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Legislative Report for April 7, 2017

 

Today marks the first major deadline of session. By tonight at midnight, all bills that have not yet passed their originating chamber must be scheduled for a committee vote or they are considered dead. The emotional turmoil caused by the deadline has already driven divisions between and within the caucuses as beloved priority bills are pronounced dead. Legislators usually veil their frustrations from the public, but many have been wearing their grievances as the totality of the budget and divisive policy battles begin to consume the building.

 

The groups leading the yes and no campaigns on Measure 97 (2016), the gross receipts tax proposal soundly rejected by voters, have rekindled their campaigns as a similar fight begins in the legislature. On Monday, Our Oregon held a press conference outlining their argument for the legislature to increase revenues to appropriately fund essential services and avoid draconian budget cuts as the budget-writing committee begins to balance the state budget. Similarly, a spinoff business group announced an advertising campaign urging voters to contact their legislators asking them to oppose any gross receipts tax, using the slogan “It’s Just a Sales Tax.” Oddly enough, there remain no details on a potential revenue package. Several placeholder bills have been introduced to ensure a vehicle is available if a conversation materializes, but the lack of details stages the announcements as nothing but a preemptive strike. The declarations from both emphasize the divisive battle the legislature will endure if negotiations between business and labor groups do not produce a budget compromise.

 

Political positioning is at an all-time high right now, and that will quickly become a problem for collaboration in the legislature. Several prominent members of the legislature are considering a run for higher office. The positioning is driving divisive votes on high-profile policy issues that deviate attention away from the necessities, such as balancing the structural budget shortfall. Ultimately, Oregonians elected their legislators to do the heavy policy lifting needed to solve these serious challenges facing the state. The partisan wrangling over peripheral issues will only impede their ability to find consensus and steer the ship to calmer waters.

 

Democrats side with insurers on balance billing

 

After a long and challenging conversation on how to end balance billing, the House Health Care Committee on Wednesday approved the -2 amendments to HB 2339 on a party-line vote.

 

Rep. Knute Buehler (R-Bend) made a motion to adopt the -4 amendments, which tie reimbursement to 225 percent of Medicare. From the outset, providers were united against the concept of tying reimbursement to Medicare, preferring instead to use a transparent, independent database with actual charges broken down by geographical region. Despite being tied to Medicare, the -4 is slightly preferable to the -2 amendments, which set the reimbursement at only 175 percent of Medicare. Setting reimbursement at 225 percent is better than 175 percent, though still not ideal.

 

Rep. Buehler, Rep. Cedric Hayden (R-Roseburg) and Rep. Bill Kennemer (R-Oregon City) spoke in favor of the -4, but it failed on a party-line vote with not a single Democrat voting in favor. Rep. Rob Nosse (D-Portland) then moved the -2 amendments. Chair Mitch Greenlick (D-Portland) called this an “agreement of the task force,” referring to the workgroup process organized by the Department of Consumer and Business Services (DCBS). In fact, this misguided idea was actually the starting place for negotiations; insurers got 100 percent of what they wanted, and neither DCBS nor the Democratic leadership was willing to compromise.

 

While the committee vote was a setback for our efforts, we are continuing to work with a strong coalition of provider groups to fight for a fairer way to end balance billing. Stay tuned.

 

Senate committee adopts amendment eliminating damage caps

 

A committee in the Oregon Senate voted along party lines to move the damage cap legislation to the floor. The vote marks the beginning of a high-stakes showdown among some of the most powerful political groups in the building. Democratic leadership has been working to whip the votes they need to move the bill off the floor. Unable to shore up the votes they need to pass the original bill, the committee introduced amendments to limit its scope. Generally, a bill being moved out of committee is a signal that leadership has the votes they need to pass the bill on the floor. However, there remains a contingent within the Democratic caucus that believes the bill goes too far.

 

Policy analysis

 

In the 1980s, the legislature passed the Oregon Tort Reform Act, creating a statutory cap on noneconomic damages. In the 1990s, the Oregon Supreme Court issued several rulings limiting the ability of the legislatively enacted cap to be enforced. In Lakin v. Senco Products, the court ruled the cap violated the constitutional right for a jury to determine the amount awarded for damages. In Hughes v. Peace, the court changed its interpretation by ruling the legislatively created cap could be enforced on causes of action created by the legislature but not those recognized at common law when the constitution was ratified in 1857. Since the Hughes decision, damages have been capped for statutorily created actions but not those allowed by common law.

 

In Horton v. OHSU (2016), the court again changed its interpretation of the constitutionality of the caps. The court ruled the legislature has the constitutional ability to set limitations because it is a legal limit on damages applied generally to a class of cases and not an abolishment of one’s ability to receive an award. The Horton ruling allowed the damages cap to be enforced on all claims.

 

The trial lawyers have been unsuccessful in eliminating the damages cap but are willing to settle for “restoring” to the legal framework existing before the Horton decision. Their association introduced amendments to their bill (SB 487) that would eliminate the cap for all claims except for wrongful death and maintain the wrongful death cap at $500,000. Due to a drafting error, Legislative Counsel would not let their bill move forward and the trial lawyers found an alternative bill (SB 737) to “gut and stuff” the changes to the damages cap. The adopted amendments to the bill follow the same framework as the previous amendment iteration.

 

Proponents of eliminating the cap on noneconomic damages refer to the change as a return to “pre-Horton.” The amendment goes a step further, however, by removing the cap on causes of action the legislature has enacted into law.

 

EXAMPLE: An elderly individual living in an assisted living facility has grounds to sue after falling because of a hazard in the building. The individual passes away from a heart attack, unrelated to the incident, but the suit had not been settled. The next of kin or the estate of the individual has the right to continue the lawsuit under a cause of action granted by state law (ORS 115.305). Previously, the awarded amount would have been limited to $500,000, but the cap would be eliminated and the next of kin or estate would be able to sue for an unlimited sum of money.

 

The decision to eliminate the damage cap on noneconomic damages would create a financial incentive for individuals to file litigation against an entity or person. The unrestricted awards would increase liability insurance rates for businesses and the costs would ultimately be passed down to consumers.

 

Moving forward

 

There is a contingent in the Senate Democratic Caucus skeptical about the amendments. Our arguments against the change are holding their opposition for now. However, the bill is coming at a critical political moment in session. Today marks the first major milestone of session when a majority of bills die. Leadership will likely be willing to trade votes on the legislation for prized legislation that has not made it out of committee. This leveraging can be very powerful in whipping votes on a caucus priority. We are continuing to check in with our allies to make sure they hold firm in their opposition.

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