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Assembly poised to approve liability bill

THE BALTIMORE SUN

The Maryland House and Senate were preparing to pass a bill early this morning to keep malpractice insurance costs for doctors in check, defying Gov. Robert L. Ehrlich Jr.'s pledge to veto the complex agreement.

Legislative negotiators struck a compromise on the second day of a rare General Assembly special session yesterday that would limit doctors' insurance increases at 5 percent in the coming year, instead of the 33 percent increase that they face Jan. 1. Other agreed-to reforms would make patients safer, discipline negligent doctors and change the way courts award damages for injuries and improper care.

Ehrlich called the effort "relatively minor" and "a wasted opportunity" to create more meaningful reforms. "It's a shame," he said. But the governor vowed to reintroduce legislation with stricter limits on lawsuits, as he originally proposed, when the General Assembly reconvenes in two weeks.

"It appears the net result of this experience is a tax bill which is regressive and is legal-reform light," Ehrlich said last night after receiving a briefing on the results of the negotiations, "which is not what the people of Maryland wanted."

Eager to wrap up a holiday-week special session called by the governor, lawmakers decided to stay well past midnight while the final version of a 100-page bill was printed. Legislators grew giddy as the hours passed. While some drank coffee, others retired to local inns or found secluded rooms for card games. Del. Salima S. Marriott napped on a couch in the House lounge.

With Ehrlich promising to follow through with a veto, some lawmakers were unsure whether they had wasted their time. But others maintained that something of substance had been accomplished.

"The juice was worth the squeeze to come down here, and do what we did," said Del. Joseph F. Vallario Jr., a Prince George's County Democrat and one of the House negotiators.

Vallario and others said there were sufficient votes in both chambers to override a gubernatorial veto, a vote that could come as early as Jan. 11. That's when lawmakers are scheduled to take up a series of veto overrides, a day before the start of the 90-day regular session.

Health providers had mixed reaction to summaries of the legislature's plan.

"We have a lot of docs on the edge, and this is a great step in the short term," said Dr. Stephen L. Diehl, a Hagerstown radiologist who has been lobbying for reform as part of the Save Our Doctors Protect Our Patients Coalition. "A long-term solution involves mostly tort reform, but we got some significant tort reform as a first stage."

But Del. Dan K. Morhaim, a Baltimore County Democrat who is also an emergency room physician, said he thought the conference bill was "seriously watered-down tort reform," and blamed the Senate for not considering more sweeping changes. He said he would support it reluctantly, because "it does keep a number of doctors in practice for a year."

Representatives of the state medical society and hospital association said they would need to study the bill before commenting.

Ehrlich and the Assembly remain locked in a standoff over which public funds should be used to help doctors defray their soaring costs. The Democrat-controlled legislature wants to remove a decades-old tax exemption applied to health maintenance organizations, making them subject to the same 2 percent premium tax paid by other insurers.

Ehrlich, a Republican, has repeatedly called such a tax "regressive," and his veto of the bill is virtually guaranteed. Instead, the governor wants to use a corporate tax windfall to create a stopgap fund for doctors who say the insurance increases are forcing them to curtail care and even quit.

Legislative leaders insisted they were proud of their work over the past three days to balance the desires of trial attorneys, hospitals, doctors and patient victims.

"I'd like to think the governor will have time to reflect on this bill and see the good it does for the people of Maryland," said Senate President Thomas V. Mike Miller. He called the agreement "almost miraculous."

Likewise, House Speaker Michael E. Busch said Ehrlich should be pleased with the limits on jury awards and expert witnesses contained in the final plan, because it includes many of the legal reforms Republicans have long championed.

Sen. Brian E. Frosh, a Montgomery County Democrat and key negotiator of the compromise, called the consensus package "a comprehensive approach to the problem - balanced, effective and fair." He said it would reduce future litigation costs more than the version offered last week by the governor.

Del. John Adams Hurson, the chairman of the House Health and Government Operations Committee said it included "major pieces of tort reform," and stronger patient safety and insurance reform measures than the governor's bill.

Key provisions of the bill include:

Payouts: The limit on so-called pain and suffering noneconomic damages would be locked in at the current $650,000, ending an annual inflation adjustment. In death cases, the limit would be set at $812,500 - half the current level. Courts could use neutral experts to assess lost wages and future medical costs.

