This is from the same Nation Journal article I cited earlier, but forgot to give credit to:

The costs of defensive medicine are hard to pin down because it's difficult to quantify what tests were ordered for what reasons. In 2003, the Department of Health and Human Services pegged it as high as $126 billion per year, including $56.2 billion paid by federal programs, but a 2008 study from the Health Research Institute at PricewaterhouseCoopers put the cost at a whopping $210 billion. However, those estimates were derived from a 1996 Stanford study that both CBO and the General Accounting Office later questioned because of its small sample size; when attempting to expand the study, CBO "found no evidence that restrictions on tort liability reduce medical spending."

Some contend, however, that defensive medicine won't be solved by tort reform. Sid Shapiro, a law professor at Wake Forest University, said the tort issue is overblown and that the extra testing may be mostly the result of the fee-for-service system that gives doctors incentives for more tests.

"It's really hard to sort out whether [doctors] are ordering tests as defensive medicine or to make money," Shapiro said. "Or there's the third possibility that they're just being doctors. In the best of all worlds, wouldn't we want our doctors to look at us and say, 'There's a 1 percent chance this is serious, but I want to rule that out'?"