St. Louis Injury Law Journal : St. Louis Personal Injury Lawyer & Attorney : Aaron Farmer Law Firm : Car Accidents, Medical Malpractice : Missouri, Jefferson County

The cost of obtaining medical records for personal injury victims recently rose 3.16% from last year. The new rate for copying medical records will be $20.65 plus $0.49 per page for the cost of supplies and labor. Section 191.227, RSMo sets the base rate for fees for copying medical records at $17.05 and $0.40 per page for the cost of supplies and labor. This section also provides that effective February 1st of each year, the fees shall be increased or decreased annually based on the annual percentage change in the unadjusted, U.S. city average, annual average inflation rate of the medical care component of the Consumer Price Index for All Urban Consumers (CPI-U). The section further provides that the current reference base of the index, as published by the Bureau of Labor Statistics of the U.S. Department of Labor, shall be used as the reference base. 

I find it interesting that health care providers get a cost of living adjustment from patients paying for their own medical records. When a patient is injured due to negligence there is no corresponding cost of living adjustment for the same patient under our current unconstitutional non-economic damage cap of $350,000 in Missouri. I guess if personal injury victims could afford to pay lobbyists to work on their behalf in Jefferson City they would get an annual cost of living adjustment too.

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Like most of the county, Nevada bent to popular opinion by enacting a $350,000 cap on pain and suffering in 2004. To accomplish massive restrictions on negligence liability, insurance companies aired television ads of doctors walking out of town along the highway, fleeing from high malpractice insurance costs.

A congressional study and a national consumer advocacy group found at the time that the health care industry had spent millions of dollars exaggerating the malpractice crisis in Nevada and elsewhere in the country. Doctors overall weren’t actually leaving Nevada at a high rate. But the commercials, helped persuade voters to approve an industry-backed ballot initiative imposing a $350,000 cap on pain and suffering.

But the insurance industry didn’t bother to consider that minimizing their risk on claim payouts would lead to increased negligence. In Nevada, a Doctor is being sued for implementing cost-cutting strategies in his now closed endoscopy clinic that allegedly endangered the lives of his patients. Injured victims have claimed the Doctor re-used syringes without sanitizing them, and in many cases exposed his patients to Hepatitis C.

AB495 was recently introduced in the Nevada General Assembly. The bill seeks to eliminate the $350,000 cap. The measure also would increase the time limit for bringing a malpractice case to trial after it is filed. Instead of having two years, plaintiffs would have up to five years to get to trial.

Proponents of the bill state that the Hepatitis C outbreak has opened the eyes of the general public to the realities of tort reform. Damage caps have become vehicles that limit insurance company payouts without consideration of whether higher payments are justified based on negligence. As the public begins to see the lack of accountability in the medical profession created by damage caps they are beginning to wonder why they agreed to limit pain and suffering to $350,000 in the first place.

As more and more Americans realize how tort reform will impact their lives if they are injured, we are beginning to see judicial and legislative challenges to damage caps. While fancy television commercials can influence the public, the truth always shines through. In this case, the people of Nevada are beginning to think about how Doctors conduct themselves, not whether they are leaving because of insurance costs. Hopefully, it won’t take a hepatitis outbreak or other heath catastrophe for Missourians to realize how the insurance company cheated them into agreeing to limit pain and suffering damages to $350,000.
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Also see my other posts on tort reform myths:

Tort Reform: What’s Really Going On
Tort Reform Myths: Doctors Are Leaving
Tort Reform Myths: Jury Awards Are Out of Control
Tort Reform Myths: Greedy Attorneys File Frivolous Lawsuits
 

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The late 1970’s and early 1980’s saw a hard insurance market with investment income dwindling. By the mid 1980’s insurance rates when through the roof and there were cries of a “litigation crisis.” The 1980’s tort reform movement was strikingly similar to the modern movement. In fact, many states enacted some measure of tort reform during the 1980’s that modern tort reform proponents are seeking to strengthen. In 1986, the National Association of Attorneys General (“NAAG”) produced a report studying the litigation explosion of the 1980’s, they found:

The facts do not bear out the allegations of an explosion in litigation or in claim size, nor do they bear out the allegations of a financial disaster suffered by property/casualty insurers today. They finally do not support any correlation between the current crisis in availability and affordability of insurance and such a litigation explosion. Instead, the available data indicate that the causes of, and therefore solutions to, the current crisis lie within the insurance industry itself.

