Legislators OK bill to raise malpractice damage caps — despite trial attorneys’ opposition

A bill to raise certain medical-malpractice damage caps could increase insurance premiums for health-care professionals.
POSTED BY: ED SEALOVER APRIL 12, 2024

As business and trial-attorney groups continue their staredown over a potential ballot battle on lawsuit damage caps, Colorado legislators are advancing a bill that would raise medical-malpractice noneconomic damage caps for the first time in 21 years, to $500,000.

Because of the pending election fight, Senate Bill 130, sponsored by Democratic Sen. Kyle Mullica of Federal Heights and Republican Sen. Perry Will of New Castle, is creating unusual dynamics around it. Insurers and physician groups who will see liability premiums rise because of the bill are pushing for the change, while plaintiffs’ lawyers and people injured by malpractice are asking legislators to reject the attempt to boost damage caps 67% over the next five years.

Sen. Dylan Roberts, a Frisco Democrat who voted along with other members of the Senate Judiciary Committee to advance SB 130 by a 4-1 margin to the Senate floor late Wednesday, seemed to exemplify the confusion surrounding the testimony on the bill. An astonished Roberts asked several opponents — all of whom spoke about the unfairness of the existing caps — why they would oppose a boost in the ceiling for damages and then said he couldn’t in good conscience vote against the bill after hearing their stories.

“You all probably do deserve more than $300,000 … Is 500,000 the right number? I don’t know. Maybe not. Probably not,” Roberts told opponents who for several hours had asked the committee to reject the bill so they could push a ballot initiative eliminating caps. “But $500,000 is more than $300,000. And we’re here to vote on Senate Bill 130. We’re not here to opine on a ballot measure … I can’t justify voting against a bill that would help Coloradans get more for their terrible loss.”

Complexities around Senate Bill 130

But many observers said the choices were not that simple, despite SB 130 being just a two-and-a-half-page bill that takes one action.

The proposal would raise the current $300,000 cap for medical malpractice noneconomic damages — money given for things like emotional suffering and loss of life enjoyment, rather than the easily waivable $1 million cap on economic damages — to $500,000. It would do so by increasing the cap $40,000 annually from 2025 to 2029, at which time proponents said the awards ceiling would sit in the middle of the pack for the 26 states with such a cap rather than near the bottom.

Mullica and Will, along with the COPIC physicians’ insurance provider and a litany of doctors, said they believe it’s fair that the caps should increase for the first time since 2003 and that they arrived at the $500,000 figure after calculating inflation for the past 21 years. But from their opening statements, the sponsors acknowledged that SB 130 is a reaction to a ballot measure proposed Coloradans for Accountability, a Colorado Trial Lawyers Association-supported group, and would stabilize rather than disrupt liability insurance.

Dueling ballot measures

That ballot measure, which continues to go through the process needed to begin collecting signatures, would eliminate all noneconomic damage caps on catastrophic injury and wrongful death lawsuits, allowing juries to calculate what defendants will owe. The group also is pushing a second ballot measure that would open more patient records in lawsuit claims and essentially eliminate the confidential peer-review process by which physicians can discuss treatments and ways in which they may have improved upon them.

In response, Coloradans Protecting Patient Access — a coalition of hospitals, physician groups, liability insurance companies and business organizations — has filed a pair of ballot initiatives seeking to limit what plaintiffs’ lawyers can collect from damages. One would cap attorney’s fees for personal-injury and wrongful-death suits at 25% of the money awarded to clients, and the second would require attorneys to disclose all litigation expenses that clients are responsible for paying and cap expenses at no more than 10% above the costs estimated for them at the beginning of the cases.

Dr. Gerald Zarlengo, COPIC’s CEO, acknowledged he expects raising medical-malpractice noneconomic damages caps to $500,000 will hike liability-insurance premiums between 16% and 38%, depending on the frequency of claims filed against practice specialties. But without any caps whatsoever, premiums will skyrocket, causing physicians to retire early, move to other states or even decline to perform complex procedures for fear that lawsuits will become much more attractive if something goes wrong, supporters of the bill said.

“The caps work. The caps keep damages predictable, which keeps premiums down,” said Kendra Beckwith, a partner with Lewis Roca who was representing Coloradans Protecting Patient Access. “What these provisions create is a stable and predictable liability landscape, which retains and attracts physicians.”

Why opponents want to nix medical-malpractice caps

Opposing SB 130 was a long line of patients sharing emotional stories about alleged medical malpractice leading to their inability to walk, loss of their limbs and the premature deaths of family members — all saying the existing caps devalue life in Colorado. One after another, they rejected the assertion that an increase in caps would bring them the relief they seek, saying instead that the right thing to do is to allow state residents to repeal caps in the worst cases altogether at the November ballot.

Jim Puga, an attorney with Leventhal Puga Braley P.C., said even $500,000 caps are too low for attorneys to afford to be able to take on complex medical-malpractice cases that involve significant time and research, unless they are doing so pro bono. Many people who testified to the committee over a several-hour period said they could not seek remedy because no one would take their case, though a few said they ended up finding representation and typically reached some settlement.

Sen. Kevin Van Winkle, R-Highlands Ranch, asked several witnesses why, even under those circumstances, they would oppose caps going up and allowing for the possibility of higher damage awards when cases are taken. Ned Deakins, also an attorney with Leventhal Puga Braley, said he believes that passing the bill to boost caps could be part of a strategy aimed to show some progress and make it harder for attorneys to remove caps at the ballot.

“Claims aren’t going to increase with this bill. Adding these small, incremental damages is not going to increase claims,” Puga said. “With all due respect, you’re not giving them anything. Our intent will be to have the people of Colorado make that determination through a ballot measure to eliminate caps.”

“A value on human life”

Sen. Julie Gonzales, the Denver Democrat who cast the only “no” vote on SB 130, attempted to amend the bill to raise the damage cap to $5 million right away, but the rest of the committee balked at that effort.

Gonzales also asked Mullica, an emergency-department nurse, what he believed the value of a human life to be.

Mullica replied that the answer must consider the ability for Coloradans to access care in order to preserve their health and lives. If elimination of caps leads to a reduction in practicing doctors, particularly in rural areas or fields like neurology and obstetrics that involve more complex procedures that could lead to lawsuits, everyone suffers, he said.

“You can’t put a value on a human life,” he said. “But the fact of the matter is there is a system that, when there is harm, determines the damages that loved ones can seek.”

A recent study done for the American Property Casualty Insurance Association and the Colorado Chamber of Commerce estimated that removal of caps could cost the state $2.1 billion in annual economic impact. Coloradans for Accountability has said the methodology of the state was flawed.

Next for medical-malpractice caps bill

Colorado state Rep. Kyle Brown speaks to the Colorado Chamber of Commerce Health Care Council on Thursday.

After receiving bipartisan support from the committee, SB 130 is likely to pass the Senate, which is the more moderate of the two legislative chambers. But whether it can make it through the more progressive House — and, particularly through the House Judiciary Committee, which has passed several bills over the past two sessions to increase plaintiffs’ rights — remains a question.

Rep. Kyle Brown, the Louisville Democrat sponsoring SB 130 in his chamber, told the Colorado Chamber of Commerce Health Care Council on Thursday that his goal is to find a legislative solution rather than letting statewide voters try to parse a complex subject on what will be a packed ballot, he said.

“I’m really hopeful we can come to some agreement with CTLA because it’s too big a policy and too important to try to quote-unquote negotiate this at the ballot,” Brown said, suggesting that he’s willing to make further compromises in the bill. “It would behoove all of us to come to the table to work out an agreement.”