Medical liability reform is a high state legislative priority for the AMA. Not surprisingly, then, it is also a high priority for the Litigation Center for the American Medical Association and State Medical Societies.
Evidence of this is the Litigation Center’s involvement in five active tort reform-related cases before the state Supreme Courts of Kentucky, Michigan, Nevada, Oregon and Texas.
And evidence of the Litigation Center’s success is the recent Wisconsin state Supreme Court 5–2 ruling that the state’s $750,000 cap on awards for noneconomic damages did not violate the state constitution.
The Wisconsin cap on noneconomic damages is one component of a three-part strategy that has stabilized the state’s medical liability environment. The three elements are:
A requirement for most physicians to carry $1 million in liability coverage per occurrence and $3 million in aggregate.
The Wisconsin Injured Patients and Families Compensation Fund, which is financed via assessments (based on actuarial risk) charged to physicians, clinics, hospitals and other participants and covers all damages above the primary insurance limits.
The $750,000 cap on noneconomic damages.
Many caps, few guarantees
Wisconsin and 30 other states have a cap on noneconomic damages. But the Dairy State is one of just a few that guarantee full recovery of economic damages awarded by a jury, such as past and future medical expenses and lost wages, according to the Wisconsin Medical Society (WMS).
The recent ruling stems from a case, Mayo v. Wisconsin Injured Patients and Families Compensation Fund, involving the injuries incurred by Ascaris Mayo, a woman who visited two separate hospital emergency departments within two days and ultimately suffered organ failure plus gangrene in all of her limbs, which had to be amputated.
A jury ruled that neither the emergency physician nor the physician assistant who treated her were negligent, but that both failed to provide proper informed consent on diagnosis and treatment options. The patient was awarded $15 million in noneconomic damages. Defendants, including the compensation fund, moved to have the award reduced to match the cap.
Fate of noneconomic damage cap in hands of top state court
The trial court denied the motion, ruling that—while the cap was constitutional—it was unconstitutional as it applied to this case. The WMS and the Litigation Center first filed an amicus brief arguing against that opinion and urging the state Supreme Court to review the case. Then they filed a second brief that argued in favor of preserving the caps.
The brief notes that Ascaris Mayo had received more than $8.8 million for past and future medical expenses plus future-wage loss. Had her injuries occurred in another state or had been the result of a car accident, “there is no guarantee that she would receive compensation sufficient to pay her past medical expenses,” the brief says.
In ruling the way it did, the state Supreme Court overturned the appellate court decision as well as a 2005 decision that had declared a previous cap unconstitutional. The court declared that the 2005 decision “erroneously invaded the province of the legislature and applied an erroneous standard of review.”
After the 2005 decision, the legislature convened a Medical Malpractice Task Force charged with suggesting needed reforms. Those suggestions were then incorporated into legislation drafted by a bipartisan committee.
“The task force found that noneconomic damages are an aspect of recovery that often is based on emotion and not on any predictable standard,” wrote Chief Justice Patience D. Roggensack.
“The Court clearly understands the importance of the cap to our state’s unique and comprehensive medical liability system—a system that provides unparalleled benefits to both patients and physicians,” said WMS President Molli Rolli, MD.
Cap controversies, cases continue
In another case involving noneconomic damages caps, the Oregon Supreme Court announced this past March that it would review a decision to invalidate the state’s $500,000 cap for a case involving a man injured in a hay-baling accident who successfully sued for almost $4.9 million the manufacturer of the machine he was using.
The Litigation Center and the Oregon Medical Society submitted an amicus brief arguing that the cap is constitutional. Oral arguments will be heard Sept. 14.