Medical Malpractice By: Edward J. Aucoin, Jr. Hall, Prangle & Schoonveld, LLC Chicago Senate Bill 475 More Than Simply Caps on Non-Economic Damages On May 30, 2005, the Illinois General Assembly took another shot at reforming medical malpractice liability by passing Senate Bill 475. Almost immediately, the hallways of local courthouses were full of conversations, and sometimes arguments, regarding the proposed caps on non-economic damages under that bill. While the proposed caps on damages received the spotlight on the local airwaves, Senate Bill 475 includes reforms to the medical malpractice system that extend beyond a limitation on non-economic damages. In fact, Senate Bill 475 includes reforms aimed at medical malpractice litigation, the discipline of physicians by the State Medical Disciplinary Board, and the regulation of medical liability insurers. This article will concentrate on the medical malpractice litigation reforms included in Senate Bill 475 and how they may affect the day-to-day practice by attorneys in this area. Senate Bill was submitted to Governor Blagojevich on June 29, 2005, thereby allowing him 60 days thereafter to either sign, veto or amend the document. Non-Economic Damages Caps The section of Senate Bill 475 that garners the most attention among attorneys and the general public relates to caps on non-economic damages in medical malpractice cases. Senate Bill 475 amends the Code of Civil Procedure to add Section 2-1706.5, entitled, Standards for Economic and Non- Economic Damages. Under that section, judgments entered against a hospital, its personnel, or hospital affiliates for non-economic damages are limited to $1 million per claim. Judgments in that same action against a physician, that physician s business or healthcare professionals are limited to $500,000. (735 ILCS 5/2-1706.5) These limitations apply to the individual action, regardless of the number of plaintiffs involved. For instance, only $500,000 in economic damages can be awarded in a judgment against a single physician defendant for wrongful death, even if there are three separate plaintiffs who have brought the action. Section 2-1706.5 also mandates that the jury verdict forms be drafted as to allow for specific awards of damages for economic loss and non-economic loss. The jury is not to be informed of these caps on non-economic damages. Section 2-1706.5 also creates a presumption of economic damages for a plaintiff who earns less than the annual average weekly wage as determined by the Illinois Workers Compensation Commission. 735 ILCS 5/2-1706.5(b). This section clearly addresses the homemaker arguments forwarded by the plaintiff s bar during debate over the bill, where a stay-at-home caregiver or minimum wage employee would presumably have little or no future wage loss claim. Under this section as provided, a jury may award past and future lost income awards based upon a plaintiff s Page 1 of 5
actual pay or upon the statewide average weekly wage at the time that the action was filed, which was $788.99 per week for the first half of 2005. It will be interesting to see how this amendment affects the value of household services component present in so many economic reports. The $1 million cap on non-economic damages for hospitals applies to the hospital s personnel and affiliates as well. Therefore, the naming of nurses, residents and other employees of the hospital individually would not result in any additional recoverable non-economic damages in the same action. Likewise, the $500,000 cap against physicians includes their corporate entities, thereby denying two recoveries of the limit if the physician and his group are named separately. The section is silent as to a hospital s liability for non-economic damages when the sole basis of liability forwarded against it is apparent agency. Subsection (a)(1) of Section 2-1706.5 refers to any award against the hospital, of which, arguably, apparent agency liability would be included. If this is true, can a plaintiff recover $1.5 million in non-economic damages against a hospital and an independent physician under apparent agency, while only recovering $1 million in non-economic damages when the physician was actually an employee of the hospital? This result seems somewhat inequitable, since plaintiff s apparent agency claim and the resulting judgment presume the physician to be an agent of the hospital. Therefore, future reviewing courts will have to determine if a finding by the trier of fact that the physician is an apparent agent of the hospital transforms that agent into hospital personnel under Section 2-1706.5(a)(1). The I m Sorry Rule Senate Bill 475 also amended Section 8-1901 of the Code of Civil Procedure, in that it added limited protection for a healthcare provider s expression of grief, apology or explanation to the patient about the care at issue. 735 ILCS 5-8-1901(b). Under that subsection, any expression of grief, apology or explanation, including the words I m sorry, about an inadequate or unanticipated treatment or care outcome that is provided within 72 hours of when the provider knew or should have known about the potential cause of such outcome is not admissible as evidence in any case. The Illinois Legislature follows the lead of several other states, which have hypothesized that an apology from the physician or health care provider reduces the likelihood that the patient will bring suit for the alleged negligent actions. Subsection (b) creates a discovery rule by including the qualification that the expression be made within 72 hours of when the healthcare provider knew or should have known of the potential cause of the injury. Therefore, the rule would appear to be based upon the subjective knowledge of the provider rather than the reasonable person standard. The inclusion of the word explanation as a type of expression covered under this subsection increases the breadth of that section s coverage to include discussions beyond mere apologies, and arguably includes details of the procedure or treatment at issue. This amendment has no effect on the discoverability and