The House of Representatives today passed H.R. 5, the Protecting Access to Healthcare (PATH) Act of 2012, by a vote of 223-181. Manufacturers applaud the important medical liability reform provisions in the bill that will lead to more manufacturing jobs. The NAM has long supported medical liability reform as it reduces the cost of health care insurance for employers and restores fairness to the legal system. Manufacturers in the U.S. are leading the world in innovation when it comes to developing life-saving technology that improves the longevity and quality of life. Our legal system can discourage innovation in the United States and can place our manufacturers at a global competitive disadvantage. Medical liability reform is a commonsense way to reduce health care costs and promote new products and technologies here at home.

The legislation would place a $250,000 cap on non-economic damages and limitations on the maximum amount awarded for punitive damages. The bill also would prohibit punitive damages, which produce inconsistent “jackpot justice” awards, for medical products that comply with Food and Drug Administration (FDA) standards, after all if you are complying with tough federal standards and licensing requirements how can you be acting with malice or gross neglect? H.R. 5 would establish a uniform and fair statute of limitations and would give courts the ability to limit attorneys’ excessive contingency fees to make sure that victims receive fair compensation.

The medical liability reforms of H.R. 5 are modeled after California’s longstanding and successful health care litigation reforms signed into law in 1976 by then and now current governor Jerry Brown. The California reforms have kept in check the rate of increase in medical liability premiums. Meanwhile, the rate of increase in malpractice premiums nationwide has skyrocketed at nearly three times the rate of increase in California. Medical liability reform is also beneficial for the bottom line of the federal government. The nonpartisan Congressional Budget Office (CBO) estimates that the reform provisions of H.R. 5 will save the federal government $48.6 billion over ten years by reducing Medicare and Medicaid spending and lowering the cost of health insurance for federal workers.

This vote is a victory for manufacturing in America.  To see the NAM’s key vote letter on HR 5 click here.

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