AUGUSTA — A national effort to dramatically change how medical malpractice claims are resolved reached the Legislature on Tuesday, reigniting a longstanding debate over whether doctors practice defensive medicine and whether injured patients can successfully claim damages.

The proposal is one of six currently under consideration in state legislatures and advanced by the organization Patients for Fair Compensation, a Georgia-based nonprofit founded by Richard Jackson, CEO of one of the largest health care companies in the country. Rep. Deborah Sanderson, R-Chelsea, the bill’s lead sponsor, said the proposal could lower health care costs, improve outcomes and ensure that patients filing smaller malpractice claims have a better chance at compensation for their injuries.

Those assertions were directly refuted by a number of influential organizations that stand to lose out under the proposal, including the Maine Medical Association, which represents the state’s physicians, the Maine Trial Lawyers Association and the Medical Mutual Insurance Co. of Maine, which handles most of the medical negligence claims in the state.

The bill would replace the current court-based and insurance claims resolution system with a new state agency, the Office of Medical Review. The agency’s board would be composed of a panel of physicians who would review and adjudicate malpractice claims. This change would dramatically reduce the need for courts – and thereby attorneys – to settle claims. Additionally, the physician fees that currently fund the mutual-insurance agency would be redirected to the new agency to cover administrative costs and pay claims.

Wayne Oliver, with Patients for Fair Compensation, compared the proposal to the state’s workers’ compensation system. He said the current malpractice system drives up health care costs because doctors practice defensive medicine – ordering tests, referrals or prescriptions to guard against a malpractice claim. Oliver said the practice results in a $3.9 billion increase in Maine health care costs.

“Doctors will do anything, virtually anything, to avoid being sued,” he said. “They do these counterintuitive things because they don’t want to play in that space we call the medical malpractice litigation system.”

BOOST FOR PUBLIC HEALTH DISPUTED

Oliver also cited a 2013 Vanderbilt University survey of malpractice attorneys that found many of them reject malpractice claims unless there’s a prospect of a large settlement. The study found that less than 20 percent of all injured patients receive any compensation whatsoever.

“Not only are we creating a costly system, we’re not taking care of the people who have been legitimately injured,” Oliver said.

Oliver’s claims were sharply disputed by the Maine Medical Association and other opponents.

“This is a radical change that does not, in any way, advance the health of the public,” said Gordon Smith, an attorney representing the medical association.

During the public hearing before the Legislature’s Judiciary Committee, Smith told lawmakers that the proposal may be well-intentioned, “but to sell this proposal on the basis that its enactment will eliminate or even reduce defensive medicine takes a huge leap of faith.”

Smith said the bill would upend a system that’s currently working and holding down malpractice premiums compared with other states.

Medical Mutual Insurance Co. was established in 1978 and covers 3,000 physicians and 29 hospitals in the state. It settles malpractice claims before they go to court. According to data provided by Mary-Elizabeth Knox, the company’s vice president, it paid roughly $14 million in claims from 2005 to 2015. Last year it paid 23 claims totaling $487,515.

MALPRACTICE PAYMENTS ON DECLINE

The National Practitioner Data Bank collects aggregate data of malpractice payments and actions against doctors. Maine’s rate of malpractice payments was relatively steady from 2004 to 2014, ranging between 43 and 53, respectively. Nationally, the number of malpractice payments has tracked downward, from 17,889 in 2004 to 11,922 in 2014.

Proponents of the bill, L.D. 1311, argued that the data support the findings in the Vanderbilt study – that injured patients aren’t being compensated because attorneys make a financial calculation to reject their case. The study cited an American Bar Association estimate that the cost of prosecuting a single case of medical malpractice ranges from a low of $50,000 to a high of $500,000.

“Because of the high cost of medical malpractice investigation and litigation, contingency fee attorneys, who bring the majority of medical malpractice claims, cannot economically justify taking cases that lack sufficient damages to warrant the litigation expense,” the Vanderbilt study found.

Smith said the new system proposed in L.D. 1311 isn’t right for Maine, where the malpractice claims system is working after decades of reform.

“A lot of the testimony that you heard would have been appropriate about 30 years ago,” said Smith, who added that claims are processed quickly and fairly in Maine.

Lawmakers on the Judiciary Committee will hold work sessions on the proposal before sending it to the full Legislature.