Two Wisconsin tort reform proposals received approvals from a legislative judiciary committee Thursday and one more or less died.
The chairman of the Assembly Judiciary Committee, state Rep. Jim Ott, R-Mequon, said Assembly Bill 29, which would have allowed certain insurance payments and other types of collateral sources to be admitted as evidence, won’t be moving forward unless it is substantially changed. The bill has lost support, he said, in light of testimony given at a public hearing April 11, at which insurance industry representatives said the bill would raise medical insurance rates.
Peter Farrow, chief executive officer of the Group Health Cooperative of Eau Claire, testified that the proposed change would shift about $50 million in additional insurance costs onto Wisconsin businesses and residents. He also said it would prevent the state’s Medicaid program from recouping $10 million, a cost that would fall to taxpayers.
Matthew Falk, a lawyer who often represents health insurers in personal-injury cases, said Thursday those concerns result in part from Wisconsin’s requirement that plaintiffs be “made whole” before health insurers can recoup any of their costs. The trouble with allowing collateral sources such as insurance payments to be admitted in court, he said, is that medical insurers often use negotiations to obtain discounts. If the evidence of those discounts then results in smaller reimbursements and prevents plaintiffs from being made whole, health insurers will lose their right to recover their costs and will find themselves with little choice but to raise premiums.
Proponents had argued the legislation would prevent plaintiffs from collecting “phantom damages” and help keep down the cost of liability insurance.
The Assembly Judiciary Committee, meanwhile, approved sending two other tort-reform proposals onto the full Assembly. The vote split on a 6-2 party line in both cases.
The six Republicans on the committee voted for Assembly Bill 19, which would require plaintiffs in personal-injury cases to file any claims they might have against bankruptcy trusts before a trial may begin. Before the approval, the bill was amended to allow patients who are in danger of dying to give a deposition even if the court proceedings in their case have been stayed.
Assembly Bill 139 also earned approval. That bill would make doctors’ duty to inform patients of alternative treatments stop short of providing information about alternative diagnostic tests. It also would replace the state’s current “reasonable-patient standard” – meaning doctors are required to provide any information about treatments that a reasonable patient could expect to want – with a “reasonable-doctor standard.”
State Rep. Dana Wachs, D-Eau Claire, offered an amendment that would leave most of the bill untouched except for eliminating the provision that would make doctors no longer responsible for telling patients of alternative diagnostic tests. Without that amendment, he said, the bill would “gut” the state’s informed-consent law.
The Judiciary Committee voted against the amendment 6-2, again on party lines.
Both Assembly Bill 19 and Assembly 139 still must be approved by the Senate and signed by the governor before they become law.