How Medical Malpractice Caps Limit Patients' Rights

Many states have passed laws limiting compensation in medical malpractice cases. The result can be the loss of injured patients' legal options.

The purpose of medical malpractice law is to make a patient whole again. In other words, the law seeks to provide sufficient monetary compensation to place the patient in the same position that he or she would have been in had the malpractice never occurred. That's the idea anyway.

However, with the rising costs of both health care (for consumers) and professional liability insurance (for doctors), tort reform efforts have focused on ways to reduce the burden that medical malpractice compensation places on the health care industry. Many medical malpractice reform efforts have resulted in state legislatures passing laws that place caps on certain kinds of compensation in medical malpractice cases. This article discusses the types of medical malpractice damage caps that patients are likely to encounter and some of the effects that those caps have on medical malpractice lawsuits.

Types of Caps

There are two main types of caps that legislatures have placed on medical malpractice awards:

  • caps on total damage awards, and
  • caps only on non-economic damages.

Caps on total damages are pretty rare. Most states' caps apply to non-economic damages only, which includes compensation for pain and suffering and other more subjective losses stemming from the malpractice. Remember that in states that cap non-economic damages, there is no limit on the amount of compensation you can receive for medical treatment, lost income, and other financial losses (these are economic damages).

To provide a realistic illustration of how these caps might work, take the fictional case of Jim, who is a married 35-year-old man with two kids, ages 6 and 4. Jim was the victim of a doctor's mistake during a back surgery when he was 32. Prior to that time, Jim was very active. He played recreational softball and basketball with friends, and he cross-country skied with his wife. He was excited to coach his kids’ sports teams. He was a construction worker with a high school education. He made $50,000 per year.

Jim suffered an injury to his lower back while playing basketball. During surgery, his doctor accidentally left a cluster of nerves in Jim’s spine in a pinched position. After the surgery, Jim experienced severe pain, but the doctor only prescribed pain killers. After three days, Jim started to lose control over his legs. By the time an MRI was performed, the problem was diagnosed, and an emergency surgery was done to correct the problem. But the damage was permanent, and Jim was paralyzed from the waist down.

Immediately after the second surgery, Jim continued to experience severe pain in his lower body and back. An additional corrective surgery was performed to help alleviate pain about a year later. This helped, but Jim still experiences chronic pain -- some days it is only minor, but on other days it is debilitating. For the first year Jim took prescription painkillers every day. After the most recent surgery, he did his best to cut back because he hated the way that the drugs made him feel, but he still takes them two or three days per week.

Jim’s wife describes him as a different person now. He gets frustrated easily. When he is taking the prescription medication, he is barely coherent. He feels inadequate because he cannot be the husband and father he wanted to be. He has not volunteered to coach his daughter's T-ball team, as he doesn't think he could do it well from a wheelchair and is worried that the pain could make him snap at the kids.

He sees a psychiatrist once a month, who has diagnosed him with severe depression.

After a trial, a jury awards Jim $5,430,000, broken down as follows:

  • $180,000 for past and future medical expenses
  • $1,750,000 for past and future lost wages (because he can no longer earn his $50,000/year salary)
  • $1,000,000 for pain and suffering
  • $2,500,000 for loss of normal life (which is the lost value of his life, taking into account how active he was before the injury and all of the things that he can no longer do)

If the state had imposed a $750,000 cap on all damages in medical malpractice cases, Jim would recover a total of $750,000 from the hospital (remember, overall caps like these are rare; currently only Indiana, Louisiana, Nebraska, New Mexico, North Carolina, and Virginia have a cap on total damages).

If the state had imposed a $250,000 cap on non-economic damages, but no cap on economic damages, Jim would recover $2,180,000 (because medical expenses and lost wages are economic damages). If the state had placed no caps on damages, Jim would recover $5,430,000.

The Effect on The Patient

Caps on Total Awards

Medical malpractice caps have their most profound impact on those with the most severe injuries. When a doctor makes a minor mistake that causes minor injuries, the patient will usually be made whole because the damages will not exceed the cap. But when a doctor makes a major mistake, such as the one in Jim’s case, the patient will not usually be made whole because the cap limits the amount of available damages.

Caps on Non-Economic Damages

The justification for capping non-economic damages is that they are very speculative. How can pain and suffering be quantified? Thus (the argument goes), patients should be compensated for medical expenses and lost wages because those are fairly easy to quantify; but juries cannot be trusted to limit non-economic damages to reasonable amounts.

It Becomes More Difficult to Retain an Attorney

Medical malpractice lawyers almost always work on a contingency fee basis. This means they are paid a percentage of a winning result. When limits are placed on the amount of compensation available, it becomes more difficult for lawyers to assume the risk of losing (a costly outcome due to the expense of bringing a medical malpractice claim). This means patients who are harmed by negligent medical treatment may have a hard time finding a lawyer to take their case. When lawyers are forced to turn down otherwise good cases for financial reasons, injured patients suffer most.

See Your State Law

Medical malpractice reform efforts vary by state, and so do laws that impose damage caps in medical malpractice cases. For details on the rules where you live, check out our state chart on damage caps.

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