admission of medical records or other materials prepared for the medical chart. The Sorry Works! Pilot Program Senate Bill 475 also establishes the Sorry Works! Pilot Program, which is open to one hospital in the first year of the program s operation. That hospital must be located in a county with a population greater than 200,000 and which is contiguous with the Mississippi River. Under the program, the hospital and physicians involved in the care at issue would promptly acknowledge and apologize for mistakes and patient care and promptly offer fair settlements to those patients. The hospital initially participating in the program is required to submit a report to an oversight committee created by the bill, which details its costs in defending human error malpractice verdicts for the preceding five years. The committee determines the average yearly cost by the hospital and should the actual cost incurred by the participating hospital in the Sorry Works! Pilot Program exceed that average, the hospital can Page 2 of 5
petition for a grant from the Sorry Works fund for the difference in those amounts. The amount of reimbursement under the Sorry Works fund is limited to $2 million per participating hospital per year. Expert Witness Qualifications Senate Bill 475 amended Section 8-2501 of the Illinois Code of Civil Procedure, which deals with expert witness standards. The amended section is very similar to the version previously enacted by Public Act 89-7, which was held unconstitutional by the Illinois Supreme Court in, Best v. Taylor Machine Works, 179 Ill. 2d 367 (1997). Subsection (a) of Section 8-2501 mandates that the court, in determining whether a witness qualifies as an expert witness can therefore testify on the appropriate standard of care, must determine whether the witness is board certified, board eligible or has completed a residency in the same or substantially similar medical specialties as the defendant and is otherwise qualified by significant experience with the standard of care, methods, procedures, and treatments relevant to the allegations against the defendant. 735 ILCS 5/8-2501(a). Previously, the physician did not need to be board certified or eligible in the same or substantially similar medical specialties as the defendant. Future reviewing courts will have to determine what significant experience equates to under the amended Section 8-2501, but they may receive some guidance from the amendment to subsection (b) therein. Subsection (b) states that the witness must have devoted a majority, as opposed to the previous substantial portion, of his or her work time to the practice of medicine, teaching or university-based research relating to the medical care and type of treatments at issue. 735 ILCS 5/8-2501(b). Subsection (c) requires that the expert witness have the same class of license as an individual defendant upon whose care he is commenting. 735 ILCS 5/8-2501(c). This amendment has the most immediate implication upon nurses, therapists, technicians and other medical care providers who can receive different degrees of licensure in their professions. Amended Section 8-2501 also requires the expert witness to provide evidence of active practice, teaching or engagement in university-based research. If retired, the expert must provide evidence of attendance and completion of continuing education courses for three years prior to giving the testimony. Finally, the amended section states that an expert who has not actively practiced, taught or been engaged in university based research during the preceding five years may not be qualified as an expert witness, which is a reduction from the ten year requirement under Public Act 89-7. Amendments to Section 2-622 The amendments to 735 ILCS 5/2-622 to be enacted by Senate Bill 475 are few, but have far reach and impact. Under subsection (a)(1) of Section 2-622, the reviewing health professional need only practice or teach in the same area of healthcare or medicine at issue in the action within the last five years, as opposed to the previous six years. However, now the reviewing health professional must meet the expert witness standards set forth in amended Section 8-2501. The legislature also decided that a single written report should be filed to cover each defendant in the action, which helps delineate which acts of negligence are attributed to each defendant. Amended Section 2-622 departs from previous versions in its differentiation between individuals and all other defendants. As to individuals, the written report must be from a health professional licensed in the same profession with the same class of license as the defendant. Therefore, individually named nurses and therapists require reports from individuals licensed in their fields, whereas previously, a physician was qualified to prepare the report for both. For defendants other than individuals, the written report must be from a physician licensed to practice medicine in all its branches who is qualified by experience with the standard of care, methods, procedures and treatment relative to the allegations at issue in the case. This differentiation sets up another dichotomy in the treatment of the hospital or healthcare institution defendant, namely, Page 3 of 5
