Legislature passes medical malpractice cap

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The Wisconsin Senate passed a bill last week that would reestablish medical malpractice caps for noneconomic damages. The bill was created in response the Wisconsin Supreme Court’s decision last summer which determined the existing 10-year-old caps were unconstitutional.

Although the bill successfully passed both the state Senate and Assembly, its future is uncertain. Gov. Jim Doyle has not indicated whether he will sign the bill which received a 19-14 Senate vote with Republicans supporting the measure and Democrats opposing it.

Doyle spokesman Dan Leistikow did not say whether or not the governor intended to sign the legislation. However, he said the governor had hoped that both sides would have been able to sit down together and reach an agreement on the legislation. Doyle has until January to act on the legislation.

The Assembly approved the proposal Oct. 25 with a 64-30 vote. But if Doyle decides not to approve the legislation, it is unlikely the Senate Republicans would be able to draw enough support for the two-thirds vote necessary to override the veto.

Ferdon Decision

Assembly Bill 766 was created in response to the state Supreme Court’s July 14 decision in Ferdon v. Wisconsin Patients Compensation Fund. The jury in that case awarded $700,000 for noneconomic damages and $403,000 for future medical expenses to Matthew Ferdon in a medical malpractice case. The noneconomic damages award exceeded the statutory limit of $350,000, which, adjusted for inflation, stood at $445,775.

The Brown County judge in the case reduced the award to $410,322 and the Wisconsin Court of Appeals affirmed. The Supreme Court granted review and reversed in a decision by Chief Justice Shirley S. Abrahamson. Justice N. Patrick Crooks wrote a concurrence joined by Justice Louis B. Butler Jr. Justices David T. Prosser Jr. and Patience Drake Roggensack both wrote dissents, joined by each other and Justice Jon P. Wilcox.

The majority decision held that the noneconomic damages cap violated the equal protection clause. The court found that the statute unfairly distinguished between those who suffer more that the capped amount and those who suffer less.

Abrahamson wrote, “[N]o rational basis exists for treating the most seriously injured patients of medical malpractice less favorably than those less seriously injured.”

The court also found that there was no rational basis for the level at which the Legislature set the cap. Crooks’ concurrence indicated that damage caps on noneconomic damages could be constitutional, but that the existing cap was unreasonably low.

Prosser’s dissent indicated he did not believe the court had applied a rational basis test to the statute. He objected to the breadth of the decision, noting that damage caps will always undercompensate those who have suffered the greatest damages. He also challenged the notion that the rational basis test did not support the statute.

Legislature Approves New Cap

Rep. Curt Gielow (R-Mequon) headed a task force which created the current legislation. “I’m hopeful the governor will sign this, although early reports back to me indicate that he would have liked the financial limits to be higher,” Gielow told the Wisconsin Law Journal.

Gielow said the Legislature responded to the Ferdon decision by doing what the Supreme Court asked. The task force brought in actuaries to look at compensation for noneconomic damages, it looked at the records of court cases in Wisconsin and compared Wisconsin with other states that had caps in place.

The new legislation would cap noneconomic damages at $450,000 for adults and $550,000 for children.

“I felt we came up with what was a justifiable recommendation on these caps,” Gielow said.

Opponents of the proposed legislation challenge the review as being incomplete and the end result as too close to the previous cap that was struck down last summer.

David M. Skoglind of Aiken & Scoptur in Milwaukee, denounced the process used to create the new legislation and the speed at which it moved forward. Skoglind, president of the Wisconsin Academy of Trial Lawyers, indicated the task force should have sought feedback from a broader group of people, including those jurors who had served in cases where their verdicts exceeded the caps and individuals who had suffered significant injuries due to malpractice.

“The bill they passed was patently unconstitutional,” Skoglind said, noting that the $450,000 caps were very close to the $410,322, which the Supreme Court had struck down.

Given that each case deals with individual circumstances, Gielow said he did not believe talking with jurors about how they arrived at a figure “in something as amorphous as pain and suffering or the loss of companionship” would have provided better information than the actuarial studies included in the review.

Capping Justice

Those opposed to the legislation also see it as an instrument to cap justice, by denying juries the right to determine fair compensation for noneconomic damages.

“The justice system works and the Legislature should allow that process to work and allow juries to determine those damages,” Skoglind said.

Supporters of the legislation have noted t
hat juries are limited in a number of different areas when it comes to the decisions they can reach.

William R. Wick, of Nash, Spindler, Grimstad & McCracken LLP in Manitowoc, said, “We have caps on all kinds of things. We have scheduled injuries in worker’s comp. We have limitations on how much you can recover in wrongful death actions. There are certain areas where this is deemed to be important.”

Supporters of the legislation also view it as an important way to keep doctors who have viewed Wisconsin as a favorable place to practice due to the presence of the prior cap and the Wisconsin Patients Compensation Fund. WPCF protects doctors from excess exposure. Wick noted that the presence of a cap is an important element to help the WPCF determine its own level of exposure.

In the Ferdon decision, the court noted less than $1 of every $100 spent on health care in Wisconsin goes to medical malpractice costs. The court also observed that the WPCF has remained strong with and without the cap.

“The fund has flourished both with and without a cap,” Abrahamson wrote. “If the amount of the cap did not impact the Fund’s fiscal stability and cash flow in any appreciable manner when no caps existed or when a $1,000,000 cap existed, then the rational basis standard requires more to justify the $350,000 cap as rationally related to the Fund’s fiscal condition.”

Gielow, who is a physician recruiter, said perceptions are as important as reality when it comes to the decisions physicians make about where to practice.

“If the perception is that Wisconsin is unfriendly as a malpractice environment, that the premiums are high … the doctors tend to overreact to this,” he said. “The result is real, either they don’t come here to practice or they quit practicing early.”

Looking at the question of what happens if Doyle vetoes the legislation, Gielow said, they will have to consider what other messages the governor sends with the veto. The senator expressed concerns if the recommendation is for both sides to sit down and negotiate an acceptable level for caps.

“If we go to a higher number, we will have to justify it, or we won’t be able to satisfy the Supreme Court,” he said.

Tony Anderson can be reached by email.