Oliver "Jackson" Schrumpf

 The 3^rd Circuit Court of Appeals has again ruled that the state’s medical malpractice act is unconstitutional because it fails to provide an adequate remedy to victims.

The defendants are expected to ask the Supreme Court to review the appellate court’s decision.

Oliver “Jackson” Schrumpf, a Sulphur attorney who represented the plaintiffs, said he cannot hazard a guess as to what the Supreme Court will do, but he thinks the court should rule in his client’s favor.

Setting aside the state’s $500,000 damages cap would not cause problems for insurers or most providers, Schrump said. In states without malpractice caps, the most common policy sold covers $1 million per claim and $3 million in claims per year.

“Our actuarial evidence, based on the National Practitioner Data Bank, said the average payout in medical malpractice from 2004-07 was $284,000,” Schrump said. “Ninety-seven percent of all medical malpractice claims are less than $1 million. Less than one-tenth of 1 percent exceed $5 million.”

However, Dr. Thomas H. Grimstad, president and chief executive officer of Louisiana Medical Mutual Insurance Co., said losing the cap would devastate healthcare providers and their patients.

“Caps lead to predictability and a stable medical professional liability insurance market.  Eliminating the cap will have an adverse effect on the affordability of medical malpractice coverage,” Grimstad said in a prepared statement. “If malpractice coverage is unaffordable, access to healthcare will be adversely affected since it will be more difficult to attract and retain healthcare providers in our state.”

Grimstad said providers relied on the cap in deciding what coverage they needed for medical professional liability.

“If the cap is found unconstitutional, doctors, nurses and other healthcare practitioners will find their personal assets at risk despite the fact that they relied on and fulfilled the requirements of the Medical Malpractice Act,” Grimstad said.

Texas residents faced a crisis in access to care before the state implemented a malpractice cap, he said. Since the cap, the crisis has dissipated and the number of healthcare practitioners has dramatically increased.

Schrumpf said insurers already have medical malpractice caps.

“It’s called a policy limit,” Schrumpf said.

And Louisiana Medical Mutual, known as LAMMICO, has been selling doctors policies that provide up to $3 million in coverage for years, he said. In Arkansas, where med mal rates are generally lower than Louisiana, LAMMICO sells policies that have no cap.

Under Louisiana’s system, malpractice claims, not including future medical expenses, are capped at $500,000. Providers are responsible for the first $100,000 and generally buy coverage through insurers. The Louisiana Patient’s Compensation Fund (PCF) is responsible for the next layer of coverage, $400,000.

The state Legislature passed the cap in 1975. Schrumpf and other critics say inflation has eaten away at the cap, reducing its value to less than one-third of its original level.

PCF chairman Clark R. Cossé III agreed that the most dangerous thing for all providers would be the Supreme Court ruling that the cap is unconstitutional.

If that happened, physicians, hospitals, nursing homes – basically everybody – would be put at risk in lawsuits where damages would be unlimited, Cossé said.

“We would have chaos in Louisiana, and we would have a crisis,” he said.

The state would then have to address medical malpractice through legislation or possibly through a constitutional amendment, Cossé said.

“We could avoid all that if we would come up with something that we can afford and that addresses the crucial issue, which I think is economic damages,” Cossé said.

There is some room for maneuvering, Cossé said. The PCF has had a couple of good years and reduced rates for a second straight year; LAMMICO also reduced its rates last year.

Raising the cap on economic damages could be handled by the state Legislature and an increase wouldn’t destroy the system, Cossé said. The medical community doesn’t like that idea, however, and trusts that the Supreme Court won’t overturn the cap.

Cossé said he is trying to convince the medical community that it’s better to design a system they, insurers and the PCF can live with rather than to leave that task to the courts.

He is concerned that a court-ordered system may not address the actuarial and insurance concerns.

Cossé said a 3^rd Circuit decision that nurse practitioners were not covered by the cap also poses a threat.

Louisiana’s Medicaid population is expected to drastically increase in 2014 under federal health insurance law, he said. Those patients will rely more and more on “mid-level practitioners” as the state’s shortage of primary and family care doctors worsens.

If mid-level practitioners can’t afford insurance, that shortage will become more acute, leaving Louisiana in an untenable situation, he said.

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