The Hospital-Medical Liability Act instituted many reforms, including limits on the total amount a plaintiff can recover and the total amount for which a qualified healthcare provider can be held liable. It also created the stateâ€™s Excess Liability Fund, a state-run mechanism that allows Nebraska healthcare providers to pool their malpractice liability risk in order to better withstand large judgments. The Act also instituted medical review panels to examine claims and determine their merit, but plaintiffs are allowed to waive this review and file directly in court.
Under the Hospital-Medical Liability Act, physicians must carry medical liability insurance that gives them coverage for limits of $500,000/$1million. They are also eligible for liability coverage under Nebraskaâ€™s Excess Liability Fund. The liability of a participating physician is limited to the extent of the physicianâ€™s basic insurance coverage ($500,000/$1 million), with the Fund covering the excess judgment up to $1.75 million, and recoverable damages for patients are likewise limited to $1.75 million. Patients and providers can opt out of the Act by writing to the state insurance director; otherwise, they are governed by its rules. If the patient has opted out or the physician does not qualify under the Act, then there is no limit of liability.
Nebraska is one of only seven states with a liability funding mechanism run by the state government to provide medical malpractice coverage in excess of the primary insurance requirements of its healthcare providers. Managed by the stateâ€™s insurance director, the Excess Liability Fund is financed by an annual surcharge that may not exceed 50 percent of the physicianâ€™s basic malpractice insurance premium. An additional special surcharge may be levied if the Fund is inadequately funded to pay in full all claims.
Nebraskaâ€™s cap on total damages survived a federal court challenge last year when the United States Supreme Court declined to hear the case of a Nebraska mother of a brain-damaged infant to overturn an Eighth Circuit decision upholding the reduction of her $17 million jury verdict to $1.75 million per the stateâ€™s cap on total damages in medical professional liability cases, a move she argued was unconstitutional.