Florida Set for Showdown on Constitutionality of Noneconomic Damages Caps in Medical Malpractice Cases

By Robert A. Bitterman, MD, JD, FACEP, Contributing Editor, President, Bitterman Health Law Consulting Group, Inc.

The 11th Circuit Court of Appeals ruled Florida's cap does not violate the federal Constitution, but punted whether the cap violates the Florida Constitution to the Florida Supreme Court.

The Case of McCall v. United States1

After a two-day "bench" trial (no jury), a United States district court judge held the United States liable for causing the death of Michelle McCall from negligent peripartum and postpartum care she received from the medical staff at a U.S. military hospital.1,2

The court awarded Ms. McCall's estate $980,462.40 in economic damages and $2 million in noneconomic damages. However, the court then applied Florida's statutory cap on noneconomic damages for medical malpractice claims, which had been enacted as part of the state's tort reform of 2003. Consequently, the judge limited the estate's recovery of noneconomic damages to $1 million.3

The estate appealed the decrease in its monetary damages to the federal appeals court, asserting that Florida's limitation on noneconomic damages violated the United States Constitution as well as the Florida Constitution.

The 11th Circuit Court of Appeals ruled that the cap did not violate the U.S. Constitution and did not violate parts of the Florida Constitution, but it left undecided whether the cap violated other aspects of the Florida Constitution. Instead, it booted those issues to the Florida Supreme Court for resolution.1

Florida's statute provides that for a personal injury or wrongful death claim arising from the medical negligence of practitioners (typically doctors):

• Regardless of the number of practitioner defendants, noneconomic damages shall not exceed $500,000 per claimant, and no practitioner shall be liable for more than $500,000 in noneconomic damages, regardless of the number of claimants.

• However, if the negligence resulted in a permanent vegetative state or death, the total noneconomic damages recoverable from all practitioners, regardless of the number of claimants, shall not exceed $1 million.

• The total noneconomic damages recoverable by all claimants from all practitioner defendants shall not exceed $1 million in the aggregate.3

The statute includes a similar provision for claims against nonpractitioners (hospitals). That provision limits noneconomic damages to $750,000 per claimant, or $1.5 million in the aggregate recoverable by all claimants against all nonpractitioner defendants.4

The court noted that Florida's statutory cap on noneconomic damages was rationally related to a legitimate governmental purpose; the legislature had specifically created the cap in an effort to make malpractice insurance easier to obtain and reduce the cost of medical care.5

The plaintiffs had argued that the cap lacks a rational basis because the Florida legislature "had no objective, factual basis for believing" that a cap on noneconomic damages for medical malpractice claims would reduce the cost of medical malpractice insurance. The court found no merit in this argument, pointing out that before enacting the cap, the Florida legislature's Select Committee specifically prepared a report on the issue.6

The Florida legislature reported that a recent, dramatic increase in medical malpractice liability insurance premiums had increased the cost of medical care and decreased the availability of malpractice insurance.7 The legislature observed that "[t]he primary cause of increased medical malpractice liability insurance premiums has been the substantial increase in loss payments to claimants caused by tremendous increases in the amounts of paid claims."8

Furthermore, before issuing the report, the legislature held public hearings, heard expert testimony, and reviewed a separate report prepared by Governor Jeb Bush's Task Force on Healthcare Professional Liability Insurance. The task force report set forth that health care providers were changing the scope of their practice, leaving Florida, or retiring because of escalating medical malpractice premiums. The task force recommended that the legislature create a "per incident" medical malpractice cap on noneconomic damages to remedy the problem.1

Additionally, the task force determined that, "Florida's medical malpractice insurance crisis presented an overpowering public necessity requiring the adoption of the liability caps."8 The court noted it is not the role of the judiciary to second-guess the wisdom, fairness, or logic of the choices made by the legislative branch, as long as the legislature identified a legitimate governmental purpose in passing the statute. In this case, that purpose was to ensure the availability of quality healthcare by controlling the cost of medical malpractice.9,10

However, the court then noted that a number of the plaintiff's challenges to the cap's constitutionality under Florida law had not been adequately settled in the Florida courts, so sufficient legal precedent did not exist for it to address those issues. Therefore, the appellate court shuffled those issues over to the Florida Supreme Court for adjudication.11,12

