Medical malpractice caps, like MICRA here in California, are the darlings of the anti-tort/anti-patient rights groups (i.e. insurance companies). When they were first introduced, in some cases more than thirty years ago, the caps were fair and in line with the judgments that had been received.
However, what no one thought about when they passed laws like MICRA in the 1970s was that inflation would occur. Costs of living increased and the buying power of a dollar went down. So what was once a somewhat fair cap, in California $250,000.00, is now no longer the deal it was supposed to be that would protect consumers, serve as a deterrent to doctors, and keep insurance companies from either withdrawing from the market entirely or from raise premiums to a level that no doctor could afford.
Many doctor groups and the insurance industry insist that the medical malpractice caps on non-economic pain and suffering have worked and have decreased premiums allowing doctors to practice in more places without having as much economic pressure on them. However, there is evidence which indicates that the only beneficiaries of the caps are the insurance companies who continue to insure doctors who should not be practicing. In some cases, decreases in premiums only occurred after the states began taking a more serious approach to regulating the insurance industry.
One of the main criticisms of many medical malpractice cap laws, many of which were based on the California MICRA statute, is that they do not take into account for inflation. As far as I know, no one had been successful at challenging a MICRA style cap.
That is until now. In Louisianna, attorney Oliver J. Schrumpf represented a family who filed medical practice suit for the wrongful death of a relative. This started back in 1994, and has been going through the stages of appeals since approximately 1999. The appellate court found that the law, although valid initially, was now running afoul of a provision of the Louisiana state constitution which guarantees its citizens an adequate remedy.
They noted it was no longer adequate because the $500,000 cap adopted in 1975 was now equivalently the worth of approximately $146,435 to $160,000 in today’s dollars. Conversely, if the cap had kept pace with cost of living and inflation, the cap should now be adjusted to $1.6 to 1.7 million dollars. Now the ruling does not strike down the entire statute, only the portion dealing the amount that the non-econmic damages are capped.
Now, since the ruling was based on a portion of the Louisiana constitution, I do not expect that it will start a tidal wave of change in the MICRA states. However, I'm sure that some enterprisng plaintiff's lawyers will start chipping away again until they are able to correct this inequity that we have built into the system.