Torture tort reform in Nevada

In an effort to thwart a perceived “crisis” and based on fears concocted by media campaigns designed to shift focus from the real problem, the citizens of the state of Nevada passed a ballot banning the non-economic limited damage in case of medical malpractice. See NRS 41A.035. This cap is unconstitutional under both the provisions of the United States and the Nevada Constitution. The courts should declare the non-economic damage limit unconstitutional.

A. The problem

NRS 41A.035 and related provisions, collectively sometimes referred to as “tort reform”, were enacted to address the perceived problem of skyrocketing insurance rates for medical malpractice, coupled with the belief that such rates were driving physicians out of practice, their practices limited, or completely abandoned from the state of Nevada. The urgency of the need for action and the perception presented was that this issue was somehow immediately and causally related to recent unreasonably high jury verdicts that caused harm to insurers justifying unreasonable rate increases for medical malpractice.

The “problem” is not some twenty-first century creature that has recently turned from a single cell into a full-blown tumor. On the contrary, the “problem” has existed for decades. For example, in September 1976, the Legislative Committee of the Nevada State Legislative Council Office issued Bulletin No. 71-1 entitled “The Problem of Medical Malpractice Insurance.” This bulletin grew out of contemporaneous Senate Resolution No. 21 (1975) which mandated the investigation. The resolution states,

CONSIDERING that there is a nationwide problem of physicians and healthcare providers purchasing malpractice insurance, with many of the insurance companies coming out of malpractice and others increasing premiums by several hundred percent; and…

WHEREAS the malpractice problem in Nevada is currently in transition and the exact magnitude of some of the problems is unclear; of high premium costs and decreasing availability of insurance.

B. The historical causes

It is important to have a general understanding of the “causes” of the alleged crisis in order to assess whether the proposed “solution” is rationally related to the interest one wishes to protect. In the 1976 Bulletin, the Commission identified a number of possible causes. First, the Commission found that there was no single “cause”. Among the causes, the Commission identified: (a) malpractice itself; (b) the media; (c) national disputes; (d) contingency allowances; (e) imposing no-fault insurance; (f) stock market losses; (g) Insufficient Acceptance; and (h) jury verdicts.

While these are not all causes, they represent the most discussed. However, the Commission concluded that the main cause of the medical malpractice crisis was the medical malpractice itself. A decade later, the Legislative Commission reviewed the crisis and published a “Study of Insurance Against Medical Malpractice,” Bulletin No. 87-18, Legislative Commission of the Legislative Counsel Bureau, State of Nevada, Aug. 1986. (Addendum IV). This bulletin acknowledged that between the years of 1976 and 1983, national insurance rates for medical malpractice increased only 51%. However, the cycle flowed again, resulting in dramatic increases in 1984 and 1985. Id. This again aroused legislative interest. This time, in addition to the causes discussed earlier, the Commission stated “the insurance industry is at least partly responsible.”

C. The historical solutions

Solutions to the alleged crisis were already proposed in the Commission’s 1976 study. One of the proposed solutions included “tort reform”. These reforms include limitation of jury verdicts. ID card. As early as this report, however, the evidence suggested that Plaintiff’s statistical probability of success was so low that such a restriction would have almost no real impact on insurance rates and availability. The 1976 bulletin states, “Only 8 percent of all claims ever go to court. Only 6 of that 8 percent reach a verdict.” Only 17 percent of that was for plaintiffs.”

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D. The problem of the twenty-first century

With historical perspective and understanding, we are brought to the acute crisis that led to the eventual enactment of NRS §41A.035, limiting non-economic damages to $350,00.00. The clear goals behind this tort reform movement included: (a) reducing medical malpractice insurance rates; (b) stabilizing the insurance market and the availability of that insurance; and (c) ensuring the availability of medical care for the residents of Nevada.

NRS §41A.035 was introduced in 2003 as Senate Bill 97, which tracked the initiative application and possible ballot submission to voters. The legislative history is full of references to the fact that Senate Bill 97 and the ballot language were identical. So while the legislature itself has not enacted NRS §41A.035, the discussions for the legislature are informative and relevant. On March 23, 2003, Dr. Manthei, a person whose name was synonymous with the initiative petition, before the Senate Judiciary Commission stated, “All we’re saying right now is that the number of cases and the amount of awards is making health care prohibitively expensive.”

On March 5, 2003, Mrs. Alice Molasky-Arman, Nevada Commissioner for Insurance, addressed the Senate Judiciary Committee. She testified that between 1999 and 2001, 296 of the 552 claims filed were closed without payment of damages. She further testified that in July 2002 there was a huge spike in the number of claims filed. ID card. Ms. Molasky-Arman stated that the 2002 tort reforms have not resulted in insurance rates falling. Both Lawrence Matheis and Assemblywoman Buckley stated that the reforms would not reduce insurance premiums. At best, there was some hope that the reforms would lead to stabilization. ID card.

In discussing the causes of insurance premium increases in Nevada, Ms. Molasky-Arman included among those causes: (a) reinsurance; (b) the lack of competition between insurers; and (c) stock market losses. She did not include jury verdicts and their impact on rates in her statement regarding causes.

With the foregoing backdrop of the alleged “crisis”, the citizens of the state of Nevada were subjected to a media blitz from both supporters and opponents of the ballot. With fears of unavailability of medical care driving their votes, the citizenry passed legislation embodying NRS §41A.035. It’s now a confusing contradictory mess to say the least. We will elaborate on this issue in our next EZINE article, or you can write or email us and we will provide you with a list of possible solutions we are currently taking on behalf of our medical malpractice clients.

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