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Eighth District Court of Appeals Limits Future Medical Damages Against Political Subdivisions Based on the Affordable Care Act

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By Martin Galvin and Brian Gannon

August 9, 2016

In Jones v. MetroHealth Medical Center (2016-Ohio-4858) the Eighth District Court of Appeals recently partially affirmed a jury verdict of $3,451,000 against MetroHealth Medical Center, a municipally owned hospital.  The jury verdict was initially  $14,500,000, but was reduced to $3,451,000 by the trial court by applying two subsections of the same statute, one governing damage caps on noneconomic damages and one requiring offsets for payments from collateral sources for awards against political subdivisions.  This statute does not apply to private medical providers.

The appellate decision resulted in the verdict being increased from $3,451,000 to $5,151,000, because neither party requested interrogatories specifying the basis for the verdict.

Importantly, the court also addressed numerous constitutional challenges to medical malpractice tort reform and determined that these statutes were not only constitutional on their face, but were also constitutional “as applied.”  These constitutional challenges included improper exercise by the Legislature of judicial powers, under Article II, Section 32 of the Ohio Constitution. 

The allegations at trial were that the defendants failed to adhere to the standard of care when managing plaintiff mother’s pregnancy and supervising the birth of her child.  The plaintiff child was born at 25 weeks gestational age by way of C-section, and suffers from cerebral palsy, developmental delays, and visual impairment.

The jury specified the damage award to the child as follows:  $500,000 for past economic damages, $5,000,000 in noneconomic damages, and $8,000,000 for future economic damages.  The mother was awarded $1,000,000 for noneconomic damages. 

R.C. 2744.05(C)(1) limits noneconomic damages against political subdivisions to $250,000 per person.  Thus, based on this statute, the trial court capped the child’s $5,000,000 noneconomic damage at $250,000 and capped the mother’s $1,000,000 noneconomic damage at $250,000.  This application of the damages caps was affirmed.

R.C. 2744.05(B)(1), the political subdivision collateral offset statute, states that “the amount of the benefits (received for injury or loss from insurance or “any other source”) shall be deducted from any award against a political subdivision.”  Essentially, this statute requires that the amount of benefits received by a plaintiff from insurance or “any other source” for injury be deducted from any award against a political subdivision for that same injury.  In relation to the award of $500,000 in past economic damages, the court agreed that this award should be completely offset (or eliminated) because plaintiffs paid nothing “out of pocket” for these medical bills.

In applying R.C. 2744.05(B)(1) the court engaged in a detailed analysis of the child’s age and the number of years medical bills would be incurred prior to the child’s twentieth birthday (after which child would qualify for Medicare based on his father’s disability).  

The court considered the relevance of the Affordable Care Act (“ACA”) to the application of R.C. 2744.05(B)(1), and affirmed the trial court’s finding that the child’s maximum expenses (and thus maximum future medical expenses damages) for the eight year period for which he could obtain insurance under the ACA would total $116,000.  This number was reached by taking a maximum of $8,000 per year for premiums for medical insurance, and a maximum of $6,500 per year for out of pocket expenses, and multiplying the total by eight years. 

The court disagreed with the trial court that the entire award of $8,000,000 in future economic damages was for future medical expenses, as there was some evidence that at least $1,700,000 of this total might be for lost future income, which, unlike future medical expenses, is not subject to offset.  The reason the distinction matters is that the plaintiffs will receive benefits to cover future medical expenses, but will not receive benefits to cover future lost income.  Thus, one type of damages is subject to offset and one is not.

The court reinstated $1,700,000 of the original verdict, because it determined that there was no way to tell whether the jury had awarded loss of future income, in addition to future medical expenses, as part of the $8,000,000 award of “future economic damages,” without specific interrogatories.

The court’s discussion of the constitutionality of the relevant statutes is important because it rejected all of plaintiffs’ arguments concerning substantive due process and equal protection.  The Court disagreed with the argument that because the ACA, as well Medicare and Medicaid, are “political targets subject to privatization, budget cuts, and even repeal,” that it was unfair to base offsets relating to future medical expenses on the assumed continued operation of these programs, finding:

[A]ccepting [plaintiffs’] argument at face value would effectively bar all offsets because of the possibility that government programs might, someday, end.  ***  Accepting plaintiffs’ argument would effectively nullify the statute.

The court’s disposition of the cross-appeal was also significant because it held that a fetus has an independent cause of action for lack of informed consent. The lack of informed consent claim had been submitted to the jury on behalf of the child, (who was a fetus at the time the consent would have been obtained), even though the mother’s claim for lack of informed consent was indisputably barred by the statute of limitations.  The court looked at Ohio probate law, wrongful birth cases, opinions dealing with an unborn child’s right to recover for injuries suffered in utero, as well as case authority from other jurisdictions to determine that an unborn fetus may assert an independent claim for lack of informed consent.  Notably, this holding applies even where the unborn child’s mothergrants consent on behalf of the child based on information provided to her.”  Thus, even where a mother provides informed consent to treat a fetus, the fetus has an independent claim for lack of informed consent.  Left unanswered by this decision is how an unborn fetus (or indeed any young child) can ever assent to any medical procedure.

Jones v. MetroHealth is notable because of its determination that offsets are available to political subdivisions for benefits received through the ACA, as well as Medicare, Medicaid, Social Security, and other government programs. It is important to keep in mind that the specific offsets analyzed in this decision only apply to political subdivisions, as R.C. 2744.05 does not apply to private providers. 

While private medical providers may be better able to argue that future medical expenses should be limited to the expenses required to obtain coverage under the ACA or a similar program, time will tell whether courts or the legislature will make collateral offsets available to private entities and individuals. 

It is likely that there will be an appeal and cross-appeal of this decision to the Ohio Supreme Court.

If you would like a copy of the opinion or have any specific questions, feel free to contact a member of our Medical Malpractice or Governmental Liability Practice Groups.

This has been prepared for informational purposes only. It does not contain legal advice or legal opinion and should not be relied upon for individual situations. Nothing herein creates an attorney-client relationship between the Reader and Reminger. The information in this document is subject to change and the Reader should not rely on the statements in this document without first consulting legal counsel. 

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