Tort reform bill vetoed by Ehrlich

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ANNAPOLIS -- Gov. Robert L. Ehrlich Jr. yesterday fulfilled a promise to veto a medical-malpractice insurance reform bill that includes a tax on health maintenance organizations (HMOs), calling the measure "a tax on working families." But the Democratic-controlled General Assembly today is likely to override Mr. Ehrlich's veto when it convenes for an override session before the opening of its regular 90-day session tomorrow. The bill passed with veto-proof majorities in the House of Delegates and the Senate last month. "It's a weak resolution," the Republican governor said of the legislation, which was devised during a special legislative session that he had requested. "A few positive reforms are included in this bill," Mr. Ehrlich said during a press conference, flanked by members of his administration and a group of doctors. "The big-ticket items were negotiated away." The vetoed bill would freeze the cap on noneconomic damages, such as pain and suffering, at $650,000 for three years. Mr. Ehrlich had sought to reduce the cap to $500,000. Mr. Ehrlich also had sought to limit lawyers' fees and allow malpractice awards to be paid out over several years, which would be less expensive for insurance companies than paying awards in a lump sum. The bill does not include a "three-strikes" provision sought by Mr. Ehrlich that would discipline lawyers who file frivolous malpractice lawsuits. The bill also would not require the losing side to pay for the cost of litigation. The General Assembly's legislation would reduce the maximum payout for errors leading to death from $1.6 million to $812,500. "No changes were made concerning tax consequences of lost wages, and no changes were made concerning future medical bills," the governor wrote. "The provision of the bill that allows the court to appoint a neutral expert is a redundancy because current law already allows a court to appoint an expert in any case. This provision provides absolutely no relief." In addition, Mr. Ehrlich said the bill "hinges on a harmful tax that will serve to increase the cost of health care," adding that HMOs will pass the cost of the tax onto their customers. The bill would require HMOs to pay a 2 percent tax on their insurance premiums to generate about $64 million in revenue over three years to subsidize doctors' malpractice insurance premiums, which have risen an average of 70 percent in the past two years. Mr. Ehrlich last week said the state has earmarked $30 million from the general fund to reduce a 33 percent increase in malpractice insurance premiums this year. Nonetheless, the General Assembly's bill was endorsed by state groups representing doctors and hospitals, who had called on Mr. Ehrlich not to veto it. "Please, legislators, stick to your guns and override the veto," said Laurie Norris, an advocate for more funding for Medicaid. Montgomery County Executive Douglas M. Duncan, a Democrat who is thought to be eyeing a run for governor in 2006, favored the HMO tax. "This is a question of tax fairness," he said. "Why should one group get off without paying it?" But doctors appearing with Mr. Ehrlich yesterday voiced disagreement with their representative associations and supported his veto. "It is very light on tort reform," Hagerstown neurosurgeon Dr. Neil O'Malley said. "We never asked for money. We don't want taxpayer money. All we want is a level playing field. All we want is to be able to defend ourselves in court." Dr. Ron Elfenbein, who practices emergency medicine at Calvert Memorial Hospital in Frederick, agreed. "The bill does absolutely nothing to fix this problem," he said. "And this new tax is just outrageous." Still, Democratic leaders said they have enough votes to override a veto today. "I think it's likely to be overridden. The doctors support it. The hospitals support it," said Sen. Brian E. Frosh, Montgomery County Democrat. "I don't think there's anybody in the governor's corner anymore." Lawmakers are expected to attempt to override about 20 vetoes. One bill would require companies doing business with the state to pay workers at least $12.50 an hour; another would limit future tuition increases at state colleges and universities. Twenty-nine votes are needed for a veto override in the Senate and 85 in the House. The Democrats hold the needed majorities in both chambers. Mr. Ehrlich has promised to resubmit his medical malpractice bill at the start of the legislative session, if his veto is sustained today. He also has promised to include in his budget, to be submitted Jan. 19, an increase in Medicaid reimbursements and a plan to add millions to help defray the cost of the insurance premium increase. Under his plan, the general fund would supply $18.5 million in Medicaid reimbursements to help doctors in five high-risk specialities reduce their insurance premiums. The Medicaid reimbursements will total $37 million when the federal government matches the state's payment. • This article is based in part on wire service reports.