Missouri Supreme Court Considering Constitutionality of Medical Malpractice Caps, Threaten Malpractice Insurance Rates

Missouri is one of three states where its Supreme Court is considering the constitutionality of non-economic damage caps in medical malpractice cases. The other two states are Florida and Indiana.

On March 27, the Missouri Supreme Court heard oral arguments in a case where a child was stricken with cerebral palsy and brain damage during his birth in 2006. The mother of the child brought a medical malpractice lawsuit against E. Cox Medical Centers. The jury awarded the woman $1.45 million in non-economic damages, and the judge immediately reduced the non-economic damage award to $350,000—in keeping with the state’s cap on non-economic damages, which was signed into law in 2005.

The courtroom battle over the constitutionality of non-economic damage caps has drawn the attention of groups on both sides of the issue. The AFL-CIO and the Missouri Coalition for Quality Care filed friends of the court, amicus briefs in support of the non-economic damage cap challenge. On the other side, the Missouri Chamber of Commerce filed an amicus brief supporting the constitutionality of non-economic damage caps.

Non-economic damage caps are effective legislative tools for lowering the cost of medical malpractice insurance. The caps add predictability to underwriting formulas that hope to surmise the annual amount of claims payments in a given state. If the medical malpractice insurance companies know that the worst non-economic damages they will have to pay in a single case is $350,000, they will not have to keep reserves adequate to cover multi-million-dollar non-economic damage judgments. The ability to keep the funding of reserves down lets the medical malpractice insurance companies lowering the annual premiums its insureds have to pay.

Both the Illinois and Georgia Supreme Courts have deemed there respective non-economic damage cap legislation to be unconstitutional, stating that the arbitrary caps are a violation of its citizenry’s constitutional right to a trial by jury where the jury decides both liability and damages.

If the Missouri Supreme Court does rule the non-economic damage cap unconstitutional, the state’s healthcare workers can expect medical malpractice insurance premiums to rise.