Iowa Senate panel approves $1 million cap on noneconomic damages in medical malpractice cases

As the Iowa Legislature considers tort reform, lawmakers argued over whether state law should respond to individual circumstances or statewide trends when it comes to medical malpractice lawsuits.

The Senate Judiciary Committee recommended passage Wednesday of Senate Study Bill 1063 on a 11-7 vote, just hours after a subcommittee recommended advancing the legislation. The bill would put a $1 million cap on noneconomic damages in lawsuits against health care providers for cases of loss or impairment of a bodily function, disfigurement or death. Noneconomic damages might include awards for pain and suffering, emotional distress, or loss of consortium with a spouse, for example.

Sen. Jason Schultz, R-Schleswig, said medical malpractice lawsuits were driving hospitals out of business and talented doctors out of Iowa. The hospital where his brother and two daughters were born closed, he said, he cited insurance premiums as a reason.

“I don’t know what the west-central Iowa area would do if Denison stopped for financial purposes offering birthing services,” he said. “But we’re looking now to Carroll to Harlan to Ottawa, Storm Lake, Fort Dodge, Sioux City, Council Bluffs. … that’s why these are called ‘nuclear’ verdicts, because the blast area just keeps getting larger and larger, where you end the services because of the increasing premiums.”

But Democrats argued that these limits do not take into account the real harm done to victims of medical malpractice, many of whom are facing with lifelong or fatal consequences from the incident they file a lawsuit over.

Iowa already has a $250,000 limit for other, less severe noneconomic damages, which was passed under former Gov. Terry Branstad in 2017. The 2017 round of medical tort reform also established new standards for who could serve as expert witnesses, requiring expert testifiers be certified in the same or a similar specialty to the defendant medical professional, as well as have actively practiced or been in academia within five years prior to the incident.

The bill establishing this new limit does not change these standards, and does not remove current exceptions to lawsuit payout limits in cases of “actual malice.” It also includes a clarification that in cases where a parent or spouse serves as the primary caregiver for a child or disabled adult, the loss of dependent care resulting from their death or severe injury would qualify as “economic damages” and not be subject to payout limits.

Though private school scholarships have dominated discussions at the Capitol in the starting weeks of the 2023 legislative session, Gov. Kim Reynolds also named medical tort reform as a top priority this session. Tort reform measures for health care providers and commercial trucking companies failed to pass last year.

The governor said in her Condition of the State address that “out of control” medical malpractice lawsuits were driving OB-GYN clinics out of business in Iowa. She highlighted tort reform as one of the ways Republicans hoped to help rural areas struggling with a lack of health care providers, saying the change would help draw health care providers to Iowa.

Sen. Nate Boulton, D-Des Moines, said this perspective on medical malpractice lawsuits ignores the realities those injured in these incidents must live with for the rest of their lives.

Lawmakers heard from individuals and legal representatives of people who have received medical malpractice awards, he said, and these financial limits trivialize the damage done to them and their loved ones by taking the decision out of the hands of a jury of their peers.

“It’s easy to talk about ‘runaway’ verdicts and ‘shock’ verdicts in terms of the things we heard today in the plural sense,” Boulton said. “In the individual sense? Call up one of these cases. Tell them that they were a ‘lawsuit lottery winner.'”

Schultz said advocates on both sides of this issue had an incredible amount of research and data for why damages limits should or should not be put in place for medical malpractice suits. But he also asked his fellow committee members to pick a side.

“I pick rural Iowa, and access and facilities, and the ability for cash flow of several hospitals,” he said.

The Senate legislation was amended at the committee meeting to match a parallel House bill, which will be discussed Thursday by a House Health and Human Services subcommittee.