GOP lawmakers champion bill to cap medical malpractice damages. What that means for Iowans

Patients with the most severe claims of medical malpractice would receive a maximum of $1 million in noneconomic damages under a bill moving quickly through the Iowa Senate.

Senate Study Bill 1063 would limit the amount of noneconomic damages an Iowa patient could claim if medical error led to substantial loss of a bodily function, disfigurement or death. In those most extreme cases, plaintiffs could receive no more than $1 million to compensate their pain, suffering or emotional distress.

Sen. Jason Schultz said the bill is meant to protect vulnerable Iowa hospitals from being shut down by lawsuits.

"I have the Denison (hospital) CEO telling me that their No. 1 issue, the thing that keeps her up at night, is fearing that the next day she gets a notice of a lawsuit that exceeds their ability to buy insurance,”  said Schultz, R-Schleswig.

Under Iowa law, most noneconomic damages that can be claimed in a medical malpractice lawsuit — which is compensation for pain and suffering separate from financial losses — are already capped at $250,000.

However, the cap does not apply if a jury determines the case involves substantial or permanent loss of body function, substantial disfigurement or death. There’s also an exception if the jury determines the defendant acted with malice.

The bill includes an annual 2.1% increase to the caps to adjust for inflation.

Introducing more limits on noneconomic damages is a top priority for Gov. Kim Reynolds, who highlighted the issue in her Condition of the State speech.

"This is the year that we must enact common-sense tort reform to stop the out-of-control verdicts that are driving our OB-GYN clinics out of business and medical school graduates out of state," she said.

Much like the governor's private school scholarship proposal, the bill on medical malpractice caps appears poised to move quickly through the Legislature. The Iowa Senate moved the bill through a subcommittee and committee on Wednesday, and the House advanced a matching proposal through a subcommittee on Thursday.

How large jury verdicts helped spur GOP to act

Republicans’ latest proposal to limit medical malpractice awards comes on the heels of high-paying lawsuits in recent years, including a likely record-breaking verdict awarded last year.

A Johnson County jury awarded $97.4 million last March to the parents of a young boy who was severely brain-damaged during birth. The medical clinic on the hook for most of that award later filed bankruptcy.

The most recent data from the Iowa Insurance Division shows there were more than 500 claims handled by medical malpractice insurance companies in 2021 for alleged misdiagnoses and treatment, delays in diagnoses and inappropriate surgical treatment, among a variety of other malpractice claims.

The 192 claims “closed” by insurers in 2021 totaled nearly $35 million. Of those, about a dozen claims had a total loss of at least $1 million, with the largest paid loss exceeding $4.5 million, the report states.

The current $250,000 cap was established in a 2017 law signed by then-Gov. Branstad. Since then, Iowa Republicans have proposed — but repeatedly failed to pass — additional limits on noneconomic damage awards.

Supporters say bill would attract medical workforce

Sandra Conlin, a lobbyist for the Iowa Hospital Association, was a primary proponent of the bill in a Wednesday morning subcommittee meeting. She argued that hefty jury verdicts in Iowa have led to higher insurance premiums for healthcare companies, stretching already thin budgets for rural providers.

"We are in a place of crisis right now," Conlin said. "There's been inaction on this issue for several years in a row, and we continue to see the consequences of that buildup over time."

The Medical Liability Monitor, a specialty publication focused on malpractice insurance, reported that Iowa had the fifth-lowest medical malpractice insurance rates in the country. But Conlin said those figures don't account for the state's "liability environment," which may increase the amount charged to an Iowa hospital or physician.

Healthcare providers said a cap on noneconomic damages would also help keep doctors working in Iowa. Dr. Shannon Leveridge, a Davenport obstetrician, said OB-GYN practices were struggling to fill open positions in Eastern Iowa.

She blames the looming threat of an uncapped lawsuit.

"I just cannot overstate how much this is affecting our workforce, and that turns into effects for the women and the children, the babies, in our state," Leveridge said. "In order to keep these women and their babies safe, we need doctors."

Mikayla Brockmeyer, a third-year medical student at Des Moines University, said medical liability reform is a major consideration for her and many of her peers as they decide where to practice.

"This is a physician safety issue, an economic impact issue, a regional hospital issue. All of these appeal to the future physicians of Iowa, and they are looking for other states to train if you do not pass this this year," Brockmeyer said. "We need medical liability reform now. Don't let this slip away along with the doctors in training who are considering other opportunities in other states."

The dangers of capping damages to patients

Sen. Mark Lofgren, a Republican, wears a bright green bracelet to honor his grandson, Louden, who passed away in 2021. The Lofgren family is suing ENT Medical Services in Iowa City over Louden's death, although Sen. Lofgren said their case would not be affected by the proposed bill.

"These are victims," he said of people pursuing medical malpractice lawsuits. "These are victims that are recovering from what happened to them or a family member. … It's a hard situation."

Lofgren urged his colleagues to oppose limiting noneconomic damages for victims of medical malpractice. In an interview with the Des Moines Register, he recounted the many hurdles that patients and their families already face when they bring a medical malpractice lawsuit — something he's had to learn first-hand.

"You just don't snap your fingers and do a lawsuit," he said. "It's very, very involved."

Lofgren was one of several Republicans to speak out against the proposal. Sam Clovis is a former Republican candidate for U.S. Senate who became a paraplegic because of an undiagnosed spinal cord abscess. He is suing UnityPoint Health and several providers in northwest Iowa.

"We have legislators who think they are smarter than the people sitting in the jury box," Clovis said. "They want a one-size-fits-all solution."

Dr. Joy Trueblood was on the defendant in a $12 million malpractice lawsuit in 2017, after a central Iowa man wrongfully underwent prostate cancer surgery — despite the fact he never had prostate cancer.

Trueblood opposed the proposal to cap damages. She said the insurance company refused to settle and forced her into the expensive trial.

"Patients and lawsuits are not the problem in Iowa," Trueblood said. "The problem is the medical malpractice insurance industry. They are not managing their risk properly, and they are not protecting the doctors they insure."

Other opponents of the legislation, including many lawyers, argued that capping damage would harm patients who experienced rare, egregious medical errors.

Chip Baltimore, a lobbyist for Trial Lawyers for Justice and a former Republican lawmaker, argued the $97 million payout in Johnson County was reasonable, given the circumstances of the case.

"They don't want to talk about the actual damages that are caused by medical negligence," Baltimore said. "So you don't hear about the fact that, of the $50 million of economic damages … most of that is going to go to the 24/7 care for this child for the rest of his life."

Noneconomic damages, he argued, compensate the family for depriving their child of "a meaningful life, a healthy life, a normal life that all of us take for granted."

Katie Akin is a politics reporter for the Register. Reach her at kakin@registermedia.com or at 410-340-3440. Follow her on Twitter at @katie_akin

This article originally appeared on Des Moines Register: Malpractice limits, a Kim Reynolds priority bill, advance in Iowa Senate