Iowa Senate Bill Caps Noneconomic Damages in Medical Malpractice Cases

An apparent history of large jury verdicts for plaintiffs prompted legislative reform in Iowa. The bill that has passed the Iowa House of Representatives and Senate is now waiting for Governor Kim Reynolds’s signature. The proposed legislation aims to cap noneconomic damages in medical malpractice lawsuits at $2 million for cases against hospitals. For medical malpractice suits against clinics and individual doctors, the bill would cap noneconomic damages at $1 million.

The History Behind Iowa’s Medical Malpractice Noneconomic Damages Cap

Currently, pursuant to Iowa law, most noneconomic damages awarded in medical malpractice cases are capped at $250,000. However, the current cap does not apply to cases in which the jury finds a substantial or permanent loss of body function, substantial disfigurement, or death. The current cap also does not apply in cases in which the jury determines the defendant acted with malice.

Iowa is one of 22 states that does not impose a cap on noneconomic damages in these specific cases. Of the states that impose such caps, the damages cap ranges between $250,000-$800,000.

Recent medical malpractice verdicts in Iowa include a record-breaking $97.4 million awarded in November 2022. The plaintiffs were the parents of a child who sustained a serious brain injury during his birth. The award in that case is considered the highest in Iowa’s history. As a result of the verdict, the defendants, an obstetric and gynecologic clinic, filed for bankruptcy.

Implications

Hospitals, physicians, and other stakeholders in the medical community in Iowa complain of feeling the pressure these large awards impose on the healthcare system at large. More specifically, such high medical malpractice awards have resulted in supposed high insurance rates around the state for hospitals, clinics, and healthcare providers. According to Iowa Governor Kim Reynolds, the limitless awards for noneconomic damages in medical malpractice cases and high insurance rates are driving small clinics around the state out of business and driving medical students out of the state upon graduation.

As such, some report that Iowa is experiencing a medical workforce shortage. Hospitals and clinics are finding it difficult to recruit and retain doctors in the state due to the alleged financial risks associated with medical malpractice cases. Similarly, studies show that just 22% of undergraduate-level medical students remain in Iowa after graduating.

Proposed Legislation and Status

On January 25, 2023, the Iowa Senate Judiciary Committee recommended the passage of Senate File 148 (formerly Senate Study Bill 1063). The proposed legislation sought to cap noneconomic damages against healthcare providers at $1 million. More specifically, the bill limits the amount of noneconomic damages that a jury can award if there is a substantial or permanent loss or impairment of bodily function, substantial disfigurement, or death to $1 million.

The bill describes noneconomic damages as damages arising from pain, suffering, inconvenience, physical impairment, mental anguish, emotional pain and suffering, loss of chance, loss of consortium, and any other pecuniary damages. The proposed legislation also includes an annual 2.15% increase to adjust for inflation. The Senate bill was later amended to be consistent with the House bill.

On February 8, 2023, both chambers of the Iowa legislature passed House File 161. The bill was amended to include a $2 million limit for hospitals. Additionally, the bill would place a $1 million limit for clinics and individual doctors. It is now waiting for Reynold’s signature.

Reactions from Both Sides

The medical community supports the proposed legislation. They believe that without caps on noneconomic awards, physicians are hesitant to work in Iowa and establish medical practices. In addition, hospitals and clinics believe that the legislation will make it easier to recruit and retain medical professionals. Furthermore, advocates of the legislation insist that the cap will also limit the rising cost of insurance, which has risen to the point of driving some hospitals and clinics to close.

Those opposed to the bill argue that the arbitrary limit imposed by the legislature is harmful to Iowans who are severely and permanently injured during medical procedures. Opponents of the bill also point to the fact that very few medical malpractice claims actually go to trial due to the high burden of proof required for plaintiffs. As such, according to the opponents, Iowa has seen a decrease in medical malpractice claims over the past decade.