You asked for information on (1) Connecticut's medical malpractice insurance legislation passed over the past few years, (2) proposals that the legislature did not adopt, and (3) imposing caps on noneconomic damages.

SUMMARY

The legislature passed and the governor signed into law the following public acts regarding medical malpractice insurance over the last three years:

• PA 04-221 exempts doctors from carrying medical malpractice insurance when they work without compensation in free clinics and meet other conditions.

• PA 04-1, May Special Session, requires the Connecticut Health and Educational Facilities Authority (CHEFA) to establish a three-year demonstration program to provide grants to nonprofit hospitals that establish captive insurers, or expand coverage offered by existing captive insurers, to provide medical malpractice insurance coverage to physicians and surgeons who have hospital privileges at the hospitals.

• PA 05-275 makes numerous changes in the laws dealing with civil litigation, primarily relating to medical malpractice; medical malpractice insurance regulation and oversight; and the regulation, oversight, and disciplining of doctors.

• PA 05-103 requires that under certain circumstances, professional liability insurance policies issued on a claims-made basis provide coverage for prior acts and unlimited extended reporting period coverage without additional charge to physicians, surgeons, advanced practice registered nurses, physician assistants, and hospitals.

• PA 06-108 limits the circumstances under which insurers must provide professional liability insurance coverage for prior acts and unlimited extended reporting period coverage without additional charge.

• PA 06-195 requires dentists and licensed physical therapists that provide direct patient care to carry malpractice insurance.

The legislature passed PA 04-155 but the governor vetoed it. The act changes laws dealing with medical malpractice and gives certain physicians a tax credit for a portion of their medical malpractice insurance premiums.

Legislators also proposed numerous other bills regarding medical malpractice insurance during 2004 and 2005 that were not enacted, including bills establishing a premium relief fund and a reinsurance fund, bifurcating medical malpractice actions, creating a no-fault medical malpractice compensation system, providing premium relief for certain obstetricians and gynecologists, and setting caps on the noneconomic damages available in medical malpractice actions.

There are three main categories of damages that may be awarded in medical malpractice cases: economic (e. g. , loss of wages, medical care), noneconomic (e. g. , pain and suffering), and punitive. Twenty-six states have laws specifically capping medical malpractice noneconomic damage awards: Alaska, California, Colorado, Florida, Georgia, Hawaii, Idaho, Illinois, Kansas, Maine, Maryland, Massachusetts, Michigan, Mississippi, Missouri, Montana, Nevada, North Dakota, Ohio, Oklahoma, South

Carolina, South Dakota, Texas, Utah, West Virginia, and Wisconsin. Four states have laws limiting the total amount of damages recoverable without placing a specific cap on noneconomic damages: Indiana, Louisiana, Nebraska, and Virginia. New Mexico law limits the total amount of damages except those for punitive and medical care.

CONNECTICUT MEDICAL MALPRACTICE LEGISLATION

PA 04-221, § 30

By law, physicians must carry medical malpractice insurance of $ 500,000 per person, per occurrence with an aggregate of $ 1. 5 million. Section 30 of PA 04-221 exempts physicians from this requirement when, for no compensation, they are providing primary health care services at a Department of Public Health (DPH)-licensed, tax-exempt clinic that (1) does not charge for its services, (2) maintains the $ 500,000/$ 1. 5 million malpractice coverage required by law for each 40 hours (or fractional amount) of service these physicians provide, (3) carries additional malpractice coverage in these amounts on behalf of itself and its employees, and (4) maintains total malpractice coverage for $ 1. 5 million per occurrence and $ 3 million in total. A physician covered by the act's exemption must still maintain legally required malpractice coverage when providing services in any other situation. The act states that it does not relieve such clinics from any other insurance the law requires them to maintain.

Under the act, a doctor who permanently retires from practice having maintained the malpractice coverage required by law and then provides free services at a tax-exempt clinic does not lose the right to unlimited additional extended reporting period coverage (that is, coverage for a claim made after the year in which the action underlying the claim occurred).

PA 04-1, May Sp. Sess. , § 22

This act requires CHEFA to establish a three-year demonstration program to provide grants to nonprofit hospitals that establish captive insurers, or expand coverage offered by existing captive insurers, to provide medical malpractice insurance coverage to physicians and surgeons who have hospital privileges at the hospitals. (A “captive insurer” is an insurance company that its owner forms to ensure the owner's own risk. ) CHEFA must use $ 1. 5 million from its reserves to establish a fund to pay for the grants. The fund may also cover legal, actuarial, consulting, and other insurance or indemnity-related costs.

Grants are limited to $ 750,000 per captive insurer and to establishing or expanding up to two such entities. Grants must be awarded based on each hospital's size and financial resources. Hospitals receiving grants must agree to give CHEFA, at least annually, information on its captive insurer's performance, including premiums charged, operating costs, claims experience, estimated savings compared to the hospital's earlier insurance methods, and any other information CHEFA requires.

CHEFA must submit annual reports in each program year that include analyses of the hospitals' information. Any money left in the program fund at the end of the program reverts to CHEFA's reserves.

PA 05-275

This act makes numerous changes in the laws dealing with civil litigation, primarily relating to medical malpractice; medical malpractice insurance regulation and oversight; and the regulation, oversight, and disciplining of doctors.

Litigation Reform. The act:

1. permits a plaintiff to pay more than the statutory contingency fee sliding scale allows under certain circumstances, but prohibits a fee exceeding one-third of the settlement or the damages awarded (§ 1);

2. requires, as a condition of filing a medical malpractice lawsuit, a signed opinion from a similar health care provider indicating that malpractice has occurred (§ 2);

3. requires the court, within six months after a medical malpractice case is filed, to schedule a conference to determine whether to recommend the case be designated as a complex litigation case and transferred to the complex litigation docket (§ 3);

4. changes the “offer of judgment” law in several ways including changing the terminology to “offer of compromise” and ending the process in a withdrawal of the lawsuit after payment instead of a judgment against the defendant (§§ 4-7);

5. reduces the interest rate the court may award with respect to an offer of compromise for cases that accrue after September 30, 2005, from 12% to 8%, and establishes some additional requirements for such cases (§ 4);

6. allows defendants in medical malpractice cases that accrue after September 30, 2005, to introduce evidence of the amount of damages awarded to the plaintiff for the same injury or death in a separate lawsuit by the plaintiff against a different health care provider (§ 8);

7. makes expressions of sympathy by health care providers inadmissible in lawsuits by victims of unanticipated outcomes of medical care (§ 9);

8. requires the court to review the evidence in medical malpractice cases where $ 1 million or more in noneconomic damages is awarded to determine if the award is excessive as a matter of law (§ 10); and

9. eliminates the medical malpractice screening panel (§ 28).

Insurance Regulation and Oversight. The act:

1. requires prior rate approval when an insurer wants to increase medical malpractice insurance rates by 7. 5% or more for physicians, hospitals, and certain other health care providers and requires an insurer to give insureds at least 60 days notice of the proposed rate increase and their right to request a hearing before the insurance commissioner (§ 11);

2. requires the insurance commissioner, no earlier than October 1, 2008, to review medical malpractice insurance rates to determine if (1) the amount or frequency of insured awards and settlements against these providers has decreased since October 1, 2005; (2) the rates reflect the decrease; and (3) the rates bear a reasonable relationship to the costs of writing such insurance in this state and requires her to convene a working group to recommend appropriate changes to decrease or establish reasonable rates if after review she determines that rates have not decreased and are not reasonably related to the costs of writing such insurance (§12);

3. requires the insurance commissioner to develop a plan to maintain a viable medical malpractice insurance industry in Connecticut and submit it to the governor (§ 13);

4. requires insurers to report to the insurance commissioner on each malpractice claim they close and requires her to compile and analyze this data and report on it to the Insurance and Real Estate Committee and the public (§ 14); and

5. requires captive insurers to provide certain information to the insurance commissioner (§§ 15 & 16).

