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Court of Appeals strikes down cap on noneconomic damages

The Wisconsin Medical Society expressed its extreme disappointment yesterday regarding a Wisconsin Court of Appeals’ decision that strikes down Wisconsin’s cap on noneconomic damages in medical negligence actions. Left unchecked, the decision in Mayo v. Wisconsin Injured Patients and Families Compensation Fund (IPFCF) could destabilize Wisconsin’s successful medical liability environment and endanger patients’ access to high-quality, affordable care.

Currently in Wisconsin there is no limit on the total economic damages—e.g., medical expenses and lost wages—recoverable in a medical liability case. However, state law limits noneconomic damages—such as pain and suffering and loss of companionship—to $750,000. This cap is part of Wisconsin’s comprehensive medical liability system, which also includes mandatory insurance coverage and participation in the IPFCF. Because the IPFCF pays claims that exceed $1 million, this system guarantees Wisconsin patients the ability to recover unlimited economic damages awarded by the jury as well as noneconomic damage up to $750,000—unlike other states where a patient’s ability to recover damages is limited to the amount of insurance a physician or hospital carries.

In Mayo, the jury awarded the plaintiff and her husband approximately $25.5 million in damages, including $16.5 million in noneconomic damages. The trial court found that Wisconsin’s cap on noneconomic damages was not unconstitutional, but refused to apply the cap under the circumstances, believing it would too unfairly reduce the plaintiffs’ recovery.

The Society has been a strong proponent of the cap and filed an amicus brief jointly with the American Medical Association and the Wisconsin Hospital Association in the Wisconsin Court of Appeals. However, on Wednesday the Court struck down the cap as a whole. The Court explained that the cap establishes two classifications of claimants: those who are fully compensated and those who are partially compensated. Relying heavily on the Wisconsin Supreme Court’s 2005 decision in Ferdon v. IPFCF, which struck down the previous $350,000 cap, the Court found the cap violates the equal protection rights of severely injured patients.

When the current cap was adopted in 2006, the legislature cited multiple rationale, studies and experiences in other states. But despite a legal presumption of constitutionality and a requirement only that the cap be rationally related to a legitimate purpose—such as protecting Wisconsin citizens’ access to high-quality, affordable health care—the Court of Appeals found the legislature’s rationales were unsupported or failed to adequately justify the cap as a whole.

The Court also characterized the amount of the cap as arbitrary, despite explanation by the legislature that it selected $750,000 based on comparison to other states, studies demonstrating the effectiveness of caps at differing levels and the goal of balancing adequate compensation for claimants with preserving affordable and accessible health care for all Wisconsin citizens.

“This decision endangers the long-term solvency of the Injured Patients and Families Compensation Fund and its ability to adequately compensate patients, and incentivizes attorneys to file questionable cases in hopes of astronomical jury awards seen in other states without caps,” said Society President Noel Deep, MD, yesterday in this press release.

It is expected that the IPFCF will petition the Wisconsin Supreme Court to review and reverse the Court of Appeals’ decision in the coming weeks.

“We look forward to further opportunities to explain the importance of the cap to the stability of Wisconsin’s medical liability environment and its benefits for all Wisconsin patients as this case progresses,” added Dr. Deep.

For more information, contact Society General Counsel John Rather, JD.

Back to July 6, 2017 Medigram