Recent Appellate Decisions Call Into Question Previously Settled Provisions of Indiana’s Medical Malpractice Act

By:  Tyler Lemen

            In 1975, Indiana became the first state to pass medical malpractice claims reform legislation.  Since that time, the Act has withstood many wholesale constitutional challenges by patients and their attorneys. Many other states followed Indiana’s lead and adopted their own medical malpractice claims reform laws.  However, reform in other states was not always upheld as constitutional.  Part of what makes Indiana’s Act resilient is the consistency with which courts have interpreted the Act, and the Legislature’s decision to craft a comprehensive Act covering insurance, litigation, and available damages.

            However, recent opinions from the Indiana Court of Appeals have begun to chip away at individual portions of the Act.  For example, in an opinion from September 2, 2020, a nursing home resident successfully avoided the need to present her case to a medical review panel prior to pursuing civil litigation when she challenged an arbitration provision within her admission agreement.[1]  Upon admission to the facility, the parties entered into an arbitration provision agreeing to arbitrate any legal claim exclusively by arbitration.  Citing to a footnote within a prior decision, the court concluded this arbitration provision constituted a written waiver by which the parties agreed not to submit their claims to a medical review panel. Setting aside the fact that this opinion discounted the administrative nature of the medical review panel process and the prior view of that process as fundamental to medical malpractice claims–in the absence of a written waiver made in compliance with the Act–it raised a host of questions about future claims.  For instance, if an arbitration agreement qualified as a written waiver as contemplated by the Act, what other standard contracts may be deemed waivers of the Act’s protections in the future? 

            Perhaps more troublingly, the Medical Malpractice Act has historically been viewed as an all-or-nothing protection. Once a provider takes the necessary steps to become qualified, the protections of the Act are available to the provider and relied upon when making insurance and other business decisions. This recent opinion calls into question whether courts can invalidate protections of the Act on a case-by-case basis.  Such decisions would be catastrophic for providers.  If a Qualified Provider has certain protections of the Act like the damages cap removed by the courts, providers are exposed to potential liability far exceeding the amount for which they are insured as dictated by the Act.

            A more recent example of these small structural changes is found in an October 8, 2020 opinion from the Indiana Court of Appeals in which the court determined a patient could be barred from pursuing physicians for individual acts of negligence but could still recover against a hospital for the alleged negligent acts of these same individuals.[2]  The patient filed a proposed medical malpractice complaint with the Indiana Department of Insurance as required by the Act.  Within this proposed complaint, the patient named only the hospital, alleging the hospital held itself out to the public as capable of making medical diagnoses and offering appropriate treatments but failed to do so, injuring the patient.  Two years later, after the applicable statute of limitations had expired, the patient relied upon the alleged individual acts of negligence by physicians to establish the hospital was allegedly negligent.  In challenging this legal position, the hospital argued the patient could not now allege the hospital was negligent through the acts of individual physicians as those physicians were not, and could no longer be, sued for malpractice.

            The appellate court began its opinion by “underscoring that this case is simply at the MRP [medical review panel] stage . . . the MRP process is intended to be ‘informal’ and ‘limited.’” The court determined the hospital clearly had notice the patient was alleging vicarious liability–despite there being no such claims within the proposed complaint or uncovered via initial discovery–so it would be improper to limit the claims presented to the medical review panel.  Specifically, the patient “may proceed with his arguments and allegations of physician negligence/vicarious liability in his submission to the MRP even though those physicians are not named in the proposed complaint and are now individually immune from suit.”  Thereafter, the court admonished the hospital for attempting to limit the patient’s claims before the case was presented to the medical review panel. 

            Within a matter of one month, the appellate court determined the medical review panel process was completely waivable by an arbitration agreement intended to control civil litigation between a patient and qualified health care provider, but also an “informal” and “limited” process with which court’s should not interfere. While the merits of each individual opinion may be debated, the overarching principles by which Indiana’s Act has survived, consistency and comprehensiveness, are being challenged.  Health care providers and their insurers should stay apprised of recent developments to ensure continued compliance with the Act.

            If you have questions about Indiana’s Medical Malpractice Act, please contact one of the attorneys within DSV’s Health Care practice group. 

[1] The Estate of King by Briggs v. Aperion Care, 2020 WL 5224450 (Ind. Ct. App. September 2, 2020).

[2] Anonymous Hospital v. Spencer, 2020 WL 5950905 (Ind. Ct. App. October 8, 2020).