This section contains resources such as an explanation of Indiana's Medical Malpractice Act, the health of the Patient's Compensation Fund (PCF) and the PCF surcharge, discounts on commercial malpractice insurance, a list of insurance carriers and more.
Click on the headline below to access the information:
Overview of Indiana Medical Malpractice Act
In 1975, Indiana became the first state in the nation to enact comprehensive malpractice reforms. The Indiana Compensation Act for Patients (INCAP) became a model for other states, as it balanced the needs of physicians for affordable liability insurance premiums with the needs of patients for good access to all kinds of medical care.
Our law contains components that have made it effective for three decades:
As a result of INCAP, physicians in Indiana have experienced lower medical malpractice insurance premiums than physicians in other states. Patients have had access to medical care, unlike in other areas where malpractice crises led to cutbacks in procedures and physicians retiring or relocating.
For 40 years, INCAP has compensated injured patients while maintaining patients access to care and protecting providers from unreasonably high insurance rates. Read the strengths and weaknesses of INCAP.
Key Features of Indiana’s Act
ISMA has compiled a one-page summary of some of the key features of the Act. It discusses the key features that distinguish Indiana’s Act from other states’ laws, physicians’ obligation to purchase malpractice insurance, the time limit for filing malpractice lawsuits in Indiana and the process by which patients must bring suit.
Health of Indiana’s Patient’s Compensation Fund (PCF)
The Indiana Department of Insurance manages the PCF and publishes an annual report on the payments and health of the Fund. The report summarizes the number and type of claims filed, the number and type of claims paid and the overall financial health of the Fund. The report also includes historical figures dating back to the Fund’s inception in 1975. Click here to see the 2015 PCF Report (most recent available). For more current information, contact the Indiana Department of Insurance or ISMA’s Legal Department.
Discounts on Commercial Malpractice Insurance and PCF Surcharge
IRMIA -- Pursuant to a 2006 ISMA resolution, physicians enrolled in IRMIA, the state’s high-risk insurance pool, have the option for the first time to pay their commercial premiums in three installments rather than one lump sum.
Some medical malpractice insurance carriers offer discounts to physicians who participate in one or more risk management programs offered by the carrier. Physicians should contact their carrier for details.
Some physicians may be eligible for discounts on their PCF surcharge. These groups include physicians who practice medicine on a part-time basis, medical school faculty, newly licensed physicians, physicians participating in fellowship programs and retired physicians. The following is a general overview each of those credits. Only one credit may be applied per year.
Physicians working part-time can receive a credit to their surcharge based on the number of hours worked. 760 IAC 1-60-5.
12 hours per week (or less) = 75% credit
>12 and < 25 = 50% credit
> 25 and <31 = 25% credit
Medical school faculty can receive a credit equal to 67 percent of the surcharge amount. Not more than 30 percent of the physician’s time may be spent treating patients (unrelated to duties at the medical school). Faculty is defined in the law. 760 IAC 1-60-5.
Newly licensed physicians can receive a credit equal to 50 percent of the surcharge amount their first year of practice and 25 percent their second year. "Newly licensed physician" is defined in the law. 760 IAC 1-60-5.
Physicians participating in fellowships pay 50 percent of their surcharge due for the specialty class of that fellowship if the fellowship is full-time and the physician is not working in any other medical practice. If the physician is working in a medical practice outside the fellowship, the physician must pay the greater of the full-time surcharge due for the medical practice outside of the fellowship or 50 percent of the surcharge due for the specialty class of the fellowship. 760 IAC 1-60-5.
Retired physicians pay an annual surcharge of $500. 760 IAC 1-60-5.
Contact your insurance agent and/or malpractice insurance carrier to find out if you are eligible for these or other discounts on your insurance. Physicians are responsible for notifying their insurance carrier immediately of any change in their practice status.
Immunity from Malpractice Liability (Volunteers, Clinics, Good Samaritan, etc.)
Some physicians are immune from medical malpractice liability under certain circumstances. These include some volunteer activities, some work at community health centers and free clinics, and good samaritan acts. Contact ISMA’s Legal Department if you have questions about immunity.
