by requiring attorneys certify that their cases have merit each time they file a medical malpractice action. If an attorney files a false certificate, the attorney will be subject to strict penalties by the courts. Unlike H.R. 5, this provision directly addresses the problem of frivolous law suits.

The substitute amendment also limits the circumstances under which punitive damages can be awarded to the most egregious of circumstances – gross negligence, reckless indifference to life, or intentional acts such as intoxication or sexual abuse. If punitive damages are awarded, half of the proceeds will be directed into a fund to reduce medical errors and improve patient safety.

Where H.R. 5 does not provide any direct assistance to health care providers, the substitute amendment includes three provisions that are designed to do just that: help providers with their malpractice insurance costs. The first provision requires malpractice insurance companies to pass along at least half of any savings achieved from this legislation to physicians on an annual basis. The second provision provides grants and contracts administered through HHS to assist geographical regions of the country that are experiencing a shortage of physicians due to increased malpractice insurance costs. The third provision allows HHS to send physicians from the National Health Service Corps to trauma centers that are about to close because of increased malpractice insurance costs.

These provisions will provide targeted short-term assistance to physicians while the Independent Advisory Commission analyses the causes and scope of the current spikes in malpractice insurance rates, proposes additional short-term solutions, and recommends policies that will prevent these dramatic increases from occurring in the future.