Senate votes to raise medical malpractice payment cap

Medical malpractices victims may be able to receive more money now that the Indiana Senate has passed a proposal to increase the compensation cap for the first time in nearly 18 years.

The measure would increase the current $1.25 million limit to $1.65 million next year and then to $1.8 million in 2019. The bill passed 49-0 Tuesday and heads to Gov. Mike Pence’s desk for consideration.

The original proposal imposed incremental increases every four years until 2031 to keep up with inflation, but it saw backlash from medical associations that said doctors would not be able to absorb the costs because their malpractice insurance premiums would also rise.

“It was extremely important for the General Assembly to pass this legislation because the current cap hasn’t been updated in nearly 20 years, making our entire medical malpractice system vulnerable to a constitutional challenge,” Sen. Brent Steele, R-Bedford, said in a written statement.

Multiple parties, including the Indiana State Medical Association, Indiana Hospital Association, Indiana Health Care Association and Indiana Trial Lawyers Association came to agreement on the bill after months of discussions, Steele said.

Steele had sought a “compromise” among the groups this year after a similar bill failed last year. Lawmakers studied the bill in a summer study committee before the session started. This was Steele’s last bill, as he is retiring this year.

The Indiana Hospitals Association said it was pleased that the parties came to an agreement on the bill, though executive vice president Brian Tabor said the group supported going further to increase the caps than was ultimately approved.

“These are modest updates that I think will strike that balance between the interests of patients and providers but will still make Indiana a very attractive place to practice medicine,” Tabor said.

Senate Republicans were in a rush to increase the cap because they feared it would ultimately be ruled unconstitutional. Illinois’ Supreme Court struck down a similar law in 2010, and they’ve also been ruled unconstitutional in at least five other states.

It is unclear if Pence will sign the bill.

"The governor will review the legislation when it reaches his desk and make a decision,” Pence’s spokeswoman Kara Brooks told IBJ.