Mandatory Spending
Function 550 - Health
Limit Medical Malpractice Torts
CBO periodically issues a compendium of policy options (called Options for Reducing the Deficit) covering a broad range of issues, as well as separate reports that include options for changing federal tax and spending policies in particular areas. This option appears in one of those publications. The options are derived from many sources and reflect a range of possibilities. For each option, CBO presents an estimate of its effects on the budget but makes no recommendations. Inclusion or exclusion of any particular option does not imply an endorsement or rejection by CBO.
| Billions of dollars | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2015-2019 | 2015-2024 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Change in Mandatory Outlaysa | -0.1 | -1.3 | -3.7 | -5.7 | -7.0 | -7.5 | -8.0 | -8.8 | -9.1 | -9.3 | -17.7 | -60.4 |
| Change in Revenuesb | * | 0.1 | 0.4 | 0.7 | 0.9 | 1.0 | 1.0 | 1.1 | 1.2 | 1.2 | 2.1 | 7.6 |
| Change in Discretionary Outlays | * | * | -0.1 | -0.2 | -0.2 | -0.2 | -0.3 | -0.3 | -0.3 | -0.3 | -0.6 | -2.0 |
Sources: Congressional Budget Office; staff of the Joint Committee on Taxation.
Notes: This option would take effect in January 2015. Estimates are relative to CBO’s August 2014 baseline projections.
* = between -$50 million and $50 million.
a. Estimates include potential savings by the Postal Service, whose spending is classified as off-budget.
b. Estimates include the effects on Social Security payroll tax receipts, which are classified as off-budget.
Individuals may pursue civil claims against physicians, hospitals, and other health care providers for alleged torts, which, in the medical field, primarily include breaches of duty that result in personal injury. This option would limit medical malpractice torts nationwide in several ways:
- Capping awards for noneconomic damages (also known as pain and suffering) at $250,000;
- Capping awards for punitive damages at $500,000 or at two times the value of awards for economic damages (such as for lost income and medical costs), whichever is greater;
- Shortening the statute of limitations to one year from the date of discovery of an injury for adults and to three years for children;
- Establishing a fair-share rule (in which a defendant in a lawsuit is liable only for the percentage of a final award that is equal to his or her share of responsibility for the injury) to replace the current rule of joint-and-several liability (in which all of the defendants are individually responsible for the entire amount of the award);
- Allowing evidence of income from collateral sources (such as life insurance payouts and health insurance) to be introduced at trial; and
- Imposing sliding-scale limits on the contingency fees that lawyers can charge.
For this option, CBO expects that changes enacted in January 2015 would take four years to have their full impact, as providers gradually modified their practice patterns.