Insurers Decry Overturn of Illinois Med-Mal Caps; Attorneys Praise Ruling

The American Bar Association says the Illinois Supreme Court was right in striking down as unconstitutional the caps on non-economic damage awards in medical malpractice cases.

Insurer groups, however, say the decision will add to rising health care costs and stymie the economic climate in the state.

In an opinion filed on Feb. 4, 2010, in Lebron, a Minor v. Gottlieb Memorial Hospital, the state’s highest court reasoned that the statute that places caps on jury awards violates the separation of powers clause in the state constitution because it allows the legislature to exercise powers “properly belonging to the judiciary.”

Lebron concerned an infant who suffered permanent and severe injuries during childbirth due to unsound medical practices. Abigaile Lebron “sustained numerous permanent injuries including, but not limited to, ‘severe brain injury, cerebral palsy, cognitive mental impairment, inability to be fed normally such that she must be fed by a gastronomy tube, and inability to develop normal neurological function,'” according to the court’s written opinion.

The case was brought to the Supreme Court on direct appeal from a circuit court that also ruled in favor of the plaintiffs and found the non-economic damage caps to be unconsititutional.

“It is the province of the court system to determine damages, said the court, and not the prerogative of the legislature to require judges to reduce damages to a predetermined level. In the heat of the current national debate over health care reform, it is vital to recall that real people suffering real injuries are behind each case in which courts find that medical malpractice has occurred,” said Carolyn B. Lamm, president of the American Bar Association in a statement released by the group.

The insurance company trade groups, Property Casualty Insurers Association of America and the American Insurance Association, issued strong warnings about the negative effects the Supreme Court’s decision will have on the Illinois health care market.

“This decision is a step back for tort reform in Illinois,” said Deirdre Manna, vice president Industry, Regulatory and Political Affairs for PCI. “The litigation climate in Illinois continues to hurt the state’s economy and this decision sends the wrong message. Since 2005, when the state Legislature approved the caps, we have seen some stabilizing in costs. … This ruling will signal a return to rising medical costs and the widespread inaccessibility of medical care.”

The AIA cautioned that the Court’s ruling that 2005 medical liability reform law is unconstitutional “will once again subject medical malpractice insurers to excessive verdicts and settlements, setting back any progress in the Illinois market,” in a statement attributed to AIA Senior Counsel Ken Stoller.

Illinois enacted the medical malpractice reform law in 2005 to address a crisis in access to care after more than 135 physicians left the down-state Metro East area, the AIA said.

The key provision of the law was a cap on non-economic damages of $500,000 per doctor and $1 million per hospital. Economic damages, such as money needed to pay healthcare expenses, were not capped, according to the AIA.

At least one medical liability insurer said that while it is disappointed with the Illinois Supreme Court ruling, it will stick with its policyholders in the state.

Medicus Insurance Company, based in Austin, Texas, said it remains committed to the physicians and medical care providers of Illinois.

Expressing disappointment with the ruling, Medicus President Eugenie Shea said: “Limiting the awards on medical professional liability cases protect physicians from frivolous lawsuits and helps manage the cost of practicing medicine in the state. This decision hurts physicians and their ability to freely practice sound medicine.”

Medicus has been a fully admitted carrier in Illinois since 2006.

Justice Lloyd Karmeier wrote a partial dissent in the case, saying it’s not the court’s job to second-guess the legislature’s intent.

“Our job is to do justice under the law, not to make the law,” Karmeier wrote. “Formulating statutory solutions to social problems is the prerogative of the legislature. Whether there is a solution to the health-care crisis is anyone’s guess. I am certain, however, that if such a solution can be found, it will not come from the judicial branch.”

In its Feb. 4 ruling, the Illinois Supreme Court remanded the case back to the circuit court to consider other issues in the case not addressed by the high court.