Proponents Ring Alarm After Court Ruling Strikes Down Ill. Tort Reform Law
A Cook County, Ill., Circuit Court ruling in late November struck down the state’s much touted 2005 medical liability reform law, calling the caps on non-economic damages for medical malpractice lawsuits unconstitutional. Proponents of the tort reform law were quick to respond to the ruling. National insurance trade groups were among the first to offer comments.
“Throwing out the non-economic damage award cap will once again subject medical malpractice insurers to excessive verdicts and settlements, setting back the limited progress we have seen in the Illinois market,” said Steve Schneider, American Insurance Association (AIA) vice president, Midwest Region. “We are disappointed in the ruling and hope the caps are found constitutional on appeal. Otherwise, we fear a rewind to 2004 when the market was in crisis and Illinois citizens where without access to healthcare.”
In 2005, Illinois enacted a medical malpractice reform law to address an access to care crisis that has seen more than 135 physicians flee the downstate Metro East area. In addition, more than 44 verdicts or settlements in excess of $5 million were handed down in Cook County alone the previous year.
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 health care expenses, remained uncapped).
Opponents of the reform law announced immediately upon its signing they would challenge its constitutionality. The recent decision, by Cook County Circuit Judge Diane Larsen, was made in LeBron v. Gottlieb Memorial Hospital, et al. (Cook County 06 L 12109), the first case addressing the 2005 law to go to trial. An appeal of the decision would have to go directly to the State Supreme Court.
Previous Caps Struck Down
Two previous caps on damages have been deemed unconstitutional by the state Supreme Court, the last time in 1997 as part of a broader reform law that covered wrongful death and personal injury cases. The court said the law was illegal special legislation and legislators infringed on the judiciary’s power to reduce unfair damage awards.
Cap advocates say this time should be different, partly because the latest caps only cover malpractice cases.
Trial lawyers, including LeBron’s team, argue the caps still violate victims’ constitutional rights to due process and equal protection by limiting what they can receive for their pain and suffering.
“This is an important victory for the rule of law and constitutional government over the rule of special interests,” said Bruce Kohen, president of the Illinois Trial Lawyers Asso-ciation.
AIA member companies have a different perspective.
“The business of insurance operates best when there is a stable, predictable tort climate. Illinois already has a poor liability climate by most measures and this ruling will do nothing to help that fact,” Schneider said.
Des Plaines, Ill.-based the Property Casualty Insurers Association of America (PCI) also criticized the ruling.
“Ultimately all citizens of Illinois, especially rural downstate residents, are the ones hurt by this ruling,” said Greg LaCost, assistant vice president and PCI regional manager.
“Once again the Illinois Court is rolling back needed protection from abusive lawsuits. Medical liability caps have worked in other states and the current law was helping to create an environment that encouraged doctors to remain in the state and preserve access to quality health care. We are hopeful that this ruling will be reversed if it appealed.”
Effect on new companies
Insurers are not sure how the ruling will affect companies entering the Illinois market.
One new company, Medicus Insurance, said it would continue writing medical malpractice insurance in Illinois despite the Cook County Circuit Court ruling.
“Today’s ruling hasn’t changed our decision to be a major player in Illinois for years to come,” Sheldon Davidow, president of Medicus said. “Although Medicus is a strong supporter of tort reform, we entered the market after a thorough examination of the entire business climate and chose to write policies with or without tort reform. Our decision is irrevocable, and we will continue to work hard in growing our company.”
Medicus, a Texas-based insurance company, entered the Illinois med-mal market this past spring writing policies in all specialties and in all parts of the state.
As the cost of medical malpractice insurance skyrocketed in Illinois over the past decade, some communities found themselves without specialty physicians or in some cases with no doctors at all. In 2001, there were 17 malpractice insurance providers in Illinois. The crisis drove most major carriers out of the state.
A step backwards
The American Medical Association also weighed in on the ruling.
“The ruling to strike down the medical liability cap in Illinois is a step backward for Illinois’ patients and physicians as it once again puts patients’ access to care in jeopardy,” said Robert M. Wah, M.D. AMA Board of Trustees.
“Since capping non-economic damages in 2005, Illinois’ medical liability insurance rates have gone down, allowing Illinois physicians to stay in practice and provide care for their patients.
“Medical liability reforms work. After placing a cap on non-economic damages more than three decades ago, the medical liability climate in California remains stable with premiums in check. In 2003, Texas enacted reforms and now patients benefit from a statewide influx of physicians. The AMA continues to vigorously support state and federal reforms to protect access to care for all Americans,” Wah said.
At this writing it is unclear when a challenge to the Illinois Supreme Court ruling will be submitted.
The following sources contributed to this article: Associated Press, AIA, Medicus, PCI and AMA.