Maryland’s Experience With Medical Malpractice “Tort Reform”

A recent case decided by the Court of Appeals of Maryland (the highest state appellate court in Maryland) reviewed the path that Maryland has taken with regard to medical malpractice “tort reform.” The Court of Appeals reviewed the history of the law of medical malpractice in Maryland:

Over the past four decades, the Maryland marketplace has undergone three major medical liability insurance “crises,” each of which engendered legislative responses changing the statutory scheme regulating medical malpractice suits…

A. The First Crisis: 1974 – 1983

In 1974, reacting to the upwardly spiraling cost of servicing medical malpractice insurance policies, St. Paul Fire & Marine Insurance Company (“St. Paul”) notified the Maryland Medical and Chirugical Faculty (“MedChi”), the leading professional organization of doctors in the State, that St. Paul would not allow doctors to renew insurance coverage plans that expired as of 1 January 1975… St. Paul, at the time providing medical malpractice insurance to approximately eighty-five percent of physicians based in Maryland, explained its withdrawal as caused by a deficit of nearly ten million dollars in providing medical malpractice insurance in Maryland at the then-current rates. The company was unable to offset these massive losses, assertedly because the Insurance Commissioner of Maryland had refused its prior requested rate increase. 

In its 1975 legislative session, the General Assembly created the Medical Mutual Liability Insurance Society of Maryland (“Medical Mutual”), a physician owned mutual insurance company, in response to St. Paul’s threatened exit from the Maryland medical malpractice insurance market. The creation of Medical Mutual, however, was merely a bridge to greater relief in the 1976 session.

In 1976, the General Assembly sought to treat more effectively the malaise that was ailing the medical malpractice insurance market. The General Assembly passed the Health Care Malpractice Claims Act, HCMCA, in 1976 to alter the manner in which malpractice claims were brought and resolved. The HCMCA modified the existing medium in three main ways: (1) it created the Health Claims Arbitration Office “to facilitate and expedite the resolution of malpractice claims”; (2) it created, through an arbitration panel, an exclusive arbitration procedure for resolving all claims over $5,000; and (3) it provided that the arbitration panel’s award would not be binding and all awards could be rejected and recourse had thereafter to traditional judicial actions and remedies.

Over the next two years, much litigation ensued, challenging the constitutionality of the HCMCA and causing the arbitration scheme not to take effect until 1978, when the Court upheld ultimately as constitutional the HCMCA. Though different aspects of the HCMCA were challenged in several cases in 1980, in both state and federal courts, the arbitration process seemed to staunch the bleeding of the first medical malpractice insurance crisis.

B. The Second Crisis: 1983- late 1990s

Less than ten years after the first medical malpractice insurance crisis, in 1983, the General Assembly recognized, by adopting Senate Joint Resolution 14, that the State was in the midst of its second malpractice insurance “crisis,” as the cost of malpractice insurance had increased ten-fold since the first “crisis.” In 1984, Senate Bill 16 presented several recommended changes to tort doctrines and the manner in which malpractice claims were processed. This Bill, among its proposed changes, included a requirement of a “certificate [of] a ‘qualified expert’ attesting to a departure from the standards of care or informed consent,” to be filed within ninety days of filing the claim, and that the “qualified expert” selected may not receive more than fifty percent of his or her income from testifying in malpractice cases. Although the Bill did not pass, its demise spawned, like a mushroom from decay, the creation of a task force whose purpose was to investigate trends in medical malpractice claims. In December 1985, the task force reported to the General Assembly that, since 1984, medical malpractice liability insurance premiums increased, depending on the medical specialty and hospital involved, between thirty and 250 percent.

In 1986, the General Assembly enacted Senate Bill 559, which made several amendments to the HCMCA in response to the task force report. Several provisions aimed to reduce total amounts paid by insurers on claims or judgments – (1) a “cap” was placed on non-economic tort damages at $350,000; (2) a reduction of damages was allowed if the plaintiff received benefits from a collateral source (i.e., health or disability insurance); and (3) the statute of limitations was decreased for a minor to bring a claim.

Additionally, Senate Bill 559 amended provisions of the HCMCA relating to the use of experts in medical malpractice cases. As proposed initially in S.B. 16 (1984), the arbitration process was changed to require the filing of a qualified expert certificate and to mandate that such an attesting expert receive no more than fifty percent of his or her income directly from testimony in personal injury cases.

