Who benefits from medical malpractice caps
MARY ANN DUTTON
The Third Circuit State Court of Appeals recently challenged the $500,000 cap Louisiana put on medical malpractice damage awards in 1975. The Court said the cap violates the state constitution by robbing patients of their right to an adequate legal solution for their injuries.
Sulphur Attorney Oliver Jackson Schrumpf spoke to the Sulphur Kiwanis Club yesterday about the 1975 instituted cap and how it affects Louisianians.
Initially the Legislature established the $500,000 cap to control rising health care costs and to ensure that affordable malpractice insurance was available to physicians.
In the same law it called for a state board to review medical malpractice claims before lawsuits based on the claims can be brought to court.
The law also set up a system where doctors who are part of a Patient Compensation Fund are only responsible for paying the first $100,000 of a malpractice judgment and the other $400,000 of the maximum cap is paid by the fund.
Schrumpf said health care costs have continued to rise over the last 30 years. Doctors who have multiple medical malpractice complaints pay the higher insurance rates. Complaints are reviewed by a board of review and many never go to court.
“The medical malpractice law was passed 31 years ago,” Schrumpf said. “There has never been any adjustment to the law in those 31 years, not even for inflation. A $500,000 award would be worth about $160,000 today. In order to provide the same protection as it did 31 years ago, the cap would have to be raised to $1.7 million just to accommodate the rate of inflation.”
According to Schrumpf, the average medical malpractice case can run 5 to 12 years before it’s over. Attorney’s fees are usually 40 to 45 percent of the judgment. Expenses range between $50,000 and $75,000. That leaves the victim with $250,000 of a $500,000 settlement.
Schrumpf said one of the problems with the cap is that for most malpractice cases, $500,000 is not nearly enough to meet the needs of severely hurt patients or support families when those patients die.
“The law limits the amounts malpractice victims can collect for their injuries, but it puts no limit on what doctors can be charged for malpractice insurance,” he said. “The original idea of the law was to reduce malpractice insurance premiums, and all it did was reduce what the person could recover and not protect the doctors at all.”
During the court case, an affidavit by the director of the state Board Of Medical Examiners said the number of doctors in Louisiana has risen every year for four decades.
It was also noted during that same case that the activity rate of medical malpractice cases in the states with caps is the same as in states without caps.
Schrumpf discussed how insurance companies hide profits by the way they report claims. Apparently insurance companies report claims as paid or incurred. The incurred claims are broken down into three categories-reported claims, past claims, and present claims. Schrumpf said that by shuffling money around in those accounts or categories, insurance companies show on paper a loss when in actuality they’ve made a profit.
“Malpractice rates are going to go up regardless of who wins the lawsuit,” Schrumpf said.
Schrumpf believes the next thing voters will see is an attempt to keep the cap by making it a part of the state Constitution.
He asked Kiwanians to answer his call to action by standing up for the Constitution by voting against a proposed amendment to keep the medical malpractice caps. If we do we will help those who can’t buy justice and can’t afford lobbyists.