Bill to ax caps on malpractice damages pits lawyers against doctors, insurers

12 April 2023

A bill sponsored by legislative Democrats aims to do away with a $350,000 cap on certain medical malpractice damages for pain and suffering amid concerns patients have not been properly compensated for devastating, often life-altering medical mistakes. 

But the measure has set up a fight with the state’s doctors and health insurers who say it will worsen the state’s physician shortage by removing protections originally approved by voters nearly two decades ago, potentially spiking insurance costs in the process. 

During a Wednesday hearing of the bill, AB209, sponsored by Assemblywoman Cecelia González (D-Las Vegas), proponents of the measure framed it as a way of bringing accountability to the health care industry by modernizing what they described as “broken and outdated” malpractice laws, including the cap on “noneconomic” malpractice damages that González called a “special protection” for the industry.

“In creating these protections, we gave up our rights,” she said. “We gave up the power of juries to do what’s right in negligent cases. We gave up the time we have to discover and take action and recover damages caused by an unaccountable industry. And we shamefully put a cap on the value of human life.”

For months before the bill’s initial hearing, health care providers, including a group called Your Nevada Doctors, have sought to preempt the proposal through an advertising campaign and website arguing that lifting the cap would drive up liability insurance costs and cause doctors to leave the state, echoing a 2004 campaign in support of a ballot measure that set the cap at $350,000. 

“Outsized judgments drive up the cost of liability insurance for ALL doctors,” the doctors’ website states. “These prices are already rising, and removing these protections WILL cause local doctors to leave Nevada or cease practicing altogether.”

Your Nevada Doctors’ efforts, as in the 2004 battle, have targeted the state’s trial lawyers, who are represented by the Nevada Justice Association and would stand to benefit from potentially greater awards won through jury trials. Ahead of this year’s legislative session, which had been expected to bring forward a fight over the caps, the justice association was among the most prolific campaign donors to state lawmakers.

González argued that even though the 2004 cap was meant to ensure doctors stay in Nevada, the state of care in Nevada is worse nearly 20 years later and insurance rates continue to rise year-over-year.

Caps on medical malpractice damages

AB209 would require health care providers to carry liability insurance of at least $1 million, remove the $350,000 cap on “noneconomic” damages — which can include pain and distress, are separate from economic damages such as lost wages and future medical expenses, and are also referred to as “pain and suffering” damages — and repeal barriers to pursuing a medical malpractice lawsuit.

González criticized the one-year statute of limitations on bringing forth a malpractice suit, which would also be repealed under the bill, instead setting the statute of limitations at two years. She said the existing law limits the time families have to grieve a lost loved one and decide if they want to pursue litigation. She also said that existing malpractice laws create unnecessary hurdles for those seeking justice for substandard health care, including a requirement for victims to obtain an “affidavit of merit” — a statement from a qualified medical expert attesting to the validity of a victim’s claim — to file a lawsuit.

Christian Morris, a personal injury trial attorney based in Henderson and a board member at the Nevada Justice Association who presented the bill alongside González, said the changes proposed by the bill are meant to bring checks and balances to the industry to ensure quality health care is provided.

Several victims also told lawmakers stories of their near-death experiences and ongoing pain and trauma that they attributed to malpractice by medical care providers. That included Doriann Myers, who had a double mastectomy to remove her breast cancer, but only after going to Texas for care found that the surgery did not remove her cancerous tumor. She later developed leukemia linked to chemotherapy she underwent.

“During my time in Texas, my oldest son, Tyler, began to succumb to his disease, and he passed away at the age of 21, while I was going through treatments,” she said. “I had given up so much to care for him, and I wasn’t able to be with him and care for him during the last two years of his life.”

Supporters of the bill also said that the limitations on “pain and suffering” damages mean lower awards for victims who are children and seniors because they would not receive compensation for lost wages.

But the measure faced a wide range of opposition, including from doctors, nurses and business groups such as the Vegas Chamber and Retail Association of Nevada, who collectively raised the alarm that lifting the cap on “pain and suffering” damages could devastate a state facing an acute shortage of health care providers, which already has near-bottom of the nation rankings for health care access and providers per capita.

Tony Alamo, an internal medicine physician and former chair of the Nevada Gaming Commission, pointed to his own decades-long history as doctor in Nevada, saying that prior to the cap set on damages in the early 2000s, he “was moonlighting at urgent cares at night and on weekends to help overcome the malpractice premium increases.”