At common law, prior to the 1986 amendment to the HCMCA, a claimant was not required to file a certificate of a qualified expert and no similarly-stringent qualifications were placed on the testifying expert in medical malpractice actions. In adding such requirements, the certificate requirement is in derogation of the common law, intended to place additional requirements on a claimant. The purpose of this departure from the common law has been stated several times by our appellate courts as reflecting the General Assembly’s desire to “weed out” non-meritorious medical malpractice claims. 

C. The Third Crisis: Early 2000s

The third medical malpractice insurance “crisis” followed a near twenty-year period of relative stability. Throughout the late 1980s and continuing into the 1990s, the medical malpractice insurance market remained fairly stable. The most relevant change to the HCMCA during this period came during the 1995 legislative session when the General Assembly enacted a bill permitting waiver by either party of the entire arbitration process. This relative stability in the market led to “fiercely competitive pricing on premiums,” and “[p]rofitability was made possible by slow claims growth coupled with favorable economic conditions.” In 1999, however, medical malpractice premium rates increased dramatically throughout the country. Maryland physicians and hospitals felt the effects of these increases in premiums in the early 2000s, with only four insurers providing malpractice insurance to the entirety of the State’s physicians and hospitals, after ten insurers abandoned the State beginning in 1995. 

In 2004, the General Assembly called a special legislative session to address the latest medical malpractice insurance crisis and enacted several changes to the HCMCA. Most relevant to the present case, the 2004 amendments added qualifications for the expert attesting in the Certificate or testifying before the arbitration panel or court regarding the compliance with, or departure from, the standard of care by the defendant. The amended CJ § 3-2A-02 (c)(2)(ii) states: 1. In addition to any other qualifications, a health care provider who attests in a certificate of a qualified expert or testifies in relation to a proceeding before a panel or court concerning a defendant’s compliance with or departure from standards of care: A. Shall have had clinical experience, provided consultation relating to clinical practice, or taught medicine in the defendant’s specialty or a related filed of health care, or in the field of health care in which the defendant provided care or treatment to the plaintiff, within 5 years of the date of the alleged act or omission giving rise to the cause of action . . . .

The legislative history illuminating the purpose of this amendment is scant. In his letter vetoing the proposed House Bill 2 of 2004, which was adopted over the veto, then-Governor Robert L. Ehrlich, Jr. stated that the provisions dealing with expert witnesses were intended to “prevent the prevalent use of ‘hired gun’ experts who do not practice medicine but instead have become experts for hire.”

The current limitations with regard to noneconomic damages in a medical malpractice case in Maryland are found in

§ 3-2A-09. Limitation of noneconomic damages. 

(a) Application of section. — This section applies to an award under § 3-2A-05 of this subtitle or a verdict under § 3-2A-06 of this subtitle for a cause of action arising on or after January 1, 2005.

(b) In general. —

(1) (i) Except as provided in paragraph (2)(ii) of this subsection, an award or verdict under this subtitle for noneconomic damages for a cause of action arising between January 1, 2005, and December 31, 2008, inclusive, may not exceed $ 650,000.

(ii) The limitation on noneconomic damages provided under subparagraph (i) of this paragraph shall increase by $ 15,000 on January 1 of each year beginning January 1, 2009. The increased amount shall apply to causes of action arising between January 1 and December 31 of that year, inclusive.

(2) (i) Except as provided in subparagraph (ii) of this paragraph, the limitation under paragraph (1) of this subsection shall apply in the aggregate to all claims for personal injury and wrongful death arising from the same medical injury, regardless of the number of claims, claimants, plaintiffs, beneficiaries, or defendants.

(ii) If there is a wrongful death action in which there are two or more claimants or beneficiaries, whether or not there is a personal injury action arising from the same medical injury, the total amount awarded for noneconomic damages for all actions may not exceed 125% of the limitation established under paragraph (1) of this subsection, regardless of the number of claims, claimants, plaintiffs, beneficiaries, or defendants.

If you or a family member have become the victim of medical malpractice in Maryland or in any other state in the United States, visit our website to be connected to local medical malpractice lawyers who may be able to assist you with your medical malpractice claim. You may also reach us toll free at 800-295-3959. Click here to learn more about our Featured Maryland Medical Malpractice Lawyer. Turn to us when you don’t know where to turn.

This entry was posted on Wednesday, August 17th, 2011 at 10:20 am. Both comments and pings are currently closed.


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