AUSTIN – Even if a hospital in a rural area goes years without being sued, high insurance premiums might contribute to the hospital’s closure – that’s one of the arguments made in favor of a bill seeking to limit a plaintiff’s recovery against rural hospitals.
Texas leads the nation in rural hospital closures. Hoping to help stop the bleeding, Rep. Jay Dean introduced House Bill 1491, which seeks to cap noneconomic damages for rural hospitals at $100,000 in medical malpractice lawsuits.
Currently, noneconomic damages in med-mal cases are capped at $250,000, except for non-profit hospitals.
Today, the Texas House Judiciary & Civil Jurisprudence Committee heard testimony on HB 1491.
“Our rural hospitals need help. They operate on razor thin margins,” Dean testified, adding that 77 out of the 254 counties in Texas don’t have hospitals.
Dean stressed that his bill would only impact noneconomic damages, meaning plaintiffs wouldn’t be capped on damages for medical expenses and lost wages.
The committee also heard from Adam Willman, chairman of the Texas Organization of Rural and Community Hospitals, who testified that he believes the bill could end the trend of rural hospitals shutting down in the state.
Committee members raised a number of issues during the hearing, questioning whether the cap should be adjusted for inflation and if the real problem hurting rural hospitals is lack of reimbursement from Medicare and Medicaid.
“I don’t think it’s a singular issue – it’s death by a thousand cuts,” Willman testified.
Attorney Jay Harvey spoke on behalf of the Texas Trial Lawyers Association, testifying that he believes the bill would limit access to the courts because attorneys would be unwilling to take a case if noneconomic damages are capped at $100,000.
Rep. Dean later responded by saying that $100,000 may not be enticing to big city lawyers but rural attorneys might still take the case.
Last to testify was Brian Jackson, an attorney for the Texas Alliance for Patient Access.
Jackson said he believes HB 1491 will lower insurance premiums for rural hospitals, freeing up financial resources that can be directed elsewhere.
He also said that some rural hospitals have to be supported by tax dollars and that he thinks the bill can provide monetary relief as well.
The committee left the bill pending.