Wisconsin Medical Malpractice Fund Has Troubling Surplus

State officials who conducted an audit on the Wisconsin Injured Patients and Families Compensation Fund have announced that the fund has a surplus of $783 million. This figure is $406 million larger than recommended by auditors. Advocates for victims of medical malpractice are condemning these findings, characterizing them as evidence that the limitations placed on malpractice lawsuits are preventing injured patients and their families from getting the compensation they deserve.

The mission of the Injured Patients and Families Compensation Fund, which was created in 1975, is to provide excess medical malpractice coverage to Wisconsin health care providers and to ensure that funds are available to compensate injured patients. The Fund covers damage awards for malpractice which are in excess of one million dollars (doctors are required to carry their own malpractice insurance which covers damages up to this amount). The account is funded by fees which doctors, hospitals, and other healthcare providers are required to pay on an annual basis.

The state of Wisconsin has enacted legislation which severely curtails malpractice recovery. According to the National Practitioner Data Bank, the state ranks 49th in malpractice payments per capita for the period of 2004-2014. The main reason for this is that state legislation has capped damages for such claims. Non-economic damages (those that cover losses such as pain and suffering) for medical malpractice claims in Wisconsin are capped at $750,000. Wrongful death claim damages are capped at $500,000 for children and $350,000 for adults. University of Wisconsin-Madison doctors are in their own category, with individual malpractice caps of $250,000 in total damages. In contrast, non-economic damage awards in Maryland are capped at $815,000 and Washington, D.C. has no cap on non-economic damages.

In addition to these caps on compensation, state legislation severely limits who may bring certain types of malpractice claims. Parents in Wisconsin are prohibited from suing if their adult children die from a medical error, and adult children also do not have standing to bring suit if their parents die due to medical malpractice.

The fees that flow into the fund are already being reduced, but the audit recommended that the Office of the Commissioner of Insurance, which administers the fund, develop a more robust plan to bring the surplus down to the recommended range.

Mike End, a medical malpractice attorney in Milwaukee and former president of the Wisconsin Association for Justice, was critical of the surplus and the state regulations on malpractice claims, stating “There are fewer and fewer people every year recovering compensation and getting into the fund money.”

Mr. End may not be the only one with concerns regarding the limitations on malpractice victims. In a 2014 case,
a Milwaukee County judge refused to apply the $750,000 cap for a woman who won $16.5 million in non-economic damages from a jury after losing all four limbs from an immune system reaction to an undetected infection. Cases such as these present a strong argument for why low malpractice damage caps can be incredibly unfair to victims and their families.