Punitive Damages in Medical Malpractice
Compensatory damages in medical liability cases are designed to reimburse a plaintiff for sustained financial losses and for losses not monetary in nature, such as pain and suffering, disfigurement, or loss of consortium. Punitive damages may be awarded in certain cases. These awards are not based on injuries sustained but are a way to punish the defendant for intentional egregious conduct or gross negligence, and they allow the court to set an example to discourage others from repeating the act. It is uncommon to see punitive damages in medical malpractice cases, but it is not unprecedented.
Forty-three states plus the District of Columbia allow punitive damages in medical malpractice actions. Five states specifically prohibit punitive damages in all civil actions, and Illinois and Oregon prohibit punitive damages in medical malpractice actions.
Half the states that permit punitive damages in malpractice cases have placed limits on the amount of damages that can be awarded. Some states limit punitive damage awards to a specific sum, and some limit them to multiples of the compensatory damage award as a cap. Some states link the amount to a percentage of the defendant’s finances. Legislation introduced in the last few years has mainly attempted to set or change damage limits. Some state laws prohibit insurance companies from covering punitive damages.
Before a jury considers imposing punitive damages, a plaintiff must meet that state’s degree of burden of persuasion. This varies from “a preponderance of evidence standard” to “clear and convincing evidence.” Colorado applies the criminal law standard of “beyond a reasonable doubt.” The severity of the “wanton or willful and intentional conduct” or “indifferent act” deserving punitive damages often includes fraud, misrepresentation of the truth, and concealment of a major fact, malice, or unreasonable risk to others.
When President Clinton proposed the National Health Act in 1993, the AMA complained that the plan failed to cap punitive damages. Today, the topic remains current, as hospitals, physicians, drug manufacturers, and insurance companies continue to actively lobby to restrict punitive damages in malpractice cases. In May of this year, a Clark County District Court jury in Nevada awarded punitive damages of $500 million in a medical malpractice case against two drug companies stemming from a hepatitis C outbreak. This decision will be appealed. The U.S. Supreme Court has made a series of decisions governing punitive damages over the last 14 years. In late October, the justices again heard arguments in Philip Morris USA v. Williams.
Learn more about medical liability reform in our Knowledge Center. Visit us at www.thedoctors.com/knowledgecenter, and select Medical Liability Reform Resources in the Political Advocacy section.
Federal Activity
Language to protect physicians and hospitals that comply with new practice guidelines and medical standards from new litigation exposure had been added to the House version of the national health care bill. The Senate version, which was signed, did not contain this language. The Doctors Company continues to encourage House Energy and Commerce Committee Chairman Henry Waxman (D-CA) to introduce a bill that would correct the omission.
HR 1745 (Tim Murphy, R-PA), as introduced in September to amend the Public Health Service Act, includes insurance and liability protections under the Federal Tort Claims Act for doctors volunteering in community health centers. The House passed the bill 417–1, and prospects for Senate passage remain high.
State Issues
The California State Supreme Court upheld MICRA’s arbitration provisions in Ruiz v. Podolsky, 50 Cal. 4th 838 (2010). The court stated that an arbitration agreement between a physician and patient is binding on the spouse and heirs of the patient.
Briefs have been submitted to the state supreme court in Howell v. Hamilton Meats, 179 Cal. App. 4th 686 (2009), the personal injury case in which the appeals court ruled that the appropriate measure of medical costs were the costs billed rather than those actually paid on the plaintiff’s behalf. A decision is expected this year.
AB 542 (Mike Feuer-D) relates to MediCal nonpayment for hospital-acquired conditions or so-called “never events.” The Doctors Company obtained an amendment for this bill so it would state that payment guidelines would not be substituted for the standard of care or used to determine liability. Governor Arnold Schwarzenegger vetoed the bill on September 30.
In Florida, HB 7217 (Bryan Nelson-R) was signed by Governor Charlie Crist (R) and became law immediately. This measure reverses the “sunset clause” and continues, for three years, to allow medical liability insurers to be exempt from contributions to the Florida Hurricane Catastrophe Fund. The Doctors Company and the Florida Medical Association were instrumental in obtaining passage of this bill.
In a 7–0 decision in Georgia, the state supreme court ruled in Atlanta Oculoplastic Surgery, PC v. Nestlehutt et al., 286 Ga. 731 (2010) that the state’s $350,000 noneconomic damage cap was unconstitutional because it violated the right of trial by jury. In addition, six of the justices voted to apply the decision retroactively to all cases where the cap was applied within the last five years.
In a 6–1 decision, the Maryland Court of Appeals upheld the limit on jury awards for pain and suffering in personal injury cases. In DRD Pool Service, Inc. v. Thomas Freed, et al., 2010 Md. LEXIS 530, the court held that a reduction of a jury award of noneconomic damages did not violate the plaintiff’s constitutional rights. The court wrote that uncertainty in insurance premiums provides a rational basis for the legislature to limit damages.
In Ohio, SB 86 (Steve Buehrer-R) proposes to increase the negligence standard for emergency room providers to “willful or wanton.” This would be extended to providers in a disaster situation as well. The bill passed the state senate 22–10 and should be debated in the state house this fall.
HB 361 (Murray-D) would allow for “phantom damages” by redefining economic damages to allow the charges that were “billed” rather than the charges that were “incurred.” The Doctors Company and Ohio’s business and medical organizations have lobbied against the bill. HB 361 was sent to the House Rules and Reference Committee but has not, to date, been set for a hearing.
Virginia Governor Bob McDonnell (R) signed two measures that took effect in October: SB 675 (William Wampler-R), which requires health insurers to cover patient care via telemedicine (interactive audio, video, or other electronic media), and HB 11 (Robert Marshall-R), which allows providers to appeal a payer’s negative utilization review decision.
The Doctor’s Advocate is published by The Doctors Company to advise and inform its members about loss prevention and insurance issues.
The guidelines suggested in this newsletter are not rules, do not constitute legal advice, and do not ensure a successful outcome. They attempt to define principles of practice for providing appropriate care. The principles are not inclusive of all proper methods of care nor exclusive of other methods reasonably directed at obtaining the same results.
The ultimate decision regarding the appropriateness of any treatment must be made by each health care provider in light of all circumstances prevailing in the individual situation and in accordance with the laws of the jurisdiction in which the care is rendered.
The Doctor’s Advocate is published quarterly by Corporate Communications, The Doctors Company. Letters and articles, to be edited and published at the editor’s discretion, are welcome. The views expressed are those of the letter writer and do not necessarily reflect the opinion or official policy of The Doctors Company. Please sign your letters, and address them to the editor.
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