Medical Provider Regulation and Oversight. The act:

1. requires DPH to adopt guidelines for investigating complaints against, and disciplining, physicians (§§ 17 & 20);

2. expands the pool of people who may serve as members of DPH hearing panels from 18 to 24, specifies that at least eight, instead of eight, must be physicians, and at least one, instead of one, must be a physician assistant, and requires that one member must be a physician or a physician assistant, as appropriate (§§ 18 & 19);

3. amends the physician profile law to require more information about adverse licensure actions in other states, professional liability insurance, and active involvement in patient care and requires physicians to report any changes or updates in mandatory reporting information (§§ 22 & 23);

4. establishes continuing education requirements for physicians as a condition of license renewal, along with exemptions from these requirements under certain conditions (§§ 21, 24, and 25);

5. requires a physician whose license becomes void for failure to renew while on active duty in the armed forces to complete continuing education requirements in order to have his license renewed (§ 25);

6. requires each health care facility to develop pre-surgery identification protocols by October 1, 2005 and the DPH commissioner to report on them to the Public Health Committee by that date (§ 26); and

7. requires each hospital to contract with a patient safety organization to gather medical- or health care-related data and make recommendations to the hospital on ways to improve patient care and safety (§ 27).

PA 05-103

This act requires insurers to provide, at no additional cost, prior acts coverage and unlimited extended reporting period coverage if (1) the insurer stopped offering the policy in Connecticut for any reason and the insured was over age 55 and had been insured by the insurer for the seven consecutive years immediately preceding the discontinuance or (2) the insured died, became permanently disabled and unable to carry out his practice, or retired permanently from practice.

A claims-made policy covers a claim filed during the policy period as long as the incident on which the claim is based occurred after the retroactive coverage date specified in the policy. If no retroactive date is identified, the policy covers injury or damage occurring prior to the policy effective date. Prior acts coverage insures against claims arising from acts that occurred before the beginning of a claims-made policy's coverage period. Extended reporting period coverage allows the insured to file claims after the claims-made policy otherwise terminates.

The act makes coverage for prior acts and unlimited extended reporting period coverage enforceable against an insurer that stops offering such policies in Connecticut for any reason before the insured's death, disability, or retirement, if the insured is covered under the policy on the date the insurer stops offering the policy. The act requires the insurer to provide such coverage upon death, disability, or retirement in the same manner as if the insurer continued offering it in Connecticut.

PA 06-108 (Effective October 1, 2006)

This act removes the requirement imposed by PA 05-103 that professional liability insurance policies issued on a claims-made basis provide prior acts coverage without additional charge to insureds under certain circumstances.

It also changes the circumstances under which professional liability insurance policies issued on a claims-made basis must provide extended reporting period coverage at no additional charge, which was imposed by PA 05-103. It must provide such coverage if, while an insured is covered under the policy, (1) the insurer stops offering policies in Connecticut because of a voluntary withdrawal from the state and (2) the insured is over age 60 or has been insured by the insurer for the five consecutive years immediately preceding the discontinuance. It requires the insurer to provide such coverage with equivalent terms and conditions and with an aggregate liability limit at least equal to the one specified in the policy.

PA 06-195, §§ 20, 83, & 85 (Effective October 1, 2006)

Dentists. Section 20 of PA 06-195 requires dentists who provide direct patient care services to maintain professional liability insurance or other indemnity against liability for professional malpractice. The amount each dentist must carry against claims for injury or death for malpractice must be at least $ 500,000 for one person, per occurrence, with an aggregate of at least $ 1. 5 million.

Beginning January 1, 2007, each insurance company issuing professional liability insurance must provide DPH with a true record of the names and addresses, by classification, of cancellations of, and refusals to renew, professional liability insurance policies, including the reasons for cancellation or refusal, for the year ending on the preceding December 31.

Under the act, a dentist who must carry malpractice insurance is deemed in compliance when providing dental services at a DPH-licensed, tax exempt clinic (under § 501(c)(3) of the IRS Code) if the dentist is not compensated and the clinic:

1. does not charge patients for services,

2. maintains professional liability insurance coverage in the required amounts for each aggregated 40 hours or fraction of for the dentists,

3. carries additional appropriate professional liability coverage for itself and its employees of $ 500,000 per occurrence with an aggregate of not less than $ 1. 5 million, and

4. maintains total professional liability coverage of at least $ 1 million per occurrence with an annual aggregate of at least $ 3 million.

But, a dentist is subject to the insurance requirements when providing direct patient care services in any setting other than the clinic. The act specifies that it does not relieve the clinic from any other insurance requirements.

Under the act, a person insured with a claims-made medical malpractice insurance policy does not lose the right to unlimited additional extended reporting period coverage when he permanently retires from practice if he solely provides professional services without charge at a tax-exempt clinic.

