Lawsuit limitations common
More than half of the states impose award ceilings

Personal injury lawyers proclaim Texas’ recently enacted caps on non-economic damages in healthcare lawsuits is heresy, but a review of lawsuit reforms nationally paints a much different picture, according to Citizens Against Lawsuit Abuse.

“Twenty-six states cap non-economic damages, total damages or both in healthcare lawsuits,” said Jon Opelt, Houston director of Citizens Against Lawsuit Abuse. “Limitations on court awards are relatively common,” said Opelt.

With the recent addition of Texas, twenty-two states now cap hard to quantify non-economic awards for mental anguish or loss of companionship, with caps ranging from $250,000 to one million dollars,” Opelt said.

Some caps come with additional stipulations. Missouri has a $350,000 non-economic cap but allows payouts to be increased or decreased according to the rate of inflation. Massachusetts and Michigan allow raising or lifting their cap for specific injuries. Five states cap total damages in healthcare lawsuits and Colorado caps both non-economic and total damages.

Two months ago, Texas lawmakers passed a $750,000 overall limit for non-economic awards in healthcare lawsuits. The new law limits non-economic damages against doctors at $250,000. If institutions such as hospitals or nursing homes are involved in a suit, the overall limit rises to $750,000. Texas makes no attempt to cap past or future medical bills, lost wages or punitive damages. The new cap applies only to damages awarded for subjective, emotional loss.

In many states, damage caps have been challenged in the courts and found constitutional, Opelt said.

Non-economic awards have quadrupled in Texas during the past decade. Damages for such subjective issues like loss of companionship and emotional distress are a primary component in medical liability verdicts. Non-economic damages also are considered a major driver of soaring liability premiums for doctors and hospitals.

Liability costs for Texas nursing homes have increased on average 1,000 percent since 1998. Half of the non-profit nursing homes in Texas can’t afford insurance. Texas obstetricians pay the second highest premiums in the nation, with many paying annual liability costs of $90,000 or more. Fewer than half of the state’s counties have a licensed obstetrician. Texas internists and general surgeons pay liability rates double that of their California counterparts.

What’s more, the state is suffering from a severe shortage of doctors, especially in pediatrics, obstetrics and neurosurgery. Some 24 Texas counties lack a primary care physician, and more than half of the state’s counties lack a doctor specializing in children’s care.

According to the State Board of Medical Examiners, the number of doctors per capita in Texas is 29 percent below the national average.

Texas voters will consider a proposed constitutional amendment on the September ballot affirming or rejecting the Legislature’s authority to set caps on non-economic awards for healthcare cases and other civil litigation. Voter approval of Proposition 12 would mean damage caps recently enacted by the state legislature will not be subject to court challenges.

The 1991 Texas worker’s compensation reform bill withstood four years of constitutional challenges before employers finally began to receive the rate relief they so desperately sought.

Some fear the state’s recently passed medical liability reforms will suffer the same protracted legal battles if Proposition 12 is not passed.

“That uncertainty will be put to rest if voters approve Proposition 12 on the September ballot,” said Opelt.

“If the proposed amendment is defeated it doesn’t nullify the caps,” Opelt said. “It only means that court challenges can go forward.”

“The reason that Texas and other states have passed a damage cap is clear,” said Opelt.

“In states that do not have a cap on non-economic damages, doctors, hospitals and nursing homes pay higher liability costs,” said Opelt. “These higher costs are passed on to patients and policyholders in the form of higher medical bills and higher health insurance premiums,” Opelt noted.

“Medical liability damage caps really do impact access to health care,” said Opelt.

“States with lawsuit caps have an average of 12 percent more practicing physicians per capita than states without caps,” Opelt noted.

“What if we had a 12 percent rise in the number of doctor’s serving our healthcare needs, especially in our rural and border communities?” asked Opelt,” How great would that be?”

Citizens Against Lawsuit Abuse

2500 City West Boulevard, Suite 300 • Houston, Texas 77042
E-mail: sosueme@ • Administrative: (713) 267-2302 • Fax: (713) 267-2267