Process: There would be tighter limits on qualifications of expert witnesses, and plaintiffs would have to file a more detailed "certificate of merit" with an expert explaining what he thought the doctor had done wrong. Apologies made by doctors couldn't be used as evidence against them, although admissions of fault could. Mediation would be mandatory, in an effort to settle more cases before expensive trials.

Reimbursement: To help doctors meet higher costs and to provide incentive to treat the poor, doctor reimbursements under Medicaid would be increased, with the decision on how to set the enhancements left to the state health department.

Patient safety: The board that disciplines doctors would have an easier standard of proof, matching that in most other states. Insurers could more quickly cancel doctors considered bad risks. The existing state Patient Safety Center would have an expanded data-collection role.

Insurance regulation: A People's Counsel would represent consumers in malpractice (and homeowner) premium rate hearings. The insurance commissioner should consider insurers' surplus and reserves in approving future rate hikes. The state's largest provider of doctors' insurance would have enhanced reporting requirements, including making public executive salaries.

Lost from the conference version were several provisions from the stronger House bill. The House version would have paid only 85 percent of projected future lost wages, to account for taxes paid. And it would have provided extra liability protection for doctors working in emergency rooms.

The governor and legislative leaders appeared to stop negotiating by late yesterday afternoon after the rancorous course of the special session became clear and chances of an agreement evaporated.

In a last-ditch effort, Republicans continued to search for an alternative to the HMO tax yesterday. The governor floated several alternatives to finance his proposed short-term relief for doctors over the next three years that he expects to cost about $90 million. One was to use some of Maryland's share of the national tobacco settlement - a proposal offered by Republican senators at midday that was quickly defeated.

As with many issues in Annapolis since Ehrlich's election ushered in an era of divided government, the governor and other politicians focused as much energy yesterday on positioning and blaming as on solving problems.

Ehrlich took credit for bringing attention to the issue, but Democratic lawmakers questioned his commitment to a solution. Rankling many lawmakers and staffers by disrupting their holidays, the governor summoned the legislature before reaching a firm consensus with legislative leaders on major elements of a reform bill.

"From my standpoint, this whole set of circumstances has defied logic," Busch said. "He should not have called a special session."

The lack of agreement seemed to further erode already strained relations among state political leaders, particularly between Ehrlich and Miller.

"I'm the governor. He's the president of the Senate," Ehrlich said. "We will deal with each other as adults."

Malpractice glossary

Here's what some of the key terms mean in the malpractice debate:

Stabilization fund: The state is looking to set up a fund to help doctors pay malpractice premiums. Premiums have increased as the amount paid out to plaintiffs has risen sharply over the past few years. Doctors have said this will force some of them to leave practice or to cut back on high-risk medical services - for example, by not signing up to be on call for emergency rooms. The state could either pay part of premiums directly or could set up a fund to reimburse insurers if their lower premiums didn't cover future claims.

HMO premium tax: Democrats in both houses propose paying for the stabilization fund by ending an exemption for HMOs from a 2 percent tax on premiums that is paid by other insurers. The exemption was granted in the 1970s to help HMOs get started. Republicans, including Gov. Robert L. Ehrlich Jr., call this a new tax and say it would hurt small businesses and working families already struggling to pay health premiums. Republicans say premiums for families would increase by about $200 a year if the HMOs passed the tax through to employers and members. Democrats say HMOs, competing for business, might not raise their premiums at all. And they say ending the exemption wouldn't be a new tax, but simply closing an outdated loophole.

Tort reform: Tort law covers what happens when someone claims to have been harmed by someone else - for example, when a patient claims an injury caused by medical error. Both legislative houses and the governor say they need "tort reform" - changes in the way courts judge fault and assess damages in medical malpractice cases.

Apology law: This would say that if doctors apologize to patients for bad medical outcomes, the apology couldn't be used in a malpractice case. Supporters say it will improve the relationship between doctors and patients, and that it has led to fewer suits in states, such as Colorado, that have passed such laws. Opponents say it could allow a doctor to, in effect, admit guilt without being held to account for negligence.

Medical Mutual: The insurance company was set up in 1975 when commercial insurers left the state. Like all mutual insurance companies, it is owned by its policyholders - in this case, Maryland doctors. It insures most doctors in the state, and its policies - how much money it keeps in reserve, how much commission it pays - have been under a microscope during the malpractice debate.

- M. William Salganik

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