Physical Therapists. Sections 83 and 85 of the act requires licensed physical therapists who provide direct patient care to carry malpractice insurance of at least $ 500,000 per person, per occurrence, with an aggregate of at least $ 1. 5 million. It requires malpractice insurers,

beginning January 1, 2007, to notify DPH annually of the names and addresses of physical therapists whose policies it cancelled or refused to renew in the previous calendar year and the reasons why.

PROPOSED BILLS NOT SIGNED INTO LAW

2004 Session

PA 04-155 (Vetoed). This act is similar to PA 05-275 in that it makes numerous changes to the laws dealing with civil litigation, primarily relating to medical malpractice; medical malpractice insurance regulation and oversight; and the regulation, oversight, and disciplining of doctors. One significant difference is PA 04-155 gives certain physicians a tax credit for a portion of their medical malpractice insurance premiums. The governor vetoed this act.

Bills Favorably Reported by Committees. Table 1 identifies bills related to medical malpractice that committees reported favorably in 2004 but which the legislature did not enact. None of these bills include a limitation on noneconomic damages.

Table 1: 2004 Medical Malpractice Bills

Reported by Committees

Five of these bills are very similar (sHB 60, SB 141, sSB 356, sSB 394, and sHB 5669). Each one makes numerous changes to the law dealing with civil litigation; insurance regulation and oversight; and the regulation, oversight, and disciplining of doctors. Substitute HB 5669

has a unique provision that establishes a patient safety ombudsman within the Department of Public Health to improve patient safety and reduce medical errors.

The provisions dealing with civil litigation for the most part deal with similar areas. Some of these bills require those who file malpractice cases to first submit their claim to a medical malpractice screening panel before they can pursue their case in court (sSB 60, sSB 356, and sSB 394). Two of the bills eliminate the screening panel and instead require that a claim be submitted to mediation before proceeding through the litigation process (SB 141 and sHB 5669).

Three of the bills expand the malpractice screening panel from three to four members by adding a judge trial referee (sSB 60, sSB 356, and sSB 394). Two of these bills retain the requirement that the panel's conclusions are admissible in a medical malpractice lawsuit only if the findings are unanimous (sSB 60 and sSB 394). Substitute SB 356 retains the three-member panel and permits admissibility of findings by a majority of the panel members.

Each bill reduces the amount of interest the defendant must pay under the offer of judgment law. But they do so in different ways. Each bill also addresses the contingency fee that attorneys may charge. One mandates that the current contingency fee schedule must be complied with and outlaws waivers (SB 141). Four bills allow waivers only with court approval (sSB 60, sSB 356, sSB 394, and sHB 5669).

One bill establishes a task force to examine the feasibility of developing alternatives to the current litigation system for medical malpractice cases (SB 141).

One bill establishes two funds to deal with malpractice issues. One fund (called a Healthy Connecticut Fund) reimburses any parties of a medical malpractice settlement or judgment that represents the deductible portion of the defendant's malpractice insurance policy. The other fund pays 50% of the portion of each malpractice settlement or judgment of between (1) $ 750,000 and $ 1,750,000 for each individual provider and (2) $ 1,500,000 and $ 2,500,000 for a hospital (sSB 61).

Substitute SB 61 also allows health care providers to deduct from their Connecticut adjusted gross income for state income tax purposes any amount they paid for premiums on a medical malpractice insurance policy.

Substitute SB 394 contains a fund to pay deductibles on malpractice insurance policies.

Substitute HB 5669 allows doctors to deduct any amount paid for malpractice insurance from their Connecticut adjusted gross income. It also provides money for a loan-forgiving program for people to complete medical training in obstetrics or neurosurgery at a medical school in Connecticut.

Bills Proposed but Not Reported. Table 2 identifies bills committees proposed in 2004, but did not report, relating to medical malpractice. Two of the six bills imposed caps on noneconomic damages (SB 483, HB 5043). The bills reported out of committees addressed the majority of topics included in these proposed but not reported bills.

Table 2: 2004 Medical Malpractice Bills

Proposed but Not Reported

*Judiciary amended HB 5043 and favorably reported sHB 5043, An Act Increasing the Penalties for Enticing a Minor and Importing or Possessing Child Pornography. All references to medical malpractice were removed.

