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Indiana Passes Cap Change on Medical Malpractice Claims

Posted on: March 9, 2016 by Caitlin Morgan

Since 1999, Indiana has capped medical malpractice awards at $1.25 million. Under law SB 28, no health care provider is liable for more than $250,000 for a single malpractice incident. The total amount recoverable by the claimant is up to $1.25 million with the first $250,000 coming from the physician and the remaining $1 million coming from the Indiana Patient Defense Fund (PCF).

On March 3rd, house lawmakers passed a measure that would reform the state’s medical malpractice system—which was unanimously approved by the Senate on March 8th. The amendment to the bill raises the cap twice, from $1.25 million to $1.65 million on July 1st, 2017, and topping out at $1.8 million in 2019. The bill now goes to Governor Mike Pence to sign.

Representative Jerry Torr, a Carmel Republican who co-authored the amendment, said the legislature could consider additional increases to the cap in the future. “It’s better for us to take the step back and see how these two increases work,” Torr said, “and then see what we need to do in the future — whether these are the right amounts or whether it should be more or less.”

Senator Brent Steele, a Bedford Republican who wrote the proposal, said he aimed to find a compromise between medical associations who are worried about ballooning malpractice liability insurance costs and lawyers who represent patients injured or killed because of medical mistakes.

Other changes over time include:

  • Plaintiff’s attorneys fees are capped at 32% inclusive of all payments made, up from 15% for payouts limited from the PCF
  • Health facilities require a minimum aggregate of three times the amounts specified in I.C. 34-18-14-3(b), if less than 100 beds
  • Health facilities require a minimum aggregate of five times the amounts specified in I.C. 34-18-14-3(b), if more than 100 beds
  • Panelist healthcare providers will be paid $500 plus travel expense (up from $350)
  • Panel chairmen will be paid $250 per diem up to $2500 (up from $2000)
  • Underlying liability payment for healthcare provider will be $400,000 (up from $250,000)
  • Periodic payments by healthcare providers will be $300,000 (75% of $400,000) (up from $187,001)
  • Underlying liability payment for healthcare provider will be $500,000 (up from $400,000)
  • Periodic payments by healthcare providers will be $375,000 (75% of $500,000) (up from $300,000)
  • 60 days for PCF payments after settlement or non-appealable judgment (no longer paid quarterly by PCF)

Indiana is one of only three states that caps total damages, and of those, the Hoosier State’s is the lowest, according to the Indiana Hospital Association.

Caitlin Morgan manages the Risk Retention Group, member-owned Midwest Insurance Group, Inc., which participates in Indiana’s Patient Compensation Fund. Members include assisted living facilities, residential communities and nursing homes, and they gain the benefits of stable Medical Malpractice insurance pricing due to Indiana’s longstanding favorable regulatory environment. For more information about Midwest Insurance Group, contact us at 317-575-4440.

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Posted in: blog Malpractice Insurance Medical Malpractice