Legislature approves cap on noneconomic damages in malpractice lawsuits

A bill capping noneconomic damages in medical malpractice lawsuits is headed for Gov. Kim Reynolds’ desk after passing both chambers of the Iowa Legislature on Wednesday.

House File 161 would cap noneconomic damages in lawsuits against health care providers in medical incidents that result in the loss or impairment of a bodily function, disfigurement or death, at $1 million for clinics and individual doctors, and $2 million for hospitals. Noneconomic damages are awards to compensate for subjective harms caused by the incident, such as pain and suffering.

If approved by the governor as expected, the new limit will accompany Iowa’s existing $250,000 cap on noneconomic damages in cases where patient injuries are not permanent, substantial or fatal.

Rep. Ann Meyer, R-Fort Dodge, said that as a mother who lost a child in a medical incident, she understands the suffering that people go through. While no amount of money will bring back a loved one, setting a liability limit can help health care providers stay open, she said.

“No one goes into the medical field to cause harm, but it happens. Unfortunately, it happened to my family,” Meyer said. But, she added, there are 3.2 million Iowans who deserve care. “As a state, we need to keep the medical system intact.”

The $2 million limit for hospitals was added in an amendment from Meyer, the bill’s floor manager. The bill specifies that recoveries for noneconomic damages shall not exceed $2 million “if the civil action includes a hospital.” That provision suggests that in cases involving both doctors and a hospital, which is often the case, the effective cap on all noneconomic damages would be $2 million rather than $3 million.

Rep. Brian Lohse, R-Bondurant, said the amendment is trying to make “a bad bill better.” He said there were misconceptions that plaintiffs would be able to get noneconomic damage awards from both a doctor and a hospital, and said that the language including hospitals specifically would encourage lawsuits to include hospitals in cases where they wouldn’t otherwise be a part of the case.

“Further, ‘hospital’ doesn’t include by definition nursing homes, surgery centers (and) several other places where, quite frankly, we’ve seen some egregious errors committed by those doctors operating in those places,” Lohse said.

The bill also adds loss of a viable pregnancy to the list of medical incidents that qualify for economic damages.

Two other amendments, which both raised the $250,000 cap to $5 million, did not pass in the House. Lohse and supporters of the action said insurance costs were lower in places with liability caps not because of the dollar amount, but because of the “predictability” it creates in the market. These higher caps would allow that predictability to still exist while giving victims of medical malpractice a higher award.

While no amount of money will bring a loved one back, opponents like Sen. Nate Boulton, D-Des Moines, said that the limits further victimize people who have to contend with the consequences of a medical malpractice incident for the rest of their life. The bill does not help victims or address ways to prevent those events from happening, he said.

“Rather than peeking behind the curtain and actually getting our arms around what’s happening with patient safety and how can we really get better results, you’re telling the victims of horrifying and heartbreaking situations that they are actually the problem,” Boulton said. “Their dead children are the problem. Their dead husbands and wives are the problem.”

But Rep. Norlin Mommsen, R-DeWitt, said that jury awards don’t matter if there aren’t hospitals around to provide health care in the first place.

He said he wanted to err on the side of caution by “giving all of us a chance to get to that hospital to try and get that care. Because if you don’t get there, it doesn’t matter what the limit is.”

GOP dissent

Republicans strengthened their control at the statehouse in the 2022 midterm elections, gaining more seats in the House and a supermajority in the Senate as Reynolds won her second bid for reelection. GOP lawmakers quickly passed the governor’s private school scholarship program into law, a major goal outlined in Reynolds’ Condition of the State address in January.

Reynolds also brought up Iowa’s rural health care shortages in the speech, calling for action in the 2023 legislative session to better support health care providers in underserved areas. In addition to calling for more investment in maternal health services in rural Iowa, which she proposed in an omnibus bill earlier this month, she said setting liability limits will help hospitals keep their doors open.

Unlike Reynolds’ other initiatives, Republicans did not present a unified front on medical malpractice liability limits. Lohse and 10 other Republicans — including Rep. Megan Jones, R-Sioux Rapids and Mark Cisneros, R-Muscatine — voted against the legislation in the House. Five Republicans and every Democrat voted against the bill in the Senate.

Cisneros urged his colleagues to vote against the bill, saying that it was immoral to put a cap on the value of human life. He said some Republicans were going to vote for the bill despite believing it is immoral.

“Why? Because this bill was labeled a priority by leadership,” Cisneros said. “Will you seriously allow yourselves to be bullied into bending your moral compass away from the people of Iowa?”

Misunderstandings about the amendment with the $2 million cap for hospitals arose because Republicans pushed the legislation through in caucus meetings, Senate Minority Leader Zach Wahls said.

“This has been rushed,” Wahls said. “This has been negotiated behind closed doors. And it is Iowa victims who are going to be denied justice as a result of this amendment.”

Supporters of the bill said that while it was a difficult decision to set a number on noneconomic damages, it is a necessary step toward addressing rural health care shortages.

Meyer emphasized that the legislation does not put limits on economic damages or punitive damages. It also does not apply to cases where the defendants’ actions constitute “actual malice,” when they knowingly commit medical malpractice.

“As legislators we are tasked with making a public policy decision to balance the need to compensate people for medical injuries with the need to keep our health care industry stable and intact, especially in rural Iowa,” Meyer said.

Sen. Jason Schultz, R-Schleswig, said the legislation is not an attempt to deprive victims of money, but to address the issue of lawyers taking advantage of the jury system in medical malpractice cases by seeking high awards.

“Nobody wants to be there, except for the guy getting a third,” he said, referring to the share of the damages that often go to the plaintiffs’ lawyers. “Because they advertise for this. They specialize in this. They fly their private jets into the state for this.”

Lawmakers pointed to a lawsuit in which a couple won nearly $98 million in a civil verdict after suing Mercy Hospital in Iowa City after their newborn child suffered permanent brain damage from their health care providers’ use of improper medical techniques. Verdicts like those are making doctors and health care professionals leave the state, Schleswig said.

Reynolds applauded the Legislature for passing the bill Wednesday.

“To the OBGYNs and physicians who have been worried about practicing in Iowa, we are ready for you!” Reynolds said in a statement. “These reforms balance the needs of injured patients with the needs of all Iowans to have a robust health care system.”