In many respects, SB 483 is similar to SB 394, which was reported out of committee. The major difference is SB 483 includes caps on noneconomic damages awarded for professional negligence of a licensed health care provider in the medical diagnosis, care or treatment of the claimant. The bill caps the amount of recoverable noneconomic damages allowed at $ 250,000 for each claimant in the case of physicians, health care providers, or health care institution. In the case of an action brought against more than one health care institution, the bill caps the amount of recoverable noneconomic damages for all health care institutions at $ 500,000 for each claimant.

The governor's budget bill, HB 5043, contained a $ 250,000 cap on noneconomic damages. The Judiciary Committee reported out sHB 5043, which became Public Act 04-139, without the damage cap provision.

2005 Session

Bills Favorably Reported by Committees. Table 3 identifies bills related to medical malpractice that committees reported favorably in 2005 but which the legislature did not enact.

Table 3: 2005 Medical Malpractice Bills

Reported by Committees

sHB 6624. This bill establishes an ad hoc committee to assist the DPH commissioner in evaluating the feasibility of developing and implementing written evidence-based standards of practice for physicians that would be used in DPH's review of complaints received against a physician.

sHB 6714. This bill amends the physician profile law to require more information about adverse licensure actions in other states, professional liability insurance, and active involvement in patient care. It also requires physicians to report any changes or updates in mandatory reporting information. The bill establishes continuing education requirements for physicians as a condition of license renewal and exemptions under certain conditions. It also requires a physician whose license becomes void for failure to renew while on active duty in the armed forces to complete continuing education requirements in order to have his license renewed.

sSB 131. This bill makes numerous changes in the laws dealing with medical malpractice litigation; medical malpractice insurance regulation and oversight; and the regulation, oversight, and disciplining of doctors. It establishes a mandatory mediation program; requires, as a condition of filing a medical malpractice lawsuit, a signed opinion of a similar health care provider indicating that malpractice has occurred; reduces the interest rate the court may award the plaintiff on an offer of judgment; allows attorneys to charge more than the law normally allows only with court approval; and prohibits fees greater than one-third of the damages awarded.

It also (1) requires the court to review the evidence in medical malpractice cases that award $ 1 million or more in noneconomic damages to determine if the award is excessive as a matter of law; (2) gives plaintiffs 60 days instead of 10 to accept a defendant's offer of judgment and allows courts to give plaintiffs and defendants up to an additional 120 days to accept an offer of judgment; and (3) eliminates the Medical Malpractice Screening Panel.

sSB 1296. This bill requires the insurance commissioner, in consultation with the public health commissioner, to study the feasibility of creating a Medical Malpractice Premium Relief Fund to help obstetricians and gynecologists pay for their medical malpractice insurance if (1) they practice in association with a research department of a Connecticut university and (2) at least 25% of the patients they or the university serves on an annual basis are Medicaid recipients. The study must include the amount of premium assistance, eligibility requirements, and funding sources.

Bills Proposed but Not Reported. Table 4 identifies bills committees proposed in 2005, but did not report, relating to medical malpractice.

Table 4: 2005 Medical Malpractice Bills

Proposed but Not Reported

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*Judiciary amended SB 1192 and favorably reported sSB 1192, An Act Concerning Public Agency Termination, Separation and Suspension Agreements. All references to medical malpractice were removed.

The bills listed in Table 4 cover a wide variety of topics, including good faith certificates, offers of judgment, attorney contingency fees, medical malpractice trial procedures, and pretrial review of cases. Many of the bills establish a cap on noneconomic damages of $ 250,000, $ 350,000, or $ 500,000.

HB 5797 and SB 682 establish a medical malpractice compensation system similar to the workers' compensation program under Connecticut law.

SB 515 permits either party in a medical malpractice action to request that the court bifurcate the trial. If granted, the court must first conduct a proceeding limited to the issue of negligence. If negligence is found, the court must conduct a second proceeding limited to the issue of damages.

SB 767 requires premiums paid for medical malpractice insurance to be deductible from state taxes. SB 1252 establishes a medical malpractice reinsurance fund to pay medical malpractice awards in excess of $ 1 million.

STATUTORY CAPS ON DAMAGES

Table 5 identifies the damage award limitations imposed by law in the various states.

Table 5: Statutory Limits on Damage Awards by State

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Sources: National Conference of State Legislatures (October 21, 2005) and OLR research

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