Clearly, there is some correlation between the stock market and the insurance underwriting cycle. The question becomes does the stock market drive the underwriting cycle, or does litigation?

In 2003, Weiss Ratings, Inc., and independent agency, explored the relationship between insurance premiums and damage caps. Strikingly, Weiss Ratings found that damage caps produced a 15.7% reduction in payout amounts in states that had enacted them, but the insurance rates in those states were not reduced. Further, this study found that insurance rates in states with caps increased faster than insurance rates in states without damage caps. In that regard, Weiss found there were six factors driving the increase in insurance premiums: (1) medical cost inflation, (2) the cyclical nature of the insurance market, (3) the need to shore up reserves for policies in force, (4) a decline in investment income, (5) overall financial safety considerations, and (6) the supply and demand of coverage. Beyond that, Weiss specifically found that the current rise in insurance rates was due to under-reserving throughout most of the 1990’s combined with the rapid decline of the stock market in the early 2000’s, not a litigation crisis. Clearly, there is something going on with the insurance industry the general public are unaware of. Political banter pushing the tort reform agenda never discusses the inner-workings of the insurance industry itself –after all litigation is to blame. But put all that aside, where has tort reform left us, is this workable for everyday Americans?
 

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Another of the many myths that have enabled tort reform is the claim that doctors are leaving certain areas due to skyrocketing insurance prices. The simple truth is, the number of practicing physicians in the United States is increasing, and is higher than it has ever been before. While there may occasionally be a correlation between physicians moving in and out of areas and insurance rates, does this represent causation? More likely, this correlation is the by-product of worker mobility that affects every job market in this country. Further, the U.S. General Accounting Office has analyzed medical malpractice insurance and its causes. In it’s 2003 report, the G.A.O. stated that “doctors’ groups have misled and fabricated evidence, or, at the very least, wildly overstated their case about how medical negligence problems have limited access to healthcare.” Additionally, the G.A.O. report revealed that the reported cases of doctors leaving were “inaccurate or involve relatively few physicians.” Thus, this claim seems to be more smoke and mirrors to blind the general public to what tort reform is really about.

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Another major claim of tort reform proponents is that jury awards are out of control. This claim is ironic to say the least, in every courtroom in America there is a dirty little secret corporate America exploits. As previously discussed: from jury selection, to cross examination, on to deliberation there is one thing on the mind of every juror deciding a tort claim in America today: that dumb old woman spilled coffee on herself and got $3 million dollars. The harsh reality that jurors are strongly biased against negligence claims is irreconcilable with tort reformers position that jury awards are out of control. Apparently, tort reformers want to have their cake and eat it too. Further, appellate courts typically knock down excessive jury awards.

A large portion of the debate over excessive jury awards centers around medical malpractice claims. In our inflationary economy the price of medical services has increased steadily. Strangely, medical negligence claims are valued primarily on future and past medical costs. The cost of reimbursing medical negligence has increased steadily with medical inflation. Information from the National Practitioners’ Databank reveals that,

the number of medical negligence payouts have decreased 36% between 1993 and 2002; the amount paid out per claim has risen, but by less than 6% per year, more than 1% less than the rate of medical inflation. ISMIE paid out less in actual dollars in 2001 and 2002 than it did in 1993. This reduction in payouts has contributed to record surpluses for the insurance companies over the past few years, despite their claims of a litigation “crisis” causing higher premiums.