White Paper on the History of Indiana’s Medical Malpractice Act
ISMA has documented the history of Indiana’s Medical Malpractice Act, formally called the Indiana Compensation Act for Patients (INCAP). Click here to read the white paper.
List of Insurance Carriers
ISMA has compiled a list of the five insurance carriers that write the most medical malpractice insurance policies in Indiana. ProAssurance is ISMA’s endorsed carrier. IRMIA is the state’s high risk pool and is available to physicians who cannot obtain malpractice insurance through any other commercial carrier. It is significantly more expensive than other commercial policies; therefore, it is usually a last-resort option.
ISMA has the ability to participate in litigation that is of such a nature that the issues presented are of significant concern and impact on the practice of medicine as a whole. Usually this participation is in the form of an amicus curiae (friend of the court) brief. ISMA’s Board of Trustees has the sole and exclusive authority to make this determination. ISMA has elected to participate in several significant legal matters on behalf of all Indiana physicians in the past.
Ledbetter v. Hunter, Benken & Ball Memorial Hospital (February 22, 2006)
Plaintiff sued physicians and hospital who attended her daughter’s birth for complications that caused serious and permanent physical and mental injuries. The suit was filed nearly twenty (20) years after her birth. The trial court dismissed the case because it was not filed within the statute of limitations – i.e., by the child’s 8th birthday. The court of appeals reversed, holding that the statute of limitations for minors was unconstitutional. ISMA filed an amicus brief supporting the constitutionality of the Act. The Indiana Supreme Court adopted ISMA’s position and concluded that the Act’s statute of limitations for minors was constitutional, thus dismissing the case. The ISMA was the only health-related entity or association that filed an amicus brief in this case.
Indiana Patient’s Compensation Fund v. Butcher (March 16, 2007)
Mr. and Mrs. Butcher sued a hospital for failure to diagnose fetal distress at 38-weeks gestation. The child was born with severe injuries and died shortly thereafter. The trial court awarded the parents three cap level ($1,250,000) awards: one for the mom’s physical and emotional injuries; one for the dad’s emotional injuries; and one for the death of the child (because it was born alive). The total liability to the Patient’s Compensation Fund was $3,500,000. The Patient’s Compensation Fund appealed to the Indiana Court of Appeals and ISMA and the Indiana Hospital and Health Association filed a joint amicus brief. ISMA and the IHHA reminded the court of the purpose behind the Act and argued that the father was not a patient and therefore was not entitled to a separate damages cap. The Indiana Court of Appeals agreed, unanimously reversing the trial court. The court concluded that the mom did not suffer malpractice and that the only victim of the malpractice was the baby. Relying on Indiana Supreme Court precedent, the court then concluded that, because there was only one actual victim of malpractice, there could only be one cap level damages recovery. The parents’ recoveries for emotional distress were subsumed within their claim for the wrongful death of the child. The court set aside the separate caps awarded to each of the parents, returning $2,500,000 back to the Fund. The ISMA was the only physician organization that filed an amicus brief in this case.
Indiana Patient’s Compensation Fund v. Winkle (March 16, 2007, transfer denied)
Mr. and Mrs. Winkle sued for failure to treat Mrs. Winkle’s severe malnutrition and vitamin deficiencies, which resulted in her permanent and severe injuries and the loss of her fetus at 17 weeks gestation. The trial court judge awarded three cap level ($750,000) awards: one for the mom for her physical injuries and one each for the mom and the dad for their emotional distress injuries associated with the loss of the fetus, for a total of $2,150,000 from the Patient’s Compensation Fund (PCF). Because the child was unborn, Indiana law prevented a separate wrongful death claim for the loss of the child. The PCF appealed to the Indiana Court of Appeals and ISMA filed an amicus brief arguing that the father was not a patient and therefore was not entitled to a separate damages cap. The PCF made separate arguments that Mrs. Winkle should not be able to recover two caps. On March 16, 2007, the Indiana Court of Appeals issued an opinion unanimously reversing the trial court. The court concluded that the parents’ emotional distress damages were derivative and therefore there had to be a patient from whom they derive. Under Indiana law, a “patient” must be a living person. The parents could not have separate emotional distress damages caps because their unborn child was not a patient. Thus, any emotional distress damages associated with the loss of the unborn child had to fall under the mom’s physical injuries damages cap. The court set aside the two emotional distress caps, returning $1,500,000 back to the Fund. The plaintiffs filed a petition for rehearing from the Indiana Court of Appeals, which was denied. The plaintiffs also petitioned fortransfer to the Indiana Supreme Court, which was denied on Sept. 17, 2007. The ISMA was the only health-related entity or association that filed an amicus brief in this case.
