An Insurer’s Guide to Indiana Medical Malpractice Laws
Indiana’s medical malpractice laws attempt to combat rising healthcare costs and insurance premiums. Awards, attorney’s fees, and health care provider liability are all capped. Plaintiffs have specific procedures to follow, providers must qualify for the protections, and insurers must take certain actions to protect their insureds. Health care providers and their adjusters must have a strong grasp of the basic structure of the system in order to successfully handle malpractice claims. Accordingly, I have outlined the process to help navigate Indiana’s medical malpractice laws.
The Procedures
A plaintiff must first submit a proposed complaint to the Commissioner of the Indiana Department of Insurance, who notifies all defendants. The parties then select an attorney to act as chairman of the proceedings, an administrative and advisory role only. A party then may request a medical review panel. The parties each select a medical professional to the panel, and those two select the third and final member.
The chairman convenes the panel, expedites review of the claim, and schedules the submission of evidence. Parties may submit evidence in writing and request the panel convene for questioning and further presentation of evidence. The panel must issue its expert opinion within 180 days from the selection of its final member.
The medical malpractice laws focus on the parties and the panel, but several regulate the provider’s insurer. In order to qualify under these laws, the provider must carry malpractice liability insurance of at least $250,000 per occurrence and $750,000 annual aggregate, unless the provider is a hospital, health maintenance organization, or health facility. A provider also has the option to file and maintain a cash or security bond, or annually submit a verified financial statement.
The insurer is required to provide certain notices to the Commissioner. The insurer must notify the Commissioner of any malpractice case in which it has reserved at least $125,000, immediately after placing the reserve, and provide notice of any settled claims. The insurer must also provide notice if a complaint less than $15,000 is filed directly with the circuit court.
Providers are only afforded these protections when their insurance remains in force. Filing proof of financial responsibility with the Commissioner constitutes acceptance of these provisions, and an insurer assumes the obligation to pay an award imposed against it.
The Payments
Recovery per occurrence of malpractice is capped at $1.25 million. A health care provider is not liable for more than $250,000 per occurrence of malpractice, or $750,000 annual aggregate. A judgment or settlement in excess of total liability shall be paid from the patient’s compensation fund (PCF), established by the Commissioner. Payments may be made in a lump sum or on a periodic payment agreement. Once the panel makes its award, the plaintiff must file a court petition seeking approval of the settlement and demanding payment from the compensation fund.
If a plaintiff demands more than the award, he may file a petition demanding the PCF pay out the excess and take the matter to court. Attorney’s fees from any award made by the PCF may not exceed fifteen percent.
Indiana’s medical malpractice laws provide certain protections for providers and their insurers. They are an attempt at tort reform, but are not perfect. What experiences have you had with medical review panels? How effective do you think Indiana’s laws are in reducing cost and time of litigation?
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