“This plight caused many doctors to roll up their practices and leave Nevada,” he said, adding that after the cap on damages was established, “the number of frivolous lawsuits decreased, more insurance companies returned back to Nevada, premiums began to normalize in a predictable insurance market — the crisis was over.”

Dozens of physicians and health care providers who testified against the bill said that lifting the cap would lead to skyrocketing insurance claims and costs for liability insurance. Many in opposition also expressed support for other legislative efforts to improve the shortage of providers in the state.

“We cannot afford to get this wrong. We’ve increased our physician numbers in Nevada the last two decades, but the population outpaced us,” Alamo said. “We cannot afford to lose any doctors to leaving [or] early retirement or discourage new grads from coming to Nevada.”

Opponents also argued that with no cap on damages there would be an increased number of malpractice lawsuits, leading to lengthier and costly litigation that would drive up costs for insurance companies, which would push the costs onto doctors through higher premiums.

But supporters of the bill sought to counter some of those arguments by pointing out that most other states have higher caps on these damages than Nevada or no caps at all, and those states have more physicians per capita than Nevada.

Another bill introduced this session, AB404, sponsored by the Assembly Judiciary Committee, would not eliminate the cap on “pain and suffering” damages, but would set it at $2.5 million, with that amount adjusted annually based on the inflation rate. That bill has not been scheduled for a hearing ahead of a Friday deadline for bills to pass out of their first committee.

A 20-year battle

The state’s cap on noneconomic damages dates back to a 2004 referendum, dubbed “Keep Our Doctors in Nevada,” aimed primarily at providing legal protections for doctors and insurers under the argument that a lack of such caps was worsening the state’s physician shortage. That measure was approved by voters by a 19-point margin, following a massive financial push by the health care and insurance industries. 

The referendum came after a 2002 legislative special session amid a medical malpractice crisis in the state that saw liability insurance rates skyrocket, which doctors tied to increasingly large jury awards for malpractice lawsuits. 

Also complicating the situation was the departure of the St. Paul Group of Companies, which held a majority of Nevada’s medical liability insurance market but exited the medical malpractice insurance business in the early 2000s. Those hit hardest by the rising insurance rates included doctors specializing in obstetrics/gynecology, causing 30 OB-GYNs to leave Clark County during that time, according to a letter from the Nevada Hospital Association.

During the hearing, Assemblyman Toby Yurek (R-Henderson) pointed to his own experience more than two decades ago of questioning whether his then-pregnant wife would be able to find  a doctor to deliver their child because of the provider shortage. 

He also underscored the longstanding fight between lawyers and doctors over the caps, noting, “I think that’s the tension in the room.”

In the years since the cap was enacted, the state’s trial lawyers — long among the most prolific contributors to legislative campaigns — have sought to roll back those caps, arguing that they have limited legal accountability for serious medical mistakes, including ones ending in paralyzation or death. 

That push intensified in 2009 in the wake of a severe Hepatitis C outbreak in Las Vegas, in which a single clinic reusing needles exposed more than 50,000 people to the virus. However, a bill proposed that year that would have created a carveout in the $350,000 cap for “gross negligence” failed to clear the Legislature.  

In 2015, the law survived a court challenge when the Nevada Supreme Court ruled that the state’s cap was constitutional. 

At the federal level, Congress has long considered — though not enacted — some variety of medical malpractice caps amid broader pushes from the Republican Party to implement “tort reform,” or limits on laws that allow individuals to sue for damages in civil courts. Most recently, that includes a GOP proposal from 2018, part of the party’s failed plan to repeal and replace the Affordable Care Act that would have capped damages at $250,000. 

Twenty-eight states have adopted some form of malpractice caps, though the size of those caps varies widely. Another 14 states maintain no cap, while nine have made caps unconstitutional.

González pointed to those other states to argue that the caps have no tangible effect on keeping doctors in Nevada, highlighting higher rates of doctors and better health care outcomes in states without damages caps. But she emphasized the bill was not about a fight between doctors and lawyers.

“We’re here today for victims to seek justice,” González said.

The post Bill to ax caps on malpractice damages pits lawyers against doctors, insurers appeared first on The Nevada Independent.

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