Now it will be up to the Florida Supreme Court to determine if the statutory cap on noneconomic damages violates equal protection, right to jury trial, right to access the courts, and the separation of powers guaranteed by the Florida Constitution.13,14

Florida Supreme Court

The battle in the Florida Supreme Court promises to be a knock-down melee. Groups such as the Florida Justice Association, AARP, the AFL-CIO, AFSCME, and the American Bar Association recently filed briefs contending the $1 million cap on pain-and-suffering damages is unconstitutional.15

On the other side, Florida Attorney General Pam Bondi and a wide range of medical groups, including the Florida College of Emergency Physicians, have indicated they will file briefs in support of the law.15 Supporters have long contended that noneconomic damages caps are necessary to hold down medical malpractice insurance costs for physicians and other health care providers.

In its brief, the American Bar Association opposes noneconomic damage caps because they "discourage lawyers from taking meritorious cases where economic damages are low and thus undermine the ability of a significant number of injured persons to seek redress in the courts."

The 2003 medical malpractice revamp incited one of Tallahassee, FL's most notorious political fights of the past decade. Physicians and former Governor Jeb Bush pushed for an even lower cap on noneconomic damages, $250,000, which was a lightning-rod issue during the debate. The legislature compromised, after many contentious clashes, finally settling on the $500,000 or $1 million limits, depending on the circumstances and number of claimants, as noted earlier.3

Florida Legislature

It is not only the McCall case that could spark renewed tort reform wars in Florida; the legislature and new Governor Rick Scott recently upped the ante, enacting several additional laws to protect physicians and healthcare facilities against patient lawsuits.16

The most notable ones take effect October 1 and include the following:

Expert Witness Restrictions and Discipline.16

• Any physician who provides expert testimony regarding the prevailing professional standard of care must be either: 1) licensed in the state of Florida; or 2) obtain in advance an "expert witness certificate" from the Florida Department of Health.

• The medical boards are granted the power and authority to discipline any expert witness who provides deceptive or fraudulent expert witness testimony. This includes those physicians licensed in state and those testifying under an expert witness certificate.

• Additionally, any expert witness who submits the pre-suit-verified expert medical opinion is no longer immune from discipline.

This statute fixes a glitch in the Florida medical malpractice system, whereby out-of-state expert witnesses could enter Florida and generate huge fees by providing "less-than-accurate" testimony, knowing they could do so without being held accountable in any meaningful way. The new requirements apply equally to experts for both sides, not just plaintiffs' experts. Florida did not go as far as some states, which actually require all physicians to be fully licensed in-state in order to testify in state malpractice cases.17

Limited Medicaid Liability

The legislators passed three Medicaid bills capping pain-and-suffering damages. They limited the amount of these noneconomic damages, which could be assessed against providers who treated Medicaid patients at $200,000 for physicians, at $250,000 for nursing homes, and $300,000 for hospitals, unless the provider acted in bad faith, with malicious purpose, or with willful and wanton disregard for human rights, safety, or property.18

Reportedly, lawmakers made the changes to convince hospitals and physicians to go along with the legislature's plans to revamp Medicaid into a managed care program in the state.19

Extended Sovereign Immunity

The law also limits lawsuits against teaching hospitals and faculty physicians in the state by extending the state's "sovereign immunity" protections to teaching institutions, which caps all damages (not just noneconomic damages) at $100,000 per person and $200,000 per incident.

Limits Federal Influence in State Malpractice Cases

The law disallows federal standards or regulations into evidence that establish the medical provider breached the prevailing professional standard of care. Thus, breach of, or failure to comply with, any federal requirement is not admissible as evidence in a medical negligence case. This obviously is aimed at heath care reform, the Accountable Care Act, but could also potentially prevent government sanctions in EMTALA proceedings from being entered into civil court as evidence the hospital violated EMTALA.

Excludes Insurance Determinations as Evidence of Breach in the Standard of Care

No longer is information from an insurer's reimbursement policies, or reimbursement determination regarding medical care provided to a plaintiff, admissible as evidence against a provider. For example, Medicare's decision to refuse to pay a hospital for treatment of a "never event" would not be admissible to show a breach of the professional standard of care.

Forces Plaintiffs to Release "Protected Health Information"

Plaintiffs will now be required submit a form for the release of protected health information that is potentially relevant to the claim of personal injury or wrongful death, whenever notifying a prospective defendant of their intent to sue for malpractice. This will make it much easier for a physician to obtain the patient's health care information early on in a malpractice suit.

Furthermore, if the plaintiff does not, in good faith, complete the new pre-suit form, the "authorization for release of protected health information" form, the court can dismiss the claim and assess attorneys' fees and costs against the plaintiff.

Enhances Physicians' Opportunities to Control the "Right to Settle" a Malpractice Claim

Insurance policies for medical malpractice coverage will now be required to state clearly whether or not the insured physician has the exclusive right to veto of any insurance company's intent to settle a case or admit liability (with its National Data Bank implications) on behalf of a physician. Additionally, the law repeals the requirement that a physician, in the insurance policy, must authorize the insurer to make this decision without the permission of the insured physician, if the settlement is within the policy limits.

Proponents of tort reform trust that these statutory changes will further decrease the number of medical malpractice suits filed in Florida. The Florida Office of Insurance Regulation reported that after the series of sweeping changes made in 2003 by Governor Jeb Bush, which included the caps on noneconomic damages, both the number of lawsuits and the size of payouts fell by about 14%, and the total insurance premiums paid by physicians dropped even further, around 36%.

Florida has the highest medical malpractice premiums in the nation and, expectantly, ranks among the states with the greatest amount in paid malpractice claims. The average liability premium for an obstetrician is $200,000 per year, which equates to approximately $2,000 of the delivery cost for each baby funneled straight to paying malpractice insurance premiums.17

The American Tort Reform Association (ATRA) pronounced 2011 as the "most productive year for enactment of meaningful state civil justice reforms in recent memory."20 Indeed, more than 30 new tort reform measures have been passed already in the states this year, including "big wins" in Alabama, Arizona, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, and Wisconsin.20-23 But there have been big losses recently, too, most notably the Supreme Courts of Illinois and Georgia struck down caps on noneconomic damages.24

The American people consistently believe that limits on noneconomic or pain-and-suffering damages are a "good thing." Harris Interactive polling data show that nearly two-thirds of Americans support full payment for medical expenses and economic losses, coupled with reasonable limits on pain-and-suffering damages for patients harmed due to medical negligence.20

ATRA president Tiger Joyce summed up the Harris poll stating: "Such strong support is likely attributable to the fact that better than seven in 10 Americans, according to the survey, believe their access to affordable, high-quality health care is threatened because medical liability costs are forcing good doctors out of medicine. And nearly six in 10 believe excessive and unpredictable medical liability lawsuits are a significant factor in driving health care costs higher. All of which explains why 58% of Americans say they want Washington lawmakers to support comprehensive medical liability reform, while only 23% oppose such reform."20

One recent research study strengthens the case for liability reform, finding that states with caps on noneconomic damages have medical liability premiums, on average, at least 17% lower and the supply of physicians in high-risk specialties from 4% to 7% higher than those states without noneconomic damages caps.25

Even the federal government is paying attention to the impact of tort reform. During the end game of the recent federal debt ceiling negotiations, both the Executive Office of the President and the Congressional Research Service requested malpractice rate survey data to examine the cost-decreasing effects of medical liability reform on the provision of health care.20

On more than one occasion, the non-partisan Congressional Budget Office (CBO) has opined that significant cost savings could result from inserting malpractice liability reform into the federal health care programs, such as Medicare and Medicaid. The CBO projects that such liability reform would generate savings of $13.5 billion in the first five years after enactment, and $54 billion over a 10-year time period.26,27

Governors and state lawmakers of both parties, as well as local business leaders, see vigorous job growth in tort reform states such as Texas,28 but just the opposite in highly litigious states such as Illinois, California, and New York, where the legislative process is dominated by plaintiffs lawyers. As ATRA president Joyce opined, "One needn't be a Nobel-winning economist to understand that reasonable limits on liability promote prosperity, while expansions of liability undermine prosperity."20

Maybe the federal legislature will finally wake up to the economic and health care benefits of reasonable medical liability laws that have so benefited the states in recent years.

