June 2021 Newsletter

At Risk: Missouri’s liability laws

Missouri’s legislature and courts have long played a back and forth on the ability to enact reasonable limits on noneconomic damages, with current law in jeopardy of again being struck down as the state’s Supreme Court hears arguments on the matter.

At risk is the law enacted in 2015 to enhance patient access to care by limiting noneconomic damages in medical liability cases to $400,000 for non-catastrophic injuries and $700,000 for catastrophic injuries.

An amicus brief filed by the Litigation Center of the American Medical Association and State Medical Societies and the Missouri State Medical Association (MSMA) states in support of current law, “Other states have noneconomic damage limits in the same range as Missouri. These limits are a rational response to a sustained distortion of liability law; they recognize that the broader public good is served when liability remains reasonable and predictable.”

A look back on when prior laws were repealed or ruled unconstitutional reveals just how impactful reasonable damage limits are in recruiting physicians to underserved areas of the state and reining in high liability insurance premiums.

Before initial limits were implemented in 1986, insurance premiums rose dramatically, including 131% in one year alone. When that law was weakened in 2002, surveys found an average 78% rise of individual premiums between 2002 and 2003 and 38% between 2003 and 2004 — causing the departure of some large insurance carriers.

Additional legislative actions were taken in 2005 to remedy the crisis, bringing an influx of physicians — until that law was struck down in 2012. The law under review this year by the state Supreme Court was put in place in 2015 to address the precise concerns the court raised in 2012.

“[This law] was a thoughtful, balanced response to concerns that the high costs and decreasing availability of medical professional liability insurance would hinder the ability of Missourians to access quality and affordable health care,” the AMA Litigation Center and MSMA brief states, in urging the state’s highest court to uphold it for the benefit of patients and physicians alike.

To read more about the risks Missouri patients again face if the liability law is overturned, click here.

New Mexico patients facing improved prospects of access to care

A decision upholding common sense liability laws in the state of New Mexico gives patients reason to be optimistic about the prospect of better access to care.

In a ruling earlier this year, the New Mexico Supreme Court upheld a limit of $600,000 on noneconomic damages (subsequently raised by the legislature to $750,000 and indexed to inflation). It confirmed that such limits do not infringe on a person’s right to a jury trial.

Physicians and health care providers regarded it as a positive development that will help retain and attract medical professionals, especially across the state’s rural communities.

The court concluded that nothing in current law prevented a defendant from seeking a jury trial, stating “the right to a trial by jury is satisfied when evidence is presented to a jury, which then deliberates and returns a verdict based on its factual finding. The legal consequence of that verdict is a matter of law, which the legislature has the authority to shape.”

This confirmed the legislature was within its powers to pass legislation that includes limits on noneconomic damages.

The Litigation Center of the American Medical Association and State Medical Societies, and the New Mexico Medical Society, actively supported the current law. In their amicus brief to the court, they stated, “New Mexico’s legislature crafted a unique system that prioritizes and protects the ability of those who are injured by negligent medical care to be fully compensated for their past and future medical expenses while limiting other forms of damages such as subjective pain and suffering awards.”

Until legislation is passed at the federal level, a patchwork of laws across states and threats to long-established limits on noneconomic damages will continue to threaten affordable access to patient care.

To read more about how liability laws were upheld in New Mexico, click here.

Insurers seeing post-pandemic impact to liability rates

Insights into the medical professional liability (MPL) market show that COVID-19 is creating further challenges for insurers and physicians — who were already facing higher costs before 2020.

Now, increased uncertainty around liability lawsuits that stem from COVID-19 has prompted an acceleration of “market hardening” as carriers evaluate pricing and, in some cases, exit the market.

MPL insurers are expressing concerns about a wave of COVID-19 related claims over the next two years, as state statutes of limitations draw closer and executive orders issued during the pandemic are challenged. While the public largely regarded health care providers as frontline heroes during the pandemic, those feelings are likely to fade from memory in the months and years ahead.

The post-pandemic impact comes after several years of rising indemnity payments, a hardening market and unfriendly judicial climates in many states.

“Health care professionals will continue to face many threats in the coming months and even years, including the specter of medical liability lawsuits stemming from care already provided and treatments and care delayed. Courts have been closed and are only now opening in some jurisdictions,” said Brian Atchinson, CEO of the MPL Association, a leading member of the HCLA.

Atchinson urged support for targeted federal liability protections for our frontline health professionals, including H.R. 3021, the Coronavirus Provider Protection Act, to mitigate the threat of lawsuits.

To read more about the drivers of higher MPL insurance costs and the anticipated impact of COVID-19 lawsuits, if not mitigated by federal legislation, click here.