Nevada Cap on Medical Damage Awards Draws Criticism

By Paul Harasim | October 31, 2008

As 59-year-old Richard Krikalo lumbers through the office of a junkyard he helps manage, he bumps into a desk and clips a wastebasket with his right leg.

Krikalo is almost blind in his right eye and has trouble with depth perception and peripheral vision.

“I go to the buffet and bump into people carrying food,” he growls, shaking his head, his static right eye unable to follow his blinking left one. “It’s embarrassing. The only time I don’t have to worry about bumping into something is when I’m in bed.”

Krikalo blames a doctor for a botched retina reattachment operation in August 2007. But lawyers tell him it’s economically unfeasible to litigate his complicated case, or that time limitations are an issue.

For that, he blames medical malpractice reforms of the 2004 Nevada Legislature.

“With this new malpractice law in place, I can’t even get a lawyer to go after who’s responsible for what happened,” the Las Vegas resident said, displaying rejection letters from attorneys. “There’s hardly any protection for the consumer any more. Now everything is in favor of doctors.”

Krikalo says he hates frivolous lawsuits, but says someone who loses his eyesight in surgery gone awry should be able to find a lawyer to gain compensation for what he’s lost.

Voters overwhelmingly approved Question 3 in 2004. Physicians called it the “Keep Our Doctors In Nevada” initiative.

Doctors love it. They have seen dramatic savings on malpractice insurance.

Insurance companies profit. They don’t have to make large pay outs.

Attorneys hate it. They believe a potentially lucrative part of their business is cut off.

Some lawmakers wonder whether the law should be amended again, to protect the public.

At the heart of the varied positions is a cap of $350,000 on damages for pain and suffering in all cases.

Children, homemakers, seniors and people such as Krikalo who are able to work despite injury have no loss of future earnings to calculate. Essentially, any malpractice awards they win would come out of the $350,000 allocated for pain and suffering, a sum divvied between the attorney and the client.

In the past, juries would sometimes award seven-figure judgments for pain and suffering to grieving parents who lost a child to medical negligence or to an individual whose quality of life had changed because of a physician’s mistake.

Now Nevadans who believe they have claims may receive letters from attorneys similar to one Krikalo received from an attorney in July of this year: “Unfortunately, the ($350,000) limit on damages makes it economically unfeasible to pursue this matter given the complicated nature of the case.”

The reform also cut from two years to one the time limit for filing malpractice claims.

Krikalo bumped against that when he contacted another local attorney.

“It appears that the time to file your case has already expired, or will expire shortly,” the lawyer wrote.

Physicians have seen malpractice insurance costs drop 20 percent to 30 percent since the 2004 reforms. They believe trial lawyers abuse the system and file frivolous claims hoping for settlements or unreasonably large jury awards.

“The morale of physicians is much improved,” said Dr. Jerry Jones, Clark County Medical Association president. They’re much happier doing medicine now and our doctors are staying in Nevada.”

Dr. Weldon “Don” Havins, who preceded Jones before taking over as president of the Nevada State Board of Osteopathic Medicine this year, said that until Question 3 passed, fast-growing Nevada had trouble attracting new physicians.

Seven new licenses were issued to doctors in Clark County in 2002. Two years later, just the promise of medical tort reform brought a net gain in licensees of 212.

“Since the implementation of the 2004 medical tort reforms, the net gains in Clark County physicians has continued and stabilized,” Havins said.

Havins said a substantial decrease in medical malpractice filings — 337 cases each year in 2002 and 2003 — has been heartening to physicians.

From 2004 to 2007 the number of cases filed ranged from a low of 157 last year to a high of 203 in 2006.

There have been 230 cases already filed this year. But Havins said that probably reflected cases brought after a hepatitis C outbreak in the Las Vegas area.

Only two cases filed in Clark County District Court after the 2004 reforms have gone to a jury. One ended with a $100,000 award; the other, $495,000.

To Havins, the fact that the number of cases filed since 2004 is higher than those filed in the five years prior to the “crisis years” of 2002 and 2003 proves that southern Nevadans still have a solid legal remedy for medical negligence.

“Plaintiffs apparently are not having trouble finding attorneys to take their cases,” he said.

But Jim Crockett, an attorney who quit taking medical malpractice cases, said lawsuits now are usually on behalf of individuals whose future earnings are at stake, including families who lose a breadwinner due to medical negligence.

“My cases were overwhelmingly centered on the wrongful death of children, housewives or senior citizens, who had no economic damages,” he said of his former caseload.

“But for what I had to do to win them, the outcome now isn’t satisfactory for either the client or me,” he said. “If a client gets a little more than $50,000 after four years of stressful litigation, they don’t feel it’s worth it.”

Gerald Gillock, another veteran plaintiff’s attorney, said the reason for the rise in the number of lawsuits, despite a dramatic drop-off in pain and suffering cases, is simple: “There is a lot of medical malpractice out there.”

Janice Moskowitz of the Nevada Division of Insurance said there were six major insurers providing insurance for physicians and surgeons in 2004. There are eight authorized carriers.

The increased competition, Havins said, has helped bring insurance premiums down for doctors, who, according to studies done by Medicare and Medical Economics, spend between 3.2 percent and 3.9 percent of their practice incomes on malpractice insurance.

Robert Byrd, president of the Independent Nevada Doctor Insurance Exchange, said the medical profession in Nevada no longer has to worry about carriers leaving the state.

“Because of the reforms, Nevada is no longer seen as one of the problem states,” he said. “It’s now seen as a very attractive place to do business.”

Medicus Insurance Co., chief executive Sheldon Davidow said a family practitioner who paid a $25,000 premium before 2004 can pay $14,000 to $18,500 per year today. Davidow’s Texas-based firm entered the Nevada medical malpractice insurance market after Question 3 passed.

He said policies for obstetricians and gynecologists now range from $78,000 to $105,000, he said, well below the $150,000 to $200,000 five or six years ago.

Surgeons who had been paying $100,000 for coverage can now get premiums between $55,000 and $70,000 a year, Davidow said.

Median salaries for general surgeons in the West can be $292,000, according to Salary.Com, compared with $235,000 for OB-GYNs and $158,000 for family practitioners.

Assemblywoman Sheila Leslie, D-Reno, chair of the state’s Legislative Committee on Health Care, said lawmakers in 2009 may revisit the medical malpractice legislation in the aftermath of the hepatitis C outbreak.

Health authorities in Las Vegas have identified 114 people who contracted the incurable liver disease while they were patients at two clinics where officials say staff members reused syringes and vials of medicine. Nine cases are linked by DNA evidence to the clinics, while officials say 105 more could have contracted the virus through other means.

More than 120 lawsuits alleging medical negligence, and a class-action claim have been filed by patients who weren’t made ill but claim emotional distress.

“We have to be fair,” Leslie said. “What has happened with the whole hepatitis C tragedy is the best argument why the caps should be revisited. This scandal has really heightened interest in what caps for pain and suffering mean. Doctors are overprotected and the law really does not protect the patients.”

Leslie believes the ability of an individual to pursue a liability lawsuit for improper treatment provides an additional incentive for a doctor to follow good medical practice.

Meanwhile, Gillock said he takes cases knowing there will be little payout, hoping that one day a jury verdict can be appealed to the Nevada Supreme Court.

“I know if we get the right case it will be ruled unconstitutional,” he said.

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