Indiana doctors face challenge to medical liability cap

An appeals court has cleared the way for a lawsuit testing the constitutionality of the state's $1.25 million damages limit.

By Alicia Gallegos — Posted Nov. 9, 2011

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Indiana physicians continue to battle a legal challenge over the state's medical liability damages cap.

Indiana Court of Appeals judges on Oct. 25 allowed a lawsuit against the cap to move forward, denying a request by Community Hospitals of Indiana to throw out the case based on procedural grounds.

The case stems from the death of patient Debra Plank, 47. In 2001, she sought treatment at Community Hospital in Indianapolis after experiencing abdominal pain. She was prescribed pain medication and sent home, said John Muller, the family's attorney.

Doctors eventually diagnosed her with a small bowel obstruction, according to court documents. As a result of the missed diagnosis, Plank contracted sepsis and died, court documents show.

Timothy Plank, her husband, sued the hospital and his wife's doctors. All but one physician were dismissed from the case. Jurors found the doctor was not negligent, but ruled the hospital was responsible.

Timothy Plank was awarded $8.5 million in damages, which was reduced to $1.25 million -- the limit for total damages in medical liability cases.

He challenged the reduction, but the trial court said it did not have the authority to rule on the cap's constitutionality after the state Supreme Court in 1980 upheld the limit. Plank appealed.

Appellate judges said the high court's 1980 decision left room for legal challenges.

"Our Supreme Court has declared both that a determination of constitutionality under [the law] can be revisited and that the challenging party has the burden to prove that changes in circumstances require reversal of existing case law," the court said (link).

Community Hospitals has the option of appealing the decision or agreeing to a hearing on the cap's constitutionality. At this article's deadline, attorneys for the hospital had not said what they intend to do.

Cap has long history

The Plank case is the first significant challenge to the state's cap in 30 years, said Julie Reed, general counsel for the Indiana State Medical Assn. The cap, enacted in 1975, is one of the oldest in the country, she said. The limit has been raised twice since its enactment.

The cap eased the medical liability crisis in the 1970s and continues to provide stability for doctors, Reed said. Before the law, some doctors stopped doing certain high-risk procedures because they could not find insurance coverage, she said. Others left the state.

"There is no question that the law... gave us the exact stability we needed and helped shore up and ensure [insurance] coverage was available. It stemmed the tide," Reed said.

But Muller said the climate has shifted since the cap was implemented, making the limit irrelevant.

"The circumstances have changed a lot. There is a healthy liability insurance industry. We think we'll be able to show the original justification [for the cap] no longer exists," he said.

The Litigation Center for the American Medical Association and the State Medical Societies filed a joint friend-of-the-court brief with the ISMA in support of the cap.

The Indiana Medical Malpractice Act has served the state well by putting in place a public policy that affords fair compensation while maintaining access to health care services, the brief said. The "constitutional challenge, if successful, would resurrect the medical malpractice crisis for ... health care providers and turn back the clock on 35 years of legislative policy," the brief said.

Only the Legislature has the authority to alter the cap, said Indiana Attorney General Gregory Zoeller, who intervened in the lawsuit on behalf of the state. Attorneys for the state are consulting with hospital attorneys and helping argue the case for the defense. Zoeller's office also submitted a brief to the appeals court defending the law.

"If circumstances have changed such that the justifications for the damages cap no longer exist, it is up to the Legislature, not the courts, to amend or repeal the statute," the state's brief said. "Indeed, by legislatively amending the cap to $750,000 in 1990 and to $1,250,000 in 1998, the Legislature has recognized that changed economic or social conditions may periodically warrant legislative revision of the act. Judicial revision, on the other hand, is neither required nor permitted."

The appellate court disagreed.

"The state misses an important point," judges said in their opinion. "While we must, of course, give substantial deference to the Legislature, our courts are also responsible for determining the constitutionality of laws."

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