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Physicians often report practicing defensive medicine to reduce malpractice risk, including performing expensive but marginally beneficial tests and procedures. Although there is little evidence that malpractice reform affects overall health care spending, it may influence physician behavior for specific conditions involving clinical uncertainty.To examine whether reducing malpractice risk is associated with clinical decisions involving coronary artery disease testing and treatment.Difference-in-differences design, comparing physician-specific changes in coronary artery disease testing and treatment in 9 new-cap states that adopted damage caps between 2003 and 2005 with 20 states without caps. We used the 5% national Medicare fee-for-service random sample between 1999 and 2013. Physicians (n = 75 801; 36 647 in new-cap states) who ordered or performed 2 or more coronary angiographies. Data were analyzed from June 2015 to January 2018.Changes in ischemic evaluation rates for possible coronary artery disease, type of initial evaluation (stress testing or coronary angiography), progression from stress test to angiography, and progression from ischemic evaluation to revascularization (percutaneous coronary intervention or coronary artery bypass grafting).We studied 36 647 physicians in new-cap states and 39 154 physicians in no-cap states. New-cap states had younger populations, more minorities, lower per-capita incomes, fewer physicians per capita, and lower managed care penetration. Following cap adoption, new-cap physicians reduced invasive testing (angiography) as a first diagnostic test compared with control physicians (relative change, −24%; 95% CI, −40% to −7%; P = .005) with an offsetting increase in noninvasive stress testing (7.8%; 95% CI, −3.6% to 19.3%; P = .17), and referred fewer patients for angiography following stress testing (−21%; 95% CI, −40% to −2%; P = .03). New-cap physicians also reduced revascularization rates after ischemic evaluation (−23%; 95% CI, −40% to −4%; P = .02; driven by fewer percutaneous coronary interventions). Changes in overall ischemic evaluation rates were similar for new-cap and control physicians (−0.05%; 95% CI, −8.0% to 7.9%; P = .98).Physicians substantially altered their approach to coronary artery disease testing and follow-up after initial ischemic evaluations following adoption of damage caps. They performed a similar number of ischemic evaluations but conducted fewer initial left heart catheterizations, referred fewer stress-tested patients for left heart catheterizations, and referred fewer patients for revascularization. These findings suggest that physicians tolerate greater clinical uncertainty in coronary artery disease testing and treatment if they face lower malpractice risk.