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In late 2002, medical liability tort reform became a legislative hot topic in Missouri
as an increasing number of physicians began moving their practices across state
lines to nearby Kansas, citing the state’s cost of doing business and, specifically,
rising medical malpractice insurance premiums for the exodus.
When questioned, the insurance companies pointed to the court decision in Scott
v. SSM Healthcare St. Louis — a January 2002 decision that ruled courts can award
multiple caps in each medical malpractice case for non-economic damages, rather
than the established single cap of $557,000 per injury that increases to reflect
inflation. For the previous 15 years, Missouri courts operated under that single
cap rule.
Bolstered by a strong trial-lawyer lobby, the Scott v. SSM decision mandated that
the limit could be applied to each defendant, virtually eliminating any cap on medical
malpractice lawsuits. Missouri insurers claimed that they were forced to more than
double their reserves for future payments to 2002’s malpractice victims, even though
the number of claims actually fell that year.
In the wake of Scott v. SSM, Missouri medical malpractice insurers reported a loss
ratio of 108 percent. In other words, the companies expected to pay out $1.08 cents
in benefits to 2002 claim victims for every dollar of premium collected, up from
79 cents in 2001. For doctors, specifically, the figure reached $1.18 in expected
payouts for every premium dollar in 2002. The loss ratio for physicians almost doubled
from 61 cents the year before. As a result, medical malpractice insurers raised
premiums as much as 50 percent in 2003 and as much as 107 percent in 2004.
The Missouri Legislature attempted to address the growing malpractice insurance
crisis with bills that addressed tort reform, but in both the 2003 and 2004 sessions,
then-Gov. Bob Holden vetoed the legislations because they also offered special tort
protections to business other than the medical field. The governor said that he
was only interested in signing legislation that deals with “medical malpractice
and medical malpractice alone.” The legislature refused to rewrite the bills, and
could not come up with the two-thirds majority required to overrule the veto.
After the election of Governor Matt Blunt in 2004, the Missouri Legislature again
revisited the medical malpractice crisis with House Bill 393 (HB 393), which was
signed into law on March 29, 2005. This bill modified 19 sections of the Revised
Statutes of Missouri (RSMo) relating to tort damages in Missouri, with its greatest
impact in the area of medical malpractice tort actions. The greatest changes HB
393 instituted into Missouri medical liability tort law include:
Venue Reform
HB 393 limited the practice of moving litigation to unrelated, plaintiff-friendly
venues in an effort to secure unfair verdicts by requiring cases to be filed in
the county where the alleged injury occurred.
Joint & Several Liability
HB 393 eliminated a provision in Missouri law that had allowed defendants who are
as little as 1 percent liable for an injury to be held liable for the entire judgment,
also known as joint-and-several liability.
Non-Economic Damage Cap
HB 393 capped punitive damages at $250,000—or three times the amount of the actual
damages awarded—whichever is greater. The bill also caps damages for pain and suffering
at $250,000 for medical malpractice, with no inflationary allowance.
The results of HB 393 on medical malpractice insurance premiums have been cautiously
considered successful, as rates have remained flat since 2006.
The Missouri Legislature and Gov. Blunt followed HB 393 in 2006 with the signing
of House Bill 1837 (HB 1837), which allowed insurers to charge an additional premium
surcharge or discount based on the health care provider's loss experience, training
and other factors; specifies that no insurer can increase malpractice insurance
rates by more than 25 percent or refuse to renew a policy without at least 60 days
prior written notification; and created the Health Care Stabilization Fund Feasibility
Board within the Department of Insurance to analyze medical malpractice data to
determine whether a healthcare stabilization fund to provide excess liability coverage
for healthcare providers should be established in Missouri.
On Jan. 24, 2008, the Health Care Stabilization Fund Feasibility Board submitted
a preliminary review that it could not make an informed decision about the need
for a healthcare stabilization fund without additional data. The Board will again
report to the state in 2010 when it hopes to be able to make a recommendation on
whether a stabilization fund is necessary.
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