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Indiana’s New Medical Malpractice Cap

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Updated November 4, 2019 | Medical Malpractice |


Indiana recently continued its long tradition of leading the nation when it comes to medical malpractice legislation by passing much-needed changes to its first-in-the-nation malpractice system. This system, which works to strike a balance between the interests of patients, doctors, and all taxpaying Hoosiers, has worked well since it was first implemented, but changes have been required now and then so that the system keeps pace with current conditions.

Consumers should be aware of the new changes understand how the Indiana system as a whole works.

First in Reform

In 1975, Indiana became the first state to enact comprehensive medical malpractice reform. There was concern at the time that court judgments were escalating too quickly and that the combination of large damage awards and rising malpractice insurance rates could begin to make the state an unfavorable place for doctors to practice. On the other hand, those behind the legislation also acknowledged that the victims of malpractice have a legitimate right to claim adequate compensation for their injuries. The state also recognized that a valid mechanism for improving patient care is to hold physicians accountable for their errors and negligence, because everyone benefits when a dangerous practitioner is driven out of the field because of too many expensive judgments.

The system that was created struck a balance. Physicians paid a surcharge on their malpractice insurance, but this money went into a Patient’s Compensation Fund (PCF), from which future malpractice judgments would be paid. Physicians themselves (and their insurers) would only directly pay a part of each approved claim, with the PCF paying the rest. Each physician or practice would only be required to pay a limited number of claims in any single year, with the PCF taking over thereafter. In addition, the maximum amount that could be awarded in any individual claim was capped.

Current Indiana Medical Malpractice Details

With the new changes, which take effect on July 1, 2017, the maximum medical malpractice award will rise to $1.65 million (it had been pegged at $1.25 million since 1999). For doctors, the PCF will take over payment of large claims after the first $400,000. Cumulatively, no doctor will pay more than $1.2 million per year before the PCF steps in. Hospitals and HMOs have somewhat different caps, but the idea is similar.

Another change involves attorney fees, which had previously been capped at 15%. The maximum amount a plaintiff’s attorney can recover from any award will rise to 32%.

The new law also looks slightly ahead: In 2019, the maximum award will rise to $1.8 million, with the physician’s portion rising to $500,000 per claim.

Why These Changes?

Although historically Indiana has led the way with medical malpractice reform, those familiar with the system had begun to worry that it wasn’t keeping up with the times. Some were especially concerned with the size of the cap on damages, which had not kept up with inflation. In recent years, similar caps in other states have been thrown out by the courts. There had also been some worries that the PCF could become underfunded after facing several large actual and potential multi-plaintiff settlements.

Changes Nearly Didn’t Pass

These changes almost didn’t happen. Similar proposals had failed in recent years. Earlier in this legislative session a more comprehensive bill, which would have modified which cases required medical review and would have included a mechanism to tie the damage award limit to inflation, was withdrawn. The revival of changes in this session was unexpected, as was the near-unanimous support for passage in both houses and the quick approval by the governor.

Is the System Fair to All Victims?

Not everyone is happy with the current system. Some, including the family of a young woman left permanently disabled by a birth injury, have argued against it because the damage amounts are too small to cover the actual costs of care related to patient injuries (in this case estimated to be at least $8 million). A jury agreed, but the current system prevents a payout this large. The case continues in the courts.

Contact a Medical Malpractice Attorney Today

Navigating any medical malpractice claim can be a complex process, and difficult to successfully move forward without help. When a patient has been injured during treatment or because treatment was denied or delayed, it is important to discuss your situation with a law firm you can trust. Contact the Indianapolis Medical Malpractice Attorneys of Wilson Kehoe Winingham. The lawyers at WKW can help you get the compensation you deserve.

Call 317.920.6400 or fill out an online contact form for a free, no-obligation case evaluation.

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