La. Appeals Court Says $500,000 Malpractice Cap Too Low

Louisiana’s $500,000 cap on medical malpractice damages, set in 1975, is unconstitutional because it no longer provides an adequate remedy to patients, the 3rd Circuit Court of Appeal in Lake Charles has ruled in a 3-2 decision.

A $500,000 award would be worth about $160,000 today, the opinion, issued Wednesday, said. The court said evidence indicates the cap would have to be raised to $1.6 million or $1.7 million to provide the same protection as it did 31 years ago.

“In either case, we find the current $500,000 cap fails to provide an adequate remedy to today’s severely injured plaintiffs, and thus, is unconstitutional. ,” the ruling says.

The opinion was by Judge Elizabeth Pickett, who was joined by judges Billy Howard Ezell, and James T. Genovese. Dissenting were judges Sylvia Cooks and Oswald Decuir.

Sue Chopin, a spokeswoman for Lammico, the state’s largest medical malpractice company, said the ruling could harm the state’s post-hurricane recovery by discouraging doctors and insurance companies from doing business in the state. “Ultimately, what it’s going to do is limit access to health care for Louisiana citizens.”

Oliver J. Schrumpf, an attorney in the case, argues that there is no evidence that bigger awards mean the state will lose doctors or that malpractice rates will skyrocket. Schrumpf represents family members of man named William Arrington in a lawsuit against Galen-Med Inc., owner of a Lake Charles hospital where Arrington died in 1994, according to the opinion. The lawsuit resulted in Wednesday’s 3rd Circuit ruling.

An affidavit by the director of the state Board Of Medical Examiners, which was introduced in this case, says the number of doctors in Louisiana has risen every year for four decades, Schrumpf said.

Malpractice rates are going to go up regardless of who wins the lawsuit, which will now be argued before the state Supreme Court, Schrumpf said.

Joanne Doroshow, co-founder of consumer watchdog Americans for Insurance Reform, said “a ton of evidence” shows that there is no correlation between malpractice caps and malpractice insurance rates.

“The rate activity in the states with caps is the same as in states without caps,” Doroshow said.

In 2005, a study published in Health Affairs magazine found that medical malpractice accounted for less than 1 percent of health care spending. The study also found that defensive medicine, where doctors run tests or do procedures to lower their chances of being sued, makes up no more than 9 percent of total spending.

However, Dr. Floyd Buras, president of the Louisiana State Medical Society, held Lammico up as an example of businesses that could be hurt by the ruling. Lammico, he said, is a physician-run insurer whose only goal is to make sure providers have malpractice insurance.

The company insures most of Louisiana’s doctors, he said.

Buras said the 3rd Circuit’s ruling appears to address only the dollar amount of the medical malpractice cap and does not eliminate the cap altogether.

If the cap were eliminated entirely, Louisiana’s medical malpractice market would be thrown into confusion and uncertainty, Buras said.

“The fact is judges are not free to devise new rules of interpretation to avoid existing legislation and judicial precedent upholding the validity of statutes,” Cooks wrote in the dissent.