Wisconsin Assembly Reinstates Med-Mal Caps But Governor’s Veto Likely

The Wisconsin State Assembly last month passed a bill to reinstate caps on medical malpractice awards in the state by a more than two-to-one margin.

Legislators voted 64-30 in favor of Assembly Bill 766, which imposes a $550,000 cap on non-economic damages for children and a $440,000 cap for non-economic damages for adults.

If approved, the bill would reimpose a cap on so-called “pain and suffering” awards in medical malpractice cases. In July, the State Supreme Court struck down a cap of $350,000 set in 1995.

The Supreme Court ruled 4-3 that the cap is “unreasonable and arbitrary” because there is no “rational” relationship between it and lower medical malpractice premiums. It also violates equal protection provisions in the Wisconsin Constitution, the court ruled.

The cap is significant because health care industry leaders have argued that it has helped keep medical malpractice insurance premiums much lower in Wisconsin than in many other states, since insurers need not worry about multi-million-dollar damage awards. According to a search conducted by the Milwaukee Journal Sentinel, the caps, though rarely directly applied, appear to have contributed to a dramatic decline in the rate of malpractice lawsuits.

Governor likely to veto

Gov. Jim Doyle has said he is likely to veto the bill since it resembles the law that was struck down by the Supreme Court as unconstitutional.

The issue has been fomenting in Wisconsin for more than 30 years. In 1975, the legislature created the Patients’ Compensation Fund to pay off jury verdict amounts beyond doctors’ insurance coverage. It also limited awards to $500,000 if the fund ever ran low, but that provision was never invoked.

Now called the Injured Patients and Families Compensation Fund, the doctor-funded pool of money covers verdict amounts of more than $1 million. This summer, it had a balance of more than $740 million. The fees most doctors are required to contribute to the fund are as low as, or lower than, fees from the late 1980s.

In 1986, the Wisconsin legislature set a $1 million limit on pain-and-suffering damages, which expired in 1991. In 1995, the $350,000 cap was established, which was struck down by the Supreme Court in July.