Thus, the costs of medical negligence payouts have increased at rate less than half that of medical inflation. Further, the national Association of Insurance Commissioners has revealed a 4% decrease in claims between 1995 and 2000. It appears that the frequency of medical malpractice claims has went down, the total costs of payouts has went down, individual awards have increased proportionally with medical inflation, while insurance companies have steadily increased their medical malpractice insurance rates and claimed a litigation crisis. Once again, the statistics appear irreconcilable with the claims of tort reform proponents.
 

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One of the major claim’s tort reform proponents reference is a tale of greedy plaintiff’s attorney’s filing frivolous claims in hopes of winning the lawsuit lottery. The favorite fable of this media created folklore is the McDonald’s case. Therein, an elderly woman purchased coffee at a drive through window, put it between her legs and removed the top to put creamer in, and spilled the coffee causing third degree burns to her thighs, groin, and buttocks. These burns resulted in a series of skin grafts over two years, leaving permanent scars on 16 percent of her body. The crux of the case was that McDonald’s purposefully altered its coffee machines to brew at 180 to 190 degrees Fahrenheit which causes third degree burns within seconds of contact, compared to a home coffee pot which brews at 130 to 140 degrees Fahrenheit. Internal McDonald’s memos revealed this higher temperature was integrated into company procedure to attract business people who put the coffee in a thermos and wanted it to stay hot longer. Further, internal McDonald’s memos revealed that coffee lids with pull tabs where creamer could be poured were not purchased to save 3 cents per coffee. In addition, a McDonald's product assurance manager testified that “he had known for years of the damage his product caused, knew his customers did not know of the hazard and had done nothing to study or solve the problem in the face of an admittedly incomplete list of more than 700 burns.” Based on these facts a jury awarded the elderly woman $2.9 million dollars. Of this $200,000 was in compensatory damages, and $2.7 million was in punitive damages which equaled the total dollar amount of McDonald’s coffee sales per day. Thereafter, the trial judge reduced the award to $640,000 and the parties settled privately during the appellate process. Strangely, tort reform proponents only repeat the initial jury award of this case while revealing a minuscule amount of the facts that led to it. Most significantly, this limited portrayal is on the mind of every juror sitting through voir dire in a civil case: some woman got $3 million dollars for spilling coffee on herself.

The McDonald’s case could be an odd example, perhaps it was a fluke, revealing the truths of that case doesn’t refute that plaintiff’s attorney’s aren’t filing frivolous lawsuits. However, a Harvard study found that one out of every eight people who are legitimate victims of medical malpractice files a claim. Medical malpractice tends to get a majority of public attention concerning tort reform, yet this statistic is conveniently left out. One out of every eight legitimately injured victims filing a claim tends to suggest a lack of filing of meritorious cases rather than a glut of frivolous cases. Further, tort claims as a percentage of civil filings have steadily declined between 1990 and 2006. In that regard, tort filings decreased 4% in the 35 most populous states between 1993 and 2002. At face value, these statistics indicate the myth of frivolous lawsuits is at the very least an overstatement.

Many tort claims are taken on a contingency fee basis where a plaintiff’s attorney incurs the costs of pursuing the claim in exchange for a portion of any amount’s recovered. Simply put, there is no logical reason a plaintiff’s attorney would risk thousands of dollars on an unmeritorious case; as a business investment, the probability of return on a baseless claim provides no motivation to file a frivolous lawsuit. Additionally, if a frivolous claim is filed, and there is no evidentiary support to sustain it, sanctions will be imposed on the filing attorney(s). In sum, filing a frivolous claim is a bad business decision that carries with it a strong likelihood of financial loss, and the risk of court sanctions.
 

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Tort law (personal injury law) is a unique creation 500 years in the making. It has been molded over many centuries to yield what society has accepted as fair and just. Traditionally, scholars have defined a two pronged objective of tort law: compensation and deterrence. Money penalties are used as a vehicle to force negligent actors to regulate themselves. Regulating through money damages, our tort system deters future negligent actors by establishing liability for money damages if they do not comply with the standards of conduct the system has established. Our tort law is not perfect, neither is any other area of our common law. The American jurisprudential tradition allows for laws to change with the needs of the time. Our modern era has seen cries for and acquiesced to tort reform.

