NC Governor Vetoes Medical Malpractice Bill, Signs Workers’ Comp Reform

North Carolina Gov. Beverly Perdue, a Democrat, has vetoed a Republican-backed bill that capped noneconomic damages awards to $500,000 in most medical malpractice cases. But Perdue did sign into law a separate bill that reforms aspects of the state's workers' compensation system.

The bill Perdue vetoed, S.B. 33, was passed by the North Carolina General Assembly after a contentious debate among lawmakers over whether the cap should apply to cases involving deaths, disfigurements, permanent injuries or the loss of a body part. The House had proposed excluding those kinds of injuries from the cap, but Senate Republicans pushed to broaden the scope of the proposed cap. Ultimately, the House approved the Senate version of the measure.

The bill did make exceptions for cases where a patient can show malice or gross negligence by a physician. It also wouldn't have capped economic damages stemming from medical costs or lost income (BestWire, June 10, 2011).

In a statement accompanying her veto of S.B. 33, Perdue said she may be open to an amended version of the bill if lawmakers could come up with a compromise when they reconvene on July 13. "I commend the legislature for addressing this important issue but, in its current form, the bill is unbalanced," Perdue said. "I urge legislators to modify the bill when the General Assembly returns in July to protect those who are catastrophically injured. Once the bill is revised to adequately protect those that are catastrophically injured, I will proudly sign it into law."

The veto of S.B. 33 marked a blow to Republicans in the state, who had made its passage a top legislative priority. The Senate passed it by a large margin, but the House approved it with just an 18-vote margin. That narrow margin will make it difficult for the House to muster enough votes to override Perdue's veto.

Senate President Pro Tempore Phil Berger, R-Greensboro, said after the veto that Perdue had chosen to "cater to special interests" rather than reining in medical costs.

The workers' comp bill the governor signed makes significant changes to the system in North Carolina, marking the first time since 1994 that the state legislature focused on workers' comp reform.

Included in that bill, H.B. 709, are provisions that limit the duration of temporary total disability benefits to 500 weeks, but allows workers to appeal that cap if they meet certain requirements.

The bill increases the amount of time that injured workers can collect benefits for partial disability from 300 weeks to 500 weeks. H.B. 709 extends the timeline for death benefits from 400 weeks to 500 weeks.

In addition to gaining the support of the North Carolina Chamber of Commerce, the Employers' Coalition of North Carolina, trial lawyers and the AFL-CIO, who each said they viewed H.B. 709 as a compromise approach, the American Insurance Association also testified in support of the legislation.

In April, Kenneth Stoller, AIA senior counsel, said the bill was necessary when, compared with a number of benchmark states, North Carolina had the highest overall per-claim costs as well as the highest rate of surgery.

The top five writers of medical professional liability in North Carolina in 2010, according to BestLink, which provides online access to A.M. Best's database of insurance information, were: Medical Mutual Group, with a market share of 32.9%; MAG Mutual Group, with 19.8%; Berkshire Hathaway Insurance Group, with 5.3%; American International Group Inc, with 5%; and Zurich Financial Services NA Group, with 5%.

The top five writers of workers' comp in North Carolina in 2010 were: Liberty Mutual Insurance Cos., with 11.9%; Hartford Insurance Group, with 8.7%; Travelers Group, with 7.3%; American International Group, with 7%; and W. R. Berkley Group, with 6.7%.

(By Jeff Jeffrey, Washington Correspondent: [email protected])