The Effects of House File 161 on Damages Recoverable against Health Care Providers

On February 8, 2023, the Iowa House and Senate passed House File 161, a bill that affects monetary noneconomic damages awards and punitive and exemplary damages awards allowed in medical malpractice lawsuits against healthcare providers.

The bill—which is expected to be signed into law soon by Iowa Governor Kim Reynolds—caps noneconomic damages a jury may award to plaintiffs. The damages cap for the affected lawsuits is $1 million, or, if the lawsuit also names a hospital, the cap is $2 million. HF 161 also amends Iowa’s punitive or exemplary damages statute as applied to the recovery of these damages against certain listed health care providers. These, and other amendments contained in HF 161, are discussed more below.

The Noneconomic Damages Statute

Iowa Code section 147.136A already capped noneconomic damages against certain healthcare providers at $250,000. The cap applied to lawsuits for personal injury or death, regardless of whether they were based on tort, contract, or some other legal theory, and it applied regardless of the number of plaintiffs, derivative claims, theories of liability, or the defendants in the lawsuit.

Importantly, an exception allowed juries to award more than the $250,000 cap: namely, a jury could award more when it found “a substantial or permanent loss or impairment of a bodily function, substantial disfigurement, or death, which warrant[ed] a finding that imposition of such a limitation [i.e., the $250,000 damages cap] would deprive the plaintiff of just compensation for the injuries sustained.” 

In other words, the exception held the $250,000 damages cap did not apply when a jury found it would deprive a plaintiff of just compensation for certain defined losses. HF 161 changes this and limits the amount juries can award under this exception.

Noneconomic Damage Definition

Section 147.136A defined noneconomic damages. The definition included “damages arising from pain, suffering, inconvenience, physical impairment, mental anguish, emotional pain and suffering, loss of chance, loss of consortium, or any other nonpecuniary damages.” 

The new amendments left this definition intact but add a section clarifying that certain kinds of damages are not within the definition. Namely “noneconomic damages” do not “include the loss of dependent care, including the loss of child care, due to the death of or severe injury to a spouse or parent who is the primary caregiver of a child under the age of eighteen or a disabled adult.” These are considered economic damages rather than noneconomic damages. With the new bill, the noneconomic damages cap does not apply to the loss of dependent care as described in the new section.

Noneconomic Damages Award Provision

As noted, HF 161 modifies the part of Iowa law that imposes a cap on noneconomic damages.  Specifically, it modifies the provision that allows juries to give a higher award for certain defined losses when the $250,000 cap would deprive the plaintiff of just compensation. 

The bill modifies this provision in two respects: first, it adds “loss of pregnancy” to the list of losses for which plaintiffs may recover noneconomic damages; second, when a jury finds a deprivation of just compensation for the losses allowed under the statute, “the amount recoverable shall not exceed one million dollars, or two million dollars if the civil action includes a hospital as defined in section 135B.1.” These two caps are additions to the pre-existing law (Section 147.136A), which formerly did not impose a statutory limit a jury could award for “just compensation.” 

The bill adds a new subsection to Section 147.136A to increase the limitations on these damages. They increase by two and one-tenth percent on January 1, 2028, and each January 1 thereafter.  And the new section clarifies that the limitations on damages shall be the amount effective at the time of the occurrence, which is the event, incident, or happening that caused the injury or damages for which recovery is sought. 

Punitive Damages Amendments

HF 161 also amends Iowