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Did Iowa lawmakers fall for a scam when they capped medical malpractice awards?

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Did Iowa lawmakers fall for a scam when they capped medical malpractice awards?

Nov 27, 2023 | 4:21 pm ET
By Kathie Obradovich
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Did Iowa lawmakers fall for a scam when they capped medical malpractice awards?
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Gov. Kim Reynolds signed new medical malpractice liability limits into law Thursday, Feb. 16. (Photo courtesy the Office of the Governor of Iowa)

A lawsuit filed last week is claiming that an insurance company snookered the Republican majority in the Iowa Legislature into significantly curtailing Iowans’ ability to collect reimbursement if they are a victim of medical malpractice.

While lawsuit filings are merely allegations – and these are not yet proven in court — the idea that Iowa lawmakers could be swayed by a single case to change the law is all too plausible. Iowa lawmakers are suckers for a sob story — especially when it comes from wealthy industries that love to donate to political campaigns. They often change laws based on some narrow, anecdotal case — and sometimes it doesn’t even need to be an Iowa tale.

The lawsuit was filed in federal court by a Johnson County obstetrics/gynecology clinic against its insurance carrier, MMIC/Constellation, after the clinic lost $97.4 million in a malpractice case. The new lawsuit claims the family who filed the malpractice case and the clinic wanted to settle out of court for a lower amount – but the insurance carrier balked.

The lawsuit alleges the reason was to create the sort of “nuclear verdict” that would persuade the Iowa Legislature to pass legislation to limit malpractice awards and save insurance carriers billions.

The case was indeed cited as lawmakers argued in favor of legislation that would cap noneconomic damages in malpractice cases at $1 million for clinics and doctors and $2 million for hospitals. The cap applies to damages such as pain and suffering, emotional distress, loss of companionship of a family member and the like.

Opponents, however, including a few Republicans, argued the cap was too low, especially in cases involving children whose loss is impossible to reduce to cold, hard cash.

The eye-popping jury award (later reduced by the court to $75.6 million) helped counter arguments raised by defense attorneys over the past few years that Iowa was not experiencing the giant jury awards that some other states had seen.

“MMIC/Constellation had been attempting to get a hard non-economic damages cap put in place in Iowa for many years … MMIC/Constellation knew that the story of a $97 million verdict and three female OB/GYN physicians having to file bankruptcy and close their practice because of a large jury verdict, would give MMIC/Constellation what it needed to convince Iowa lawmakers to vote to pass the cap,” the lawsuit states.

Now, it’s possible the GOP majority could have muscled the bill through this year without a record verdict. The insurance industry scored another win this year with legislation reducing the liability of trucking companies whose drivers injure or kill someone in a crash. Iowa has not had a record of “nuclear” verdicts in commercial vehicle crashes.

Tort reform is the kind of issue that looks great on the scorecard of Republican lawmakers who assume all trial lawyers are Democrats, even though their injured and bereaved clients might be of any political persuasion. Conservative think tanks have been pushing “model” tort bills around the country for years.

Still, it’s easy to imagine that Iowa lawmakers would have enacted malpractice damage caps years ago if they’d had that record verdict as an excuse. Nick Rowley, the lawyer for Obstetric and Gynecologic Associates of Iowa City and Coralville who filed the new lawsuit, told Iowa Capital Dispatch’s Clark Kauffman last week that he will dig into the insurance company’s emails looking for evidence of their intent.

“A jury is going to see what happened. It’s right there, it’s right out in the open, because that’s how bold they are in Iowa,” Rowley said. “And wait until I get all their emails and their text messages and everything. We’re going to look at everything and leave no stone unturned.”

I hope we get to see some of those emails. But even if the clinic wins its lawsuit, it won’t change the law in Iowa. That would take a major change in the makeup of the Iowa Legislature.

The best we can probably hope for is that Iowa lawmakers look so foolish that they’ll hesitate to take this kind of bait next time.

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