In 2005, the Missouri legislature passed group of laws popularly known as “tort reform.” The major component of this “tort reform” was a cap on non-economic damages, also known as pain and suffering. The cap limits damages to $350,000 per injury regardless of the number of defendants or occurrences. The statute limits non-economic damages to $350,000 no matter how many times the defendant was negligent. Further, all individuals asserting wrongful death claims are considered one plaintiff for cap purposes. Punitive damages have been capped at the greater of $500,000 or five times the net amount of the judgment awarded to the plaintiff against defendant. All medical negligence cases require a bifurcated (separated) trial to determine punitive damages. In Missouri, civil venue is proper in any circuit a defendant may be served, except tort actions which can only be filed in the circuit where the injury first occurred. Joint and several liability has been modified, a defendant is only liable for the entire judgment when he is 51 percent or more at fault. To file a medical negligence claim, a plaintiff must include with the petition an affidavit of merit which includes the name and address of their medical expert, and an affirmative statement that the medical expert has examined the record and has found medical negligence. Further, medical experts have been restricted to licensed health care providers in the same profession as the defendant, and either actively practicing or within 5 years of retirement from actively practicing substantially the same specialty as the defendant, thus tightening who may be a medical expert.

In 1986, massive amounts of the nation’s manufacturers, trade associations, and insurance companies formed the American Tort Reform Association (ATRA). The manifesto of this corporation was to raise mass sums of money to throw at legislatures to “enact legislation that would make it more difficult for citizens to sue business enterprises.” Most of ATRA’s members are large corporations seeking protection from products liability, but insurance corporations, the American Medical Association, the American Hospital Association, and the American Osteopathic Association are members. Since ATRA’s formation, in excess of 45 states have enacted some or all of it’s agenda. Further, in the same period more than thirty states have passed restrictions on punitive damages. The New York Times has described ATRA’s efforts “an attempt to replace traditional American civil jurisprudence with Britain’s class-based system of fixing the courts in favor of businesses and wealthy individuals.”

ATRA is not the only large scale tort reform group, but their antics are uniform with other similar entities. These organizations have perpetrated the mis-information that has plagued public debate over this topic. Their agenda is force fed to the American public through paid advertisement, and paid politicians. For instance, ATRA likes to provide single paragraph summaries of cases that represent “looney lawsuits.” These summaries present a jury award and a trivialization of the claim which offers none of the essential facts of the case. In some instances, they only provide the amount the plaintiff is seeking in damages. Surely, any legal mind can understand that the merits of a lawsuit cannot be described in 2-4 sentences to the general public. One of ATRA’s best public relations stunts was it’s depiction of the case it called “Pickled Justice,” following is their version:

A West Virginia convenience store worker Cheryl Verdender [sic] was awarded an astonishing $2,299,000 in punitive damages after she injured her back when she opened a pickle jar, according to the Charleston Daily Mail. She also received $130,066 in compensation and $170,000 for emotional distress. State Supreme Court Justice Spike Maynard called this award an “outrageous sum,” stating in his dissenting opinion: “I know an excessive punitive award when I see one, and I see on here.” The court, however, upheld most of the punitive damages: $2.2 million.

Like most American citizens, I’m appalled when I see this kind of story. Why would a woman get over $2 million dollars for hurting herself by opening a pickle jar? The problem here is that ATRA has not provided us with all the information about this case and sculpted this extract to favor their position. For example, this was a workers’ compensation claim where a convenience store manager suffered a back injury while opening a large pickle jar, had surgery, and came back to work twelve months later with restricted lifting ability. The chain convenience store had a past history of forcing these type of employees out after they had made a workers compensation claim. Mrs. Verdender was wrongfully discharged and never sued the pickle company. The punitive damage award was in response to a policy of wrongful discharge, the rest of the award was for lost wages and emotional distress. Surely, the American public would have a different take on this and all tort reform issues if they had complete information.

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