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Cap to Limit Non-Economic Awards Fail in Negotiations

Joel Stashenko [New York Law Journal]
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ALBANY – The president of the New York State Bar Association yesterday welcomed the demise of abudget proposal by Governor Andrew M. Cuomo to cap non-economic awards, such as those for pain and suffering, in medical malpractice cases.

“We did not feel that caps were an appropriate way to address issues in malpractice and that they would have been bad public policy for our justice system,” said Stephen P. Younger, president of the state bar. “We’re pleased they were eliminated from the budget agreement.”

Mr. Cuomo’s Medicaid Design Team had recommended a $250,000 cap. Bar groups and patient advocates had vociferously opposed the idea, while hospitals and doctors supported it (NYLJ, March 1).

The budget agreement reached over the weekend does include a proposed fund to compensate infants injured at birth, but its details were still under discussion yesterday, a spokeswoman for the state Health Department said. Mr. Younger said he was also awaiting details about the fund.

Mr. Cuomo’s Medicaid task force was formed to find ways to hold the line on the $15 billion New York spends each year on Medicaid. Legislative leaders agreed to accept most of its proposals, which would slash $2.8 billion and impose a cap on future increases.

Opponents of a cap argued that the majority of such awards are paid by private insurers and that Medicaid costs would rise over time, not fall, if awards are capped because eligible Medicaid recipients would end up seeking benefits from the Medicaid system when their awards were used up.

“The problem was that Medicaid doesn’t pay for malpractice awards,” Mr. Younger said. “It has nothing to do with Medicaid. It is not a budget issue.”

Democrats in the Assembly—led by Speaker Sheldon Silver of Manhattan, a trial lawyer—were adamantly opposed to the cap. A source close to the budget negotiations said the lawmakers were skeptical that the recommendation would generate the $420 million in Medicaid saving envisioned by Mr. Cuomo.

Unlike the Assembly, the Senate’s budget resolution initially included the caps, but Finance Committee Chairman, John DeFrancisco, R-Syracuse, said during budget hearings he also doubted the savings estimate by the governor’s Medicaid reform panel.

Mr. DeFrancisco, a personal injury lawyer who has represented plaintiffs in medical malpractice cases, said he favored stricter health care protocols to curb insurance costs.

The Cuomo administration did not respond to several requests for comment.

Thirty-five states have caps on pain-and-suffering awards, although their effectiveness is debated.

Mr. Younger said the $250,000 limit proposed for New York was also unreasonably low.

“We believe the caps were set at such a low level that meritorious cases would not have been brought,” said Mr. Younger, of Patterson Belknap Webb & Tyler. “It is arbitrary, whatever number you pick.”

Mr. Younger also objected to the makeup of the task force assembled by Mr. Cuomo. The group included no representatives of the state or the city bars, but it did have the presidents of the Greater New York Hospital, the Healthcare Association of New York and the union representing most health care workers in New York City.

VerdictSearch Compilation

According to a review of more than 60 malpractice verdicts in New York during the last two years compiled by VerdictSearch, a Law Journal affiliate, only eight awards for non-economic damages were under $251,000.

The awards in 59 cases were for more than $251,000. Of those, 45 were over $1 million. The largest was $60 million won by a 40-year-old woman in Bronx Supreme Court in 2009.

Attorney Peter DeFilippis won a $4.25 million award in the Bronx last year for past and future pain on behalf of plaintiff Loric Stothart.

Mr. Stothart entered Montefiore Medical Center to repair a tear on the skin of his foot but suffered blood clots and other complications.

His lawyer said that with more complex cases costing a minimum of $50,000 for lawyers for research and expert witnesses, some litigants would not have been able to find a lawyer to take their cases if the cap had been adopted.

“That was a case where Mr. Stothart underwent eight surgeries and years and years of pain and suffering, that have not abated,” Mr. DeFilippis said in an interview. “Had that case been faced with medical malpractice caps, it would have been a $250,000 conclusion, less attorney’s fees and other disbursements. Essentially, it would have been a very unfair outcome.”

Lake Success attorney Steven E. Pegalis won a $7 million award for pain and suffering from St. Francis Hospital in Roslyn, Long Island, and doctors late last year for the treatment of his client Owen McNamara.

Mr. McNamara suffered 2 1/2 years of rehabilitation and a nearly fatal heart attack because doctors failed to diagnose an accumulation of blood and fluid in the sac surrounding his heart.

Mr. Pegalis said a $250,000 cap would have created an artificial degree of immunity against bad doctors and health care centers in the McNamara case and many others.

“Immunity is unsafe and extraordinarily inconsistent with the professional ethics of physicians,” Mr. Pegalis said in an interview.

@|Joel Stashenko can be contacted at [email protected].