Mills: Updates to Indiana’s Medical Malpractice Act are here

Mills

By Courtney David Mills

In 2016, the Indiana Legislature made significant changes to Indiana’s Medical Malpractice Act to take effect on July 1, 2017, giving insurance companies and health care providers time to adapt and implement the changes. Most of the changes involved increasing fees paid by medical providers, but a potentially significant change could expedite the administrative phase of a medical malpractice case. Below are the primary changes affecting health care providers.

1. Increase to Indiana’s cap on damages

Indiana is one of the few states that has a statutory cap on all damages in a medical malpractice case. The Indiana MMA cap on damages has three key amounts that are relevant to medical providers. The first amount is the discounted primary liability cap (i.e., the amount a medical provider can typically pay to resolve a case by settlement). Currently, that amount is set at $187,001. The second amount is the maximum primary liability cap, which is the maximum liability for an individual health care provider (whether paid as a cash settlement or in response to a verdict at trial). This amount is currently set at $250,000. The third amount is the total cap on all damages (i.e., the maximum amount a patient can receive for an act of malpractice). Currently that amount is set at $1.25 million.

In a hypothetical case involving significant damages, a plaintiff will typically seek a settlement of $250,000 from the medical provider’s insurance company. (This amount is typically set up as an annuity with a present cost of $187,001 or a cash payment of $250,000.) After a plaintiff receives $187,001/$250,000 from the health care provider, he or she can petition the Indiana Patient’s Compensation Fund for up to an additional $1 million in damages. The PCF is funded by annual surcharges paid by all qualified health care providers in the state, and on average, pays approximately $100 million in excess damages per year. In the coming years, these amounts will increase (see chart).

2. Increase of panel fees paid to members of medical review panels

A medical review panel is similar to a peer review committee established to review a medical malpractice claim before the Indiana Department of Insurance. A medical review panel consists of three health care providers (typical of the same specialty as the defendant health care providers); and one attorney (the panel chair). The physician members of the panel are charged with reviewing the evidence in the case and rendering an opinion regarding the applicable standard of care. The panel chair is selected by agreement of the parties and is a non-voting member of the medical review panel charged with ensuring the process runs smoothly. The physician members of the panel are paid a flat fee of $350, but that amount is set to increase to $500. The panel chair is typically paid a flat fee of $2,000, but that amount is set to increase to $2,500.

3. New section regarding timeliness

Effective July 1, the Medical Malpractice Act will mandate all parties follow the timelines set forth under the MMA unless there is a mutual written agreement between the parties. In other words, dilatory conduct will no longer be tolerated unless the parties consent to such delays.

Conclusion

The recent updates to the MMA are the most significant changes since 1999. Several groups supported by health care providers contend that the recent updates will stave off constitutional challenges to the MMA (which have become increasingly prevalent in recent years). At very least, the updates demonstrate the Legislature’s intent to periodically review the MMA and to update it accordingly. As these updates are implemented in the coming years, we will see whether the effects are helpful or harmful.•

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• Courtney David Mills is an associate at Riley Bennett & Egloff LLP, where he concentrates his practice in medical malpractice defense. The opinions expressed are those of the author.