In June 2019, the Kansas Supreme Court struck down the law that limits noneconomic damages (KSA 60-19a02) in Hilburn v. Enerpipe Ltd.   The Court’s decision is viewed by many as reversing its October 2012 ruling upholding the same cap in Miller v. Johnson, a medical malpractice case.

Although there can be no question that in Hilburn the Court struck down the cap in motor vehicle personal injury cases, we believe the question is unsettled as it relates to medical malpractice actions, because in conjunction with its Hilburn opinion, the Court issued a public press release which said it “struck down the statutory noneconomic damages cap in personal injury cases other than medical malpractice actions” (emphasis added).  Taken together, the two conflicting rulings have created uncertainty which can only be resolved when the Court has the opportunity to provide clarification in another medical malpractice case. 

If the noneconomic damages cap is ultimately struck down in medical malpractice actions, the Health Care Stabilization Fund is certain to sustain larger losses with much greater frequency.  Without the restraint of a cap on excessive jury verdicts, the liability environment will worsen, threatening the Fund’s solvency, and driving liability premiums significantly higher. 

Under the right conditions KMS strongly favors keeping the Stabilization Fund structure in place.  Established in 1976, this unique public-private partnership has provided tremendous benefit to Kansans.  For over four decades the Stabilization Fund has been a key component of a comprehensive legislative approach which balances the rights of injured patients with the state’s need to ensure access to medical care for all of its citizens. The Stabilization Fund assures patients that there will be a pool of money available to compensate them in the event they are injured as a result of a health care provider’s negligence. 

We believe the most prudent approach at present is to give the Court the opportunity to clarify the situation in a medical malpractice action, which is the only way we will have certainty about whether the cap is still applicable in those cases.  In the meantime, however, we propose the following changes to help us prepare for either outcome, favorable or adverse, in the following way:

• Amend the Stabilization Fund law to provide that if the noneconomic damages cap is ever declared unconstitutional by the Kansas Supreme Court in a medical malpractice action, then that would trigger a phasing-out of the Stabilization Fund, under the control of the Insurance Commissioner. In that event, the mandatory insurance coverage requirement for health care providers would also be repealed.

• To prepare for the event the cap is affirmed by the Court, we propose to further amend the Stabilization Fund law to increase the minimum coverage required from the current $300,000 per claim to $1 million per claim, and allow health care providers the option of obtaining an additional $1 million of coverage from the Fund.

This approach gives us the opportunity to update the Fund coverage components to address concerns over the adequacy of the minimum coverage requirement which was identified in the Miller ruling, while we await additional clarity from the Court on the cap.