WASHINGTON (Legal Newsline)--The nonpartisan Congressional Budget Office says it stands by its analysis that medial malpractice limits would save American taxpayers billions of dollars.

As Congress debates a national health care overhaul, the Congressional Budget Office director, Douglas Elmendorf, said as much as $54 billion could be saved over the next 10 years if Congress enacts legal reforms including a $250,000 cap on damages for pain and suffering and a $500,000 cap on punitive damages and restricting the statute of limitations on malpractice claims.

Republicans, who have long called for legal reforms to help cut skyrocketing health care costs, used the CBO estimate as a rallying call for limits on medical malpractice lawsuits.

But Democrats, who largely back President Barack Obama's effort to change how U.S. health insurance companies do business, balked at the CBO's estimate.

In a letter this week to U.S. Sen. Jay Rockefeller IV, D-W. Va., the CBO stood by its analysis.

"CBO's latest assessment of the effects of tort reform on spending for health care draws on a considerable amount of analysis that the agency has undertaken during the past several years and a stream of recent research studies that have used a variety of data and empirical techniques," the letter by Elmendorf said.

He noted that the CBO "periodically updates" its estimates of the effect of tort reform on malpractice costs as new data become available.

"CBO currently estimates that the nation's direct costs for medical malpractice-which consist of malpractice insurance premiums and settlements, awards, and administrative costs not covered by insurance-would be reduced by about 10 percent (relative to the amounts under current law) if the common package of tort reforms was implemented nationwide," Elmendorf said. "CBO's previous estimate was that tort reform would lower malpractice costs nationwide by about 6 percent."

Neither the House nor Senate health care proposals have in them legal reforms such as limits on damages, which has drawn fierce criticism from Republicans and business groups.

The House passed its $1 trillion health care overhaul last month, while the Senate this month voted to begin debate on its $848 billion plan, drafted by Majority Leader Harry Reid, D-Nev.

The expansive House-approved plan championed by House Speaker Nancy Pelosi, D-Calif., and the Senate health care bill will be merged in conference committee before a final bill goes to Obama, who has made health care reform the cornerstone of his domestic policy agenda.

From Legal Newsline: Reach staff reporter Chris Rizo at chrisrizo@legalnewsline.com.