State lawmakers appeared Tuesday to have reached a compromise meant to ease New Jersey's malpractice insurance crisis and prevent more doctors from closing their doors because of skyrocketing premiums.

The deal was worked out Tuesday in a private meeting as more than 4,000 doctors rallied in front of the Statehouse in a cold, steady rain, chanting, "Tort reform now!"

The rally marked the second day of a work slowdown in which many doctors have withheld non-urgent care to protest skyrocketing malpractice insurance premiums.

The compromise would likely set a $300,000 limit on pain-and-suffering damages paid by malpractice insurers, said Sen. Joseph R. Vitale, co-chair of the Senate Health, Human Services and Senior Citizens Committee.

Extra money to pay larger malpractice awards and settlements would come from a new catastrophic trust fund. The fund would be built from an annual surcharge on health insurers of $2 to $3 for each person they cover, plus fees amounting to $15 a year for each New Jersey doctor and lawyer.

"It's just a matter of working out the details," Vitale said. He said a bill could be ready by next week for a vote.

Lawmakers said the deal must still be discussed with Gov. James E. McGreevey and officials with the Medical Society of New Jersey, which represents more than one-third of New Jersey's 22,000 doctors.

Medical society spokesman John Shaffer said the compromise would drain money from the health-care system by surcharging insurers and doctors, and could lead to more malpractice suits going to trial. Plaintiffs often settle cases for the amount of the doctor's policy limit, generally $1 million or $2 million.

"We're encouraged that there is some talk on physician liability (but this) isn't the way to go," Shaffer said.

He said doctors who had decided to stay out of their offices for several days likely will still do so, and protests are still scheduled for Wednesday.

An American Medical Association study has identified 12 states in crises over medical malpractice: Florida, Georgia, Mississippi, Nevada, New Jersey, New York, Ohio, Oregon, Pennsylvania, Texas, Washington and West Virginia. Doctors have also rallied in some of those states.

In Florida, a task force appointed by Gov. Jeb Bush to examine medical malpractice insurance was expected to recommend the state impose a $250,000 cap on punitive damages, similar to the New Jersey proposal.