Understanding Medical Malpractice Insurance
Medical malpractice insurance is a big expense for health care providers. The average award in 2006 for medical malpractice claims was $521,560. To alleviate the financial burden on individual providers, the State of Louisiana created the Louisiana Patient's Compensation Fund.
Under Louisiana Revised Statutes 40:1299.44:
State health care providers are automatically entitled to be covered by the fund. Private health care providers are eligible for coverage as well. The liability of each qualified health care provider is limited to $100,000 plus interest, per patient, per incident. Any judgments, settlements, or arbitration orders in excess of $100,000 per provider are paid out of the Patient's Compensation Fund.
To illustrate how the fund works, we look at a 2003 Court of Appeals case involving the Southwestern Louisiana Hospital Association in DeRidder, Louisiana. Divorced parents brought individual actions against a doctor for his negligence in causing their son's death. The doctor admitted fault and paid $100,000, the maximum amount he is individually responsible for. The Compensation Fund then paid $250,000 to the father, and an additional $400,000 to the mother, bringing the total damages to $750,000.
The total amount awarded in this case actually exceeds the $500,000 maximum damages amount in a medical malpractice case. Section 1299.42 states:
The total amount recoverable for all malpractice claims for injuries to or death of a patient, exclusive of future medical care and related benefits as provided in R.S. 40:1299.43, shall not exceed five hundred thousand dollars plus interest and cost.
The single $500,000 cap applies collectively to all claims which flow from one act of malpractice resulting in a victim's injury or wrongful death. Future medical costs are paid as they are incurred from the Patient's Compensation Fund.
Because the $750,000 award in the above case was well beyond the limit, the damage award was reduced to reflect the $500,000 limit on medical malpractice damages. The mother's award was subsequently reduced from $400,000 to $150,000 to reflect the limit.
Louisiana Patient's Compensation Fund Recap:
(1) Medical Malpractice awards limited to $500,000
(2) $500,000 cap applies collectively to all claims which flow from one act malpractice
(3) $100,000 maximum liability for individual health care providers
(4) Future medical expenses are covered by the fund
