An Iowa City jury awarded a local couple $98 million in damages last November because of negligence by a doctor at the OBGYN Associates of Iowa City after a physician hurt a newborn with improper use of medical tools during delivery.

The verdict, handed down after a two-week trial in late October 2022, is believed to be one of the largest jury verdicts in a medical malpractice lawsuit in Iowa history, according to the couple’s lawyer.

The large verdict caused the clinic to file for bankruptcy after its malpractice insurance refused to pay the large settlement that exceeded its coverage.

This case is an example of what insurance experts call “nuclear verdicts,” which are large verdicts that advocates for caps say can raise insurance prices in surrounding areas.

The Iowa House and Senate are considering legislation to add caps on medical malpractice and commercial vehicle liability. Each chamber has its own version of the legislation moving through the legislature.

The House’s versions are both eligible for debate this week, and the Senate is considering bills on the committee level this week.

Bill would cap ‘pain and suffering’ awards at $1 million

Rep. Ann Meyer, the chair of the House Health and Human Services Committee and a Republican from Fort Dodge, led a discussion of House File 102 during a Health and Human Services Committee meeting on the bill.

The bill would place a total cap of $1 million on non-economic damages for claims against health care providers. Current law sets a cap of $250,000 for non-economic damages unless a jury finds that the cap would not compensate the patient.

The new law would place a hard cap of $1 million on judgments larger than $250,000 where previous claims that exceeded the $250,000 cap were unlimited.

The bill, however, does not cap economic damages that can be recovered against a defendant. The bill also does not cap damages that are able to be recovered if the negligence is of “actual malice” or actions that are intended to cause pain and suffering.

Meyer said doctors in Iowa face high medical malpractice insurance premiums, driving some doctors out of the state when deciding where to practice after residency. Meyers said the bill would put Iowa on a level playing field with the surrounding states.

Several states surrounding Iowa placed caps on non-economic damages in medical malpractice liability awards, apart from Illinois and Minnesota.

However, two bordering states have lower insurance premiums — South Dakota and Minnesota. Minnesota, which doesn’t have caps on medical malpractice judgments, has the lowest cost for malpractice insurance, at just over $12,000 a year.

Iowa’s average cost for medical malpractice insurance was around $22,000 in 2022 and has stayed stable for the past decade, according to data from the Medical Liability Monitor. Iowa also has some of the lowest medical malpractice insurance costs in the country, placing fifth in the nation.

Iowa also has the fewest number of medical malpractice lawsuits per capita in the nation. With only 15.2 malpractice cases per 100,000 residents in 2015, Iowa places 42 in the number of lawsuits per capita, according to data from the National Practitioners Data Bank.

There were only 15 medical malpractice lawsuit verdicts in 2021, with seven of the verdicts in Polk County, according to data from the Iowa Judicial Branch.

Opponents say insurance industry is at fault

Opponents of the bill say the insurance industry is more to blame for nuclear verdicts than Iowa’s legal climate, which experts say is favorable to doctors in liability cases.

Darin Luneckas, a University of Iowa College of Law Alumni and legal counsel for the Iowa Association of Justice, said in an interview with The Daily Iowan that these caps don’t benefit doctors — they only help insurance companies.

“That’s where the genesis of all this is really coming from, is from the insurance companies that dominate the collection of premiums from doctors and nurses and clinics all over the state,” Luneckas said. “They want to pay less. They want to keep more, and it’s not for the doctors.”

Luneckas also said the caps are unconstitutional and limit Iowans’ rights to have their claims heard by a jury of their peers to decide just compensation for a wrong.

“We’re going to put the constitutional right to a jury trial; we’re going to put that on the back burner,” he said. “And we’re going to circumscribe Iowan’s rights to get into the court system and have their peers decide these cases so that the insurance companies can get more wealthy.”

Nine states have declared caps on medical malpractice awards unconstitutional.

Capping commercial vehicle liability claims for non-economic damages at $1 million

Under a bill advanced out of the Iowa House Judiciary Committee last week, employers wouldn’t be culpable for negligence in the hiring process of commercial drivers. The bill would also cap the amount of non-economic damages that could be awarded in suits against a driver’s employer to $1 million.

This bill has had similar versions advance in both chambers, and the bill could see floor debate later this week.