House panel approves increase in state's cap on medical malpractice claims

State lawmakers on Monday revived an effort to increase the cap that Indiana puts on medical malpractice damages.

The House Judiciary Committee gutted an unrelated bill and replaced it with language to raise Indiana’s medical malpractice cap – among the lowest in the nation. The move also would represent the first increase to the cap in nearly two decades.

Under the proposal, lawmakers are considering a $400,000 increase to the cap to set a new limit for those claims at $1.65 million beginning in 2017. The cap also would increase over time to $2.25 million by 2031 in an attempt to keep up with inflation – an aspect of the proposal strongly opposed by doctors and some medical lobbyists.

A key author of the proposed changes, Sen. Brent Steele, said Indiana’s current $1.25 million cap is outdated and that periodic increases are important.

“We, the legislature, don’t do a very good job about keeping pace with the cost of living,” said Steele, a Bedford Republican.

A representative from the Indiana State Medical Association argued Indiana has the “most favorable” medical malpractice act in the country. It serves as a tool for recruiting physicians, said Michael Rinebold, director of government relations for the association. He said the association agrees with setting the cap at $1.65 million, but lawmakers should revisit any further increases in the future.

“The cap increases may prompt more lawsuits,” Rinebold said. “We are afraid the number of complaints will continue to rise.”

Lawmakers say Indiana’s current cap is susceptible to court challenges. Indiana is one of only three states that caps total damages, and of those Indiana’s is the lowest, according to the Indiana Hospital Association.

Senate President Pro Tempore David Long said Thursday he fears the courts may scrap Indiana’s law altogether, as they have in at least half a dozen other states where caps were found to be unconstitutionally low and unfair to claimants.

“Those caps are getting old and they’re dangerously low,” Long said. “And lot of people are concerned that as we try to be frugal and conservative with this, we go too far and the cap could be struck down and then there’s no protection for our doctors and our hospitals.”

Still, it’s going to be a “tough sell,” he said. “It’s possible nothing happens.”

Dan Ladendorf, a representative of the Indiana Trial Lawyers Association, said the group doesn’t believe in capping damages and questioned the proposed $1.65 million limit. If Indiana’s cap was based on a medical cost index, it would exceed $2.2 million, he said.

“Even with these proposed changes, the opponents to this bill have told you Indiana would still be the most favorable state in the nation for medical malpractice,” he argued. “If you are going to commit medical malpractice, come to Indiana, because we’re the most favorable state in the nation.”

Lawmakers say the proposal is a result of three years of negotiations among trial lawyers, hospitals and doctors. An original proposal by Steele to increase the cap didn't advance earlier this legislative session.

On Monday, the Judiciary Committee moved the proposal in Senate Bill 28 by an 11-1 vote. That bill now goes to the full House for consideration.

Call IndyStar reporter Tony Cook at (317) 444-6081. Follow him on Twitter: @indystartony.

Call IndyStar reporter Chelsea Schneider at (317) 444-6077. Follow her on Twitter: @indystarchelsea.