a different reviewing health professional could be required to complete the report as to a hospital depending on whether individual, employed medical care providers are named as additional parties in the suit. The question also arises as to whether two reports are required when an individual hospital employee is named, one against the hospital and one against the individual. Amended Section 2-622 also provides that preparation of the written report by the reviewing health professional shall not be used to discriminate against that professional in the issuance or determination of premium for medical liability insurance. Further, professional organizations may not discriminate against the reviewing health professional due to his preparation of a written report under this section. This amendment clearly attempts to address the practice by certain medical societies of revoking or suspending the membership of individuals who prepare written reports for medical malpractice complaints that are deemed to be inappropriate or not based on good faith. Amended Section 2-622 also requires that the reviewing healthcare professional s name, address, current license number and state of licensure be attached to the attorney s affidavit required under the act. Subsection (a)(2) of Section 2-622 was amended in two respects. First, the requirement that a plaintiff state the case has not previously been voluntarily dismissed when also alleging that he or she was unable to obtain a consultation with a reviewing health professional prior to expiration of the statute of limitations has been eliminated. This requirement was the subject of the Fourth District s decision in Cargill v. Czlatdko, 353 Ill. App. 3d 654, 818 N.E.2d 898, 288 Ill. Dec. 963 (4th Dist. 2004), which was detailed in this column last quarter. The legislature s omission of that requirement will certainly have some impact on the numerous Cargill motions pending in the circuit courts throughout the state. Subsection (a)(2) further provides that additional 90-day extensions under that section shall not be granted except where there has been a withdrawal of the plaintiff s counsel, presumably within the initial 90-day extension. Use of Annuities for Payment of Future Medical Expenses and Costs of Life Care Senate Bill 475 adds Section 2-1704.5 to the Illinois Code of Civil Procedure, entitled Guaranty Payment of Future Medical Expenses and Costs of Life Care. That section provides that within five days of a verdict in which a plaintiff is awarded future medical expenses and costs of life care, either party to the action may elect, or the court may enter its own order, to have payment of those future expenses through purchasing an annuity. If selected, the defendant will pay 20% of the present cash value of future medical expenses and costs of life care in a lump sum to the plaintiff. Thereafter, the defendant may purchase an annuity from a company highly rated by two of the four financial rating services specified in that section. The annuity must guarantee that the plaintiff will receive annual payments equal to 80% of the current year annual cost of future medical expenses and costs of life care inflated by the annual composite rate for the life of the plaintiff. Under Section 2-1704.5, the trier of fact is charged with determining the present cash value of the plaintiff s future medical expenses and costs of life care, the current year annual cost of the plaintiff s future medical expenses and costs of life care, and the annual composite rate of inflation that should be applied to the current year annual cost. The trier of fact is allowed to vary the amount of future costs from year to year to account for different annual expenditures but cannot be informed of the use of an annuity. Should the company providing the annuity become unable to pay the amounts due the plaintiff, the defendant is required to secure a replacement annuity from a company with the same financial rating. A plaintiff receiving future payments through an annuity may seek leave of court to assign his or her rights to those payments in exchange for a lump sum value if he or she demonstrates unanticipated financial hardship under such terms as approved by the court. In catastrophic injury cases, the use of an annuity to pay for 80% of future medical care costs and cost of life care can result in substantial savings for the medical defendant. The five-day window provided by Section 2-1704.5 Page 4 of 5
dictates that defendants need to consult their financial planner prior to trial and have some estimate for the cost of an annuity should a verdict against that defendant be reached. This section also addresses the often-cited concern by the plaintiff s bar during debate of the bill that defendants could not ensure whether a company providing the annuity would be solvent when future funds were needed. Good Samaritan Protection Extended The final area of medical litigation reform proposed under Senate Bill 475 relates to the Illinois Good Samaritan Act. Specifically, retired physicians are now included among healthcare providers exempt from civil liability for services performed without compensation through free medical clinics or to patients who have been referred from free medical clinics. 745 ILCS 49/30. A second significant change to Section 30 of the Good Samaritan Act is that the patients receiving the free services no longer are required to be medically indigent. What Does It All Mean? According to the Illinois General Assembly, Senate Bill 475 is a package of reforms that seek to enhance the State s oversight of physicians and medical liability insurance carriers while simultaneously reducing the number of nonmeritorious medical malpractice actions and encouraging physicians to practice in Illinois. That seems like a noble goal. What is certain is should Governor Blagojevich sign Senate Bill 475 and allow its reforms to take effect, the resulting Public Act will be attacked by the plaintiff s bar without fail. Most likely, the debate will end up before the Illinois Supreme Court, which will have to decide if the current effort by the General Assembly ignored its reasoning in Best v. Taylor Machine Works or whether they got it right this time. ABOUT THE AUTHOR: Edward J. Aucoin, Jr. is an associate in the Chicago firm of Hall, Prangle & Schoonveld, LLC. He has eight years of experience in medical malpractice defense, commercial litigation, and contract litigation practice. Mr. Aucion s substantial client base includes private hospitals and medical practice groups, physicians and other medical professionals, and national commercial corporations. He has extensive experience in preparing complex litigation for trial, and has second-chaired medical malpractice trials in Cook County and DuPage County. Mr. Aucoin received his B.A. from Loyola University of New Orleans and his J.D. from Loyola University of New Orleans School of Law. He is also a member of the IDC. Page 5 of 5