Ho v. Frye (Indiana Supreme Court, February 21, 2008)
Read the Supreme Court opinion.
Dr. Ho, a Board Certified OB/Gyn, performed an abdominal surgery on Ms. Frye in Putnam County Hospital in October 2000. The hospital-employed nurse indicated to Dr. Ho, who was not a hospital employee, that the pre- and post-operation sponge counts matched. In fact, they did not. Plaintiff Frye sued the hospital and Dr. Ho for injuries associated with the retained sponge. The medical review panel unanimously found both Dr. Ho and the hospital failed to meet the applicable standard of care. The hospital settled the case. At trial, the jury found in favor of Dr. Ho, but the court overturned the decision and ordered a new trial on the grounds that plaintiff’s motion for partial summary judgment should have been granted. On appeal, Dr. Ho argued that issues of material fact existed regarding whether he was negligent and that he was not strictly liable and should be entitled to present his expert testimony on the issue to the jury. The plaintiffs argued that, as a matter of law, Dr. Ho was negligent when he failed to remove the sponge.
The Indiana Court of Appeals affirmed the trial court’s ruling on April 30, 2007. It refused to consider any evidence that the surgical nurse was an employee of the hospital charged with the duty to count sponges. Relying on Indiana Supreme Court case law from 1932, it stated that a surgeon cannot “delegate the absolute authority and responsibility to a nurse or nurses to account for sponges and to thus escape responsibility himself.” This theory, which is premised on the idea that a surgeon is ultimately responsible as a matter of law for essentially everything that occurs during a surgery, was later called the "captain of the ship" doctrine.
On appeal to the Indiana Supreme Court, ISMA and AMA filed a joint amicus brief in May 2007 explaining that the captain of the ship doctrine was outdated. It was adopted in the 1930s because charitable immunity laws prevented patients from suing hospitals, and courts wanted to provide injured patients with a means of recovery – the surgeon. Recognizing that it was ill-conceived and had outlived any usefulness, the Indiana Supreme Court joined the majority of other states in abolishing the charitable immunity doctrine in 1968. Additionally, medicine has evolved into clearly delineated roles and responsibilities for surgeons and hospitals (and their employees). Thus, argued ISMA and the AMA, the court should follow the majority of other states in recognizing that the doctrine was antiquated and should not be used to impose liability on surgeons for the actions of hospital employees as a matter of law.
The Indiana Supreme Court accepted the case and unanimously agreed with Dr. Ho and ISMA. The court acknowledged the 1932 language cited by the Court of Appeals but pointed to a different part of the opinion, which stated “it is for the jury to determine from the evidence whether the omission of certain treatment, like the failure to remove a lap-sponge used in the operation before the incision was closed, was or was not negligence.” The court then clarified that the case did not hold that a surgeon was absolutely liable as a matter of law for failure to remove unnecessary sponges used in a patient during surgery. Rather, the court said, “notwithstanding a surgeon’s assignment to assistants the task of tracking surgical sponges, the surgeon’s failure to remove a sponge is evidence of medical negligence and will support a jury verdict finding liability on the part of the surgeon.” In short, the surgeon’s negligence is an issue of fact for the jury. Further, the physician is entitled to present expert-witness testimony on the issue. Therefore, the Supreme Court reinstated the jury verdict in favor of Dr. Ho.
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