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AMA, ISMA join effort to oppose attorneys’ litigation tax deduction
e-Reports, September 20, 2010
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Proposed tax change could threaten health care costs
The ISMA has joined the AMA and 89 other medical organizations in opposing a proposed federal tax policy that would allow trial attorneys to deduct litigation expenses from taxes in certain cases.

“Changing the tax policy to allow trial attorneys to deduct court costs and other expenses would cost taxpayers $1.5 billion and increase the cost of health care in our nation,”
said J. James Rohack, M.D., AMA immediate past president.

In a letter to the U.S. Treasury Department, the groups noted that such a policy change would encourage trial attorneys to file more lawsuits, which would add to the overall costs of health care. It stated, “Even though a substantial majority of claims are dropped or decided in favor of physicians, the cost of defending against meritless claims averages over $22,000. This leads to increased costs for physicians and patients – money that could otherwise be spent expanding coverage to the uninsured.”

The groups also expressed concern that such a ruling would conflict with state ethics rules against trial attorneys providing financial assistance to clients without the expectation of being paid back upon the successful conclusion of a case.

A recent report by the AMA found 95 medical liability claims are filed for every 100 physicians. Currently, 65 percent of medical liability claims are dropped or dismissed. Furthermore, average defense costs average about $100,000.

Read the letter here.

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