Managing Your Practice

States aim to repeal, raise malpractice caps


 

Caps on noneconomic damages in medical malpractice cases are coming under fire by courts, legislators, and trial attorneys in a number of states.

In March, the Florida Supreme Court struck down the state’s $1 million cap on noneconomic damages.

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Close to 30 states limit award damages in medical malpractice cases.

Meanwhile, a proposed ballot measure in California aims to quadruple that state’s $250,000 cap. And Missouri doctors are pushing to reinstate their state’s noneconomic damages cap after a court overturned the $350,000 limit in 2012.

"The courts have always swung back and forth in some states [on upholding caps], and that probably won’t change," said William Encinosa, Ph.D., a senior economist for the Center for Delivery, Organization and Markets at the Agency for Healthcare Research and Quality (AHRQ). "However, on the legislative side, as more states reform their Medicaid, they may be willing to pass caps to contain costs."

Close to 30 states limit award damages in medical malpractice cases; however, cap amounts and their application vary. For example, Texas caps pain and suffering at $250,000, while Nebraska has a $1.75 million limit on total damages. At least 16 state courts have upheld a noneconomic or total damages cap as constitutional, according to American Medical Association data. Judges in at least 12 states however, have overturned caps.

Florida physicians were disappointed to lose the wrongful death damages cap, said Jeff Scott, director for legal and government affairs for the Florida Medical Association. Since its enactment, the cap helped stabilize premiums in Florida and has supported the return of a number of liability insurers returning to the state, he said.

"We thought [the opinion] was fully reasoned and fully decided," Mr. Scott said in an interview. "It was unfortunate. Our Supreme Court has been on a roll of striking down good tort reform legislation and this wasn’t a very big surprise."

The Missouri Supreme Court ruled similarly in July 2012 when it threw out the state’s noneconomic damages cap. A doctor-backed bill that would restore the $350,000 limit passed the Missouri House in March. The state Senate discussed the proposed law in April, but had not reached an agreement by this article’s deadline.

California physicians also are defending the damages cap law in their state – the Medical Injury Compensation Reform Act (MICRA). The law has survived numerous legal challenges, but now faces a proposed ballot initiative that would significantly elevate the cap. California plaintiffs’ attorneys and other MICRA critics are advocating a ballot measure that would increase the noneconomic damage award to roughly $1 million. Trial attorneys filed signatures with county registrars in March to qualify the measure for the November ballot.

"The proposed ballot measure would increase costs for everyone in California," California Medical Association President Dr. Richard Thorp said in a statement. "This initiative would take money directly out of the health care delivery system and put it straight into the pockets of trial attorneys. That’s why such a broad coalition, including doctors, nurses, hospitals, community clinics, dentists, labor, local government and hundreds of others are all in opposition."

Kansas physicians, meanwhile, are applauding a new law that raises Kansas’ damages cap, but keeps it intact. The Kansas Supreme Court upheld the state’s $250,000 medical malpractice noneconomic damages limit in 2012, but the opinion warned the Legislature should raise the cap or face a likely reversal in the future, said Rachelle Colombo, director of government affairs for the Kansas Medical Society. To prevent this from happening, KMS led the creation of SB 311, a law that would gradually increase the cap to $350,000 over an 8-year span. The law was signed by Gov. Sam Brownback (R) on April 18.

"We’re thrilled," Ms. Colombo said in an interview. "It is very significant and provides stability for physicians in Kansas for decades to come. [The cap] has been the cornerstone of our positive malpractice environment. It has allowed for premiums to significantly decrease and we’ve seen physicians who have crossed over state lines to practice in Kansas."

Studies evaluating malpractice damages caps have found varying degrees of impact. A 2007 metaanalysis of more than 20 studies found nearly all rigorous, empirical studies conducted since 1990 have found that malpractice premiums are lower in the presence of damages caps (Milbank Q. 2007;85:259-86). A 2003 study by AHRQ researchers found that states with noneconomic damages caps had 12% more physicians per capita than did those without; however, states with relatively high caps were less likely to experience the same effect on physician supply.

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