The ISMA helps overturn two medical malpractice cases

The Indiana Court of Appeals issued rulings March 16 in two cases in which the ISMA had filed amicus curiae (friend of the court) briefs:

• Indiana Patient’s Compensation Fund vs. Winkle
• Indiana Patient’s Compensation Fund vs. Butcher

Both rulings were favorable to the ISMA and the Patient’s Compensation Fund (PCF).

In each case, the trial court had handed down three cap-level damage awards for one act of medical malpractice. The ISMA’s amicus briefs on behalf of Indiana physicians encouraged the Indiana Court of Appeals to reverse those decisions and set aside two of the three cap-level awards. The court did.

Know your state statute

The Indiana Compensation Act for Patients (INCAP) was enacted in 1975 as the first comprehensive patient compensation statute in the nation. It addressed the dilemma of soaring liability costs and the threat of impaired access to medical care.

INCAP included:

• A state-run insurance Patient’s Compensation Fund (PCF) to pay large claims, funded by an annual surcharge on health care provider malpractice insurance premiums

• A medical review panel to examine complaints for negligence

• A requirement for providers to have at least $100,000 in insurance, raised to $250,000 in 1999

• Limits of 15 percent on attorney fees for awards from the PCF

A key feature of the statute was a cap or upper limit on recoverable awards. The cap was set initially at $500,000. It was raised to $750,000 in 1990 and to $1.25 million in 1998. The 1998 change became effective July 1, 1999.

Winkle case
In 1999, a pregnant Lori Winkle developed Wernicke’s encephalopathy and lost her 17-week-old fetus. Lori and her husband sued for failure to properly treat her condition.

The health care providers settled for their maximum liability of $100,000.* On Oct. 18, 2005, Marion County Judge Thomas Carroll awarded three cap-level awards of $750,000: one to Lori for physical injuries and one each to Lori and her husband for emotional distress associated with loss of the fetus — for a PCF total of $2,150,000.

Because the child was unborn, Indiana law prohibited an additional wrongful death recovery for loss of a child.

In January 2006, the PCF appealed and the ISMA filed an amicus brief reminding the court of the purpose of the act and arguing the father was not a patient and not entitled to a separate cap. The PCF challenged the mother’s recovery of two caps.

The appeals court unanimously reversed the trial court and concluded the couple’s emotional distress damages had to derive from a “patient,” i.e., a live person.

They could not have separate caps because their unborn child was not a patient. Any emotional distress damages had to fall under Lori’s physical injuries cap.

The court set aside the two emotional distress caps, returning $1,500,000 to the PCF.

Butcher case
In 2003, Dorothy Butcher, 38 weeks pregnant, was involved in an auto accident. The hospital determined she was in the early stages of labor and transferred her to a second hospital for delivery by her regular physician.

The second hospital recognized fetal distress and did an emergency Cesarean section, initially with only local anesthetic. The child was not breathing when delivered, was resuscitated and transferred to a third hospital.

The child suffered extensive injuries and the parents terminated life support. They sued the first hospital for failure to diagnose fetal distress. The hospital settled for the maximum liability of $250,000.

On Feb. 27, 2006, Judge Carroll again awarded three cap-level ($1,250,000) awards: one for Dorothy’s physical and emotional injuries, one for her husband’s emotional injuries, and one for death of the child born alive. Total liability to the PCF was $3,500,000.

In July 2006, the PCF appealed, and the ISMA and the Indiana Hospital&Health Association filed a joint amicus brief. Like in Winkle, the ISMA and IHHA reminded the court of the purpose of the act and challenged the father’s separate cap. The PCF challenged Dorothy’s injuries and claims.

That court issued its opinion March 16 unanimously reversing the trial court. The court concluded the car accident prevented a normal delivery. Because she would have had an emergency C-section anyway, there was no evidence she suffered more physical injuries than she would have in the absence of malpractice.

The court also ruled the only victim of malpractice was the baby. Relying on Indiana Supreme Court precedent, the court concluded that because only one victim of malpractice existed, only one cap-level award could be recovered.

The court set aside the separate caps awarded to the parents, returning $2,500,000 to the fund.

Looking forward
Although neither case eliminates the possibility of future cases with multiple injury awards, they help fill some gaps in this part of the law.

Either party may request a rehearing or petition for transfer to the Indiana Supreme Court by April 16, Reed explained. “The ISMA will remain involved and provide updates on any further appeals,” said Julie Reed, ISMA legal counsel.

If you have questions about the cases, contact Reed at the ISMA. Find copies of the opinions>>