Court rules Lousiana liability limit unconstitutional

After three decades, Louisiana's $500,000 overall damage cap in medical liability cases has hit a snag after a narrow appeals court ruling that declared the award limit unconstitutional because it does not provide the same monetary protection for patients that it did 31 years ago.

In a 3-2 opinion, the state's Third Circuit Court of Appeal found that the $500,000 award, established in 1975, would be worth only $160,000 in today's dollars. The court said it would need to be raised to $1.6 million or $1.7 million to give patients the same relief they received when the law passed.

"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," Judge Elizabeth A. Pickett wrote for the majority.

The case is being appealed to the Louisiana Supreme Court.

In a dissenting opinion, however, Judge Sylvia R. Cooks noted that the high court upheld the cap in a 1992 decision. "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 1992 decision, justices ruled that as an offset to the award limit, the Louisiana Medical Malpractice Act established a state patient compensation fund that gives injured patients a guaranteed source of recovery for medical care and related expenses.

Under the cap, doctors who contribute to the fund would be responsible for paying the first $100,000 of a judgment, after which the fund would cover the remaining $400,000. The act does not limit future medical expenses, which the fund also would cover.

As physicians gear up for the court battle ahead, they are concerned that Louisiana's already devastated health care climate, still in post-hurricane recovery, will be further endangered if the ruling is allowed to stand.

"Louisiana patients and physicians have long benefited from a stable medical liability environment as a direct result of these reforms," said American Medical Association President William G. Plested III, MD, a thoracic and cardiovascular surgeon from California.

Louisiana is one of only six states the AMA lists as having a steady liability climate. Doctors say the cap has kept insurance premiums reasonable, letting doctors continue to practice.

If the cap is ultimately overturned, that assurance and access to care will deteriorate, said Louisiana State Medical Society President Floyd A. Buras, MD. "We're already suffering a loss of physicians because of the storm, and if the cap doesn't stay in place, we're going to accelerate the exodus of physicians out of the state," said Dr. Buras, a New Orleans pediatrician.

But the appeals court ruling appears to address only the monetary value of the cap and may not eliminate it altogether, he said.

"What the court didn't say was the concept of a cap is unconstitutional," he pointed out, adding that the LSMS plans to file a friend-of-the-court brief in the state Supreme Court.

Oliver J. Schrumpf, the plaintiff attorney in the case, disagreed. He said the court has struck down the award limit because it is unfair to patients who may be most harmed by medical negligence and for whom $500,000 isn't enough to cover their expenses.

He said there is no evidence that the cap has had any effect on insurance rates. "Our legislation did not cap insurance premiums, it did not cap insurance profits and it did not cap the compensation paid to insurance executives," Schrumpf said.