Indiana Court: Compensation Fund May Not Dispute Liability in Med Mal Case

By Stephanie K. Jones | November 16, 2012

Indiana’s high court has ruled that the state’s fund established to cover excess damages in medical malpractice cases may not dispute the existence or cause of a plaintiff’s injury in a case in which the medical providers previously settled the claim, admitting liability.

The Indiana Supreme Court acknowledged that previously in some types of cases it has allowed the Indiana Patient’s Compensation Fund (PCF) to present evidence to dispute the existence or cause of injury.

In a case on appeal from the Marion Superior Court (No. 49D14-0706-CT-23482), however, the Court disagreed with the PCF’s arguments that “the final sentence of Indiana Code Section 34-18-15-3(5), which requires the trial court to ‘consider the liability of the health care provider as admitted and established,’” is inapplicable.

That inapplicability, according to PCF, would allow it to present evidence disputing the existence or cause of the patient’s injury.

The Court described the case:

“At age four, B.O. was diagnosed with a mild form of cerebral palsy known as spastic diplegia. Subsequently, his parents filed a complaint under the Indiana Medical Malpractice Act, claiming that the healthcare providers who attended B.O.’s birth were negligent. Specifically, they asserted that the healthcare providers failed to adequately monitor his condition during labor and delivery and then failed to respond when signs of fetal distress appeared. That fetal distress, they maintained, lasted for nearly two hours before his delivery and resulted in the development of his condition.

“Shortly before trial, B.O.’s healthcare providers settled for a sum allowing B.O. to seek excess damages from the Indiana Patient’s Compensation Fund (PCF).”

The Indiana Medical Malpractice Act (MMA) establishes separate damages caps for medical malpractice claims against a qualified healthcare provider. It caps a recovery for a patient’s injury or death at $1,250,000 and limits the liability of a qualified health care provider whose medical negligence proximately caused the injury or death to the first $250,000 of damages.

The plaintiff may seek recovery of excess damages above the limit of liability of the healthcare provider from the PCF.

Under Indiana’s insurance code, the Court stated, any settlement “to be paid from the patient’s compensation fund, the court shall consider the liability of the health care provider as admitted and established.”

At issue in the case are “the precise meaning of ‘liability’ and in what manner it is ‘admitted and established,’ the Supreme Court determined.

“Here, B.O. has claimed a single injury: cerebral palsy consisting of spastic diplegia,” Justice Massa wrote in delivering the opinion of the Court. “That is the claim that the healthcare providers chose to settle, and thus that is the claim for which liability is ‘admitted and established’ — including, by implication, the required elements of causation and injury. All that remains to be determined is the amount of damages to which B.O. is entitled …”

The Court acknowledged that the “PCF is correct that it may present evidence regarding the compensability of a claim when that issue is in dispute, but contrary to the PCF’s contentions, compensability is not disputed in this case.”

Therefore, the Court concluded “the trial court’s grant of partial summary judgment is affirmed.”

The case is: Stephen W. Robertson, Indiana Commissioner of Insurance, as administrator of the Indiana Patient’s Compensation Fund and the Indiana Patient’s Compensation Fund v. B.O., a minor, by his parents and next friends, Lisa A. Ort and Kevin C. Ort.

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