President Barack Obama's fiscal 2012 budget proposal includes $250 million in grants over the next three years to fund state efforts to overhaul their medical liability laws.

Obama cited the issue during his State of the Union address as one he’d be willing to work on with Republicans. While Republicans in the U.S. House of Representatives are pushing legislation that would cap non-economic damages, the grants proposed in the president’s budget suggest reforms such as health courts, early disclosure protocols and safe harbors for providers who meet clinical guidelines.

The grants would be administered by the U.S. Justice Department in consultation with HHS, with $100 million disbursed in fiscal 2012 and $50 million in each of the subsequent three years. According to the Justice Department’s budget outline, the grants are intended to fuel reforms that “fairly compensate patients who are harmed by negligence, reduce providers’ insurance premiums, weed out frivolous lawsuits, improve the quality of healthcare, and reduce medical costs associated with defensive medicine.”

They build upon $25 million in grants HHS awarded in June through the Agency for HealthCare Research and Quality safety and medical liability demonstration projects by states and health systems.

In a written statement, Dr. Cecil Wilson, president of the American Medical Association, described testing the ideas targeted by the grants as “an important way to augment efforts to enact the proven reforms” in the House legislation.