Bill Summary – FastDemocracy

Fiscal Note
                                        Fiscal Services Division
HF 161 – Medical Malpractice, Noneconomic Damages (LSB1101HV.1)
Staff Contact: Justus Thompson (515.725.2249) justus.thompson@legis.iowa.gov
Fiscal Note Version – Final Action
Description
House File 161 relates to noneconomic damage awards against health care providers and is
divided into two divisions.
Division I of the Bill limits the noneconomic damages that a jury can award a plaintiff if there is a
substantial or permanent loss or impairment of a bodily function, substantial disfigurement, loss
of pregnancy, or death to $1.0 million, or $2.0 million if the civil action includes a hospital. The
Bill provides that damages for loss of dependent care due to the death of or severe injury to a
spouse or parent who is the primary caregiver are considered economic damages. The Bill also
makes modifications to when punitive or exemplary damages are awarded.
The Bill provides for an annual 2.1% increase to the $250,000 cap under current law and to the
$1.0 million or $2.0 million cap under the Bill beginning on January 1, 2028. The Commissioner
of Insurance is required to publish and update the amount of the limitations on damages on the
Insurance Division’s Internet site annually.
Division I of the Bill takes effect upon enactment and applies to occurrences on or after that
date.
Division II creates a Medical Error Task Force to review medical error rates of licensed
physicians in this State. The Task Force must make recommendations to the General
Assembly and the Director of the Department of Health and Human Services (HHS). The
recommendations must identify options for reducing medical error rates, improvements in
education and training to minimize medical errors, and whether applicable penalties for medical
errors and physician licensure review measures are sufficient.
Background
Iowa Code section 147.136A(b) defines “noneconomic damages” as damages arising from pain,
suffering, inconvenience, physical impairment, mental anguish, emotional pain and suffering,
loss of chance, loss of consortium, or any other nonpecuniary damages. Under current law, the
total amount recoverable in any civil action for noneconomic damages for personal injury or
death against a health care provider is limited to $250,000 unless the jury determines that there
is a substantial or permanent loss or impairment of a bodily function, substantial disfigurement,
or death, which may result in a higher award. The limitation on damages under the current law
does not apply if the defendant’s actions constituted actual malice.
Iowa Code chapter 25 specifies that when a claim is filed against the State, the claim is referred
to the State Appeal Board for consideration of payment. The State Appeal Board considers all
monetary claims that involve property damage, personal injury, or wrongful death. The Board
makes a recommendation regarding payment, denial, or dismissal for each claim.
                                                  1
A settlement or claim against the University of Iowa Hospitals and Clinics faculty for actions that
occur within the scope of their employment is paid from two sources. Up to $5.0 million per
occurrence and $9.0 million annual aggregate is paid from the University of Iowa Physicians or
Iowa Medical Mutual Insurance Company. Anything above that limit is paid from the State
General Fund through the State Appeal Board. For the liability of other University of Iowa
Hospitals and Clinics employees acting within the scope of their employment, the claim or
settlement is paid by the State of Iowa from the General Fund. In each case, the State of Iowa
and University of Iowa agree on an appropriate allocation.
The University of Iowa Hospitals and Clinics includes the main adult care hospital, a specialized
disabilities and development outpatient facility (serving pediatric and adult patients), and the
University of Iowa Stead Family Children’s Hospital. In addition, outpatient clinic facilities are
located in the State’s population centers such as Waterloo, Des Moines, and Cedar Rapids.
According to the Judicial Branch, the total number of filings for all case types over the last five
years has averaged 666,000 per year. Medical malpractice filings are a small percentage of
total case filings in the Iowa court system. Medical malpractice filings for calendar year (CY)
2017 through CY 2022 averaged 160 per year. Approximately 8.0% of medical malpractice
case dispositions were by jury trial over that same time period.
According to the University of Iowa Hospitals and Clinics, in the last three fiscal years, the State
of Iowa paid the following amounts in medical malpractice case resolutions. These totals
include both economic damages and noneconomic damages.
• FY 2020: $16.8 million
• FY 2021: $12.6 million
• FY 2022: $17.6 million
Assumptions
• The impact of the Bill on the behavior of plaintiffs and defendants is unknown.
• Medical malpractice suit filings will continue to be a small percentage of total case filings in
   the Iowa court system. It is estimated that approximately 13 cases per year will be disposed
   by jury trial.
• A portion of the award for a successful claim brought against a member of the University of
   Iowa Hospitals and Clinics will continue to be paid by the University of Iowa Physicians or
   Iowa Medical Mutual Insurance Company, and the remainder will be paid by the State
   General Fund.
• The creation of a task force may result in increased workload and require the HHS to hire
   independent contractors.
Fiscal Impact
House File 161 may reduce future settlements paid by the State Appeal Board from the General
Fund and by the University of Iowa Hospitals and Clinics. However, the extent of this decrease
cannot be estimated. Any fiscal impact to the Judicial Branch cannot be estimated.
The fiscal impact to the HHS for the Medical Error Task Force is unknown. However, based on
previous contractual arrangements for similar purposes, the HHS may incur costs totaling up to
$200,000.
Sources
Board of Regents
Judicial Branch
Department of Health and Human Services
                                                  2
                                                                               /s/ Jennifer Acton
                                                                                 May 12, 2023
Doc ID 1371828
The fiscal note for this Bill was prepared pursuant to Joint Rule 17 and the Iowa Code. Data used in developing this
fiscal note is available from the Fiscal Services Division of the Legislative Services Agency upon request.
                                                 www.legis.iowa.gov
                                                          3
Statutes affected: 
Introduced: 147.136A
Reprinted: 147.136A
Enrolled: 147.136A