References

1. McCall v. United States, No. 09-16375 (11th Cir. May 27, 2011), available at http://www.ca11.uscourts.gov/opinions/ops/200916375cert.pdf.

2. Plaintiffs sued the U.S. under the Federal Tort Claims Act ("FTCA"), 28 U.S.C. §§ 1346(b), 2671–80.

3. Fla. Stat. § 766.118(2).

4. Fla. Stat. § 766.118(3).

5. See Fla. Stat. § 766.201(1).

6. See Florida House of Representatives, Select Committee on Medical Liability Insurance Report (2003).

7. See Fla. Stat. § 766.201(1)(a).

8. See Fla. Stat. § 766.201(1)(b).

9. McCall v. United States, No. 09-16375 (11th Cir. May 27, 2011), available at http://www.ca11.uscourts.gov/opinions/ops/200916375cert.pdf (citing Hodel v. Indiana, 452 U.S. 314 (1981)).

10. See Fla. Stat. § 766.201.

11. See Fla. Const. Art. V, § 3(b)(6).

12. See Fla. R. App. P. 9.150.

13. See Fla. Stat. § 766.118.

14. See Fla. Const. Art. I & Art. II.

15. See McCall v. United States, appeal docket, No. SC11-1148 (Florida Supreme Court).

16. E.g. Florida House Bill 479.

17. See, Butler, Dr. Madelyn E. Bill Aims to Make Florida a Friendlier Place to Practice Medicine, St. Petersburg Times, May 19, 2011, available at http://www.tampabay.com/opinion/columns/bill-aims-to-make-florida-a-friendlier-place-to-practice-medicine/1170370.

18. Florida House Bill 7109.

19. Saunders, Jim, Court May Decide Medical Malpractice Cap, The St. Augustine Record, Health News Florida, August 29, 2011, available at http://staugustine.com/news/local-news/2011-08-29/court-may-decide-medical-malpractice-cap.

20. Medical Liability Monitor 2011;36(8):1.

21. See e.g., Bitterman RA. Tort Reform Takes Big Hits, But Keeps on Ticking. ED Legal Letter 2010;21(5):49-54.

22. See e.g., Bitterman RA. Update on State Medical Malpractice Wars — Part I of II. ED Legal Letter 2010;21(7):73-77.

23. See e.g., Bitterman RA. Update on State Medical Malpractice Wars — Part II of II. ED Legal Letter 2010;21(8):85-89.

24. Lebron v. Gottlieb Memorial Hospital, 930 N.E.2d 895 (Illinois 2010); Atlanta Oculoplastic Surgery, P.C. v. Nestlehutt, No. S09A1432 (Ga. Mar. 22, 2010); but also see Gliemmo v. Cousineau, No. S09A1807 (Ga. Mar. 15, 2010) (upholding beneficial standards of liability in emergency cases in Georgia).

25. Kane CK and Emmons DW. The Impact of Liability Pressure and Caps on Damages on the Healthcare Market: An Update of Recent Literature, 2007 American Medical Association, available at http://www.ama-assn.org/ama1/pub/upload/mm/363/prp2007-1.pdf.

26. Congressional Budget Office, Reducing the Deficit: Spending and Revenue Options, Pub. No. 4212, March 2011, available at http://www.cbo.gov/ftpdocs/120xx/doc12085/03-10-ReducingTheDeficit.pdf.

27. Congressional Budget Office, Cost Estimate: H.R.5 - The Help Efficient, Accessible, Low-cost, Timely Healthcare (HEALTH) Act of 2011, as ordered by the House Committee on the Judiciary on February 16, 2011, March 10, 2011. Available at: http://www.cbo.gov/ftpdocs/120xx/doc12095/hr5.pdf.

28. See, Bitterman RA & Fish MB. Health Care Reform: Should It Grant Physicians Immunity for EMTALA Mandated Services? ED Legal Letter 2009;20(10):109-113 (detailing the success of Texas tort reform).