The New York State Medicaid Reform Team's proposal to set a $250,000 cap on pain and suffering awards in medical malpractice cases spurred impassioned debate and headlines before it was dropped from the budget this week.
Even if the cap won't be imposed as part of this year's budget, the issue of whether to pass a cap won't go away.
Similar proposals are advanced every year, as the centerpiece of a discussion of tort reform, but little attention has been paid to the fact that such statutes have been struck down in other states as unconstitutional.
Over the past year alone, statutes setting caps have been found to be illegal by courts in Florida, Georgia, Illinois and Louisiana.
The Georgia cap on non-economic damages was struck down last year in Atlanta Oculoplastic Surgery P.C. v. Nestlehutt after being enacted as part of Georgia's Tort Reform Act of 2005.
The courts found the Georgia cap violates the state constitution's guarantee that the "right to trial by jury shall remain inviolate. "
Meanwhile, in Illinois, in Lebron, a Minor v. Gottlieb Memorial Hospital, the courts found non-economic damage caps violate the constitutional separation of powers.
In other states, courts have ruled caps are illegal, although it remains to be seen whether those verdict will be upheld by higher courts.
In Louisiana, in Oliver v. Magnolia Clinic, the Louisiana Medical Malpractice Act, which capped general damages at $500,000, was found to be unconstitutional.
Other caps were struck down over the years for similar reasons in states such as South Dakota where in Knowles v. United States, the courts found a $1 million medical malpractice compensatory damage cap violates substantive due process, but a non-economic damage cap has been upheld.
In North Dakota, in Arneson v. Olson, as far back as 1979, the courts found that a $300,000 limit on damages recoverable in medical malpractice actions violates state and federal equal protection guarantees.
The state in 1995 passed a non-economic cap.
Joanne Doroshow, executive director of the Center for Justice and Democracy in Manhattan, said it's far from clear whether the California law will prove consistent with that state's constitution.
In addition to the constitutional question, the debate about caps extends to whether they would be effective.
"We studied the impact in other states of pain and suffering on our awards and did a statistical evaluation," said Ed Amsler, a vice president at Medical Liability Insurance Corp., the state's biggest medical malpractice insurance carrier. "With a $250,000 cap on pain and suffering, physicians' rates would be reduced by 24 percent."
But a recent study by Americans for Insurance Reform titled "Medical Liability and Malpractice Insurance in New York State" found medical malpractice rates primarily reflect business practices of the insurance industry, not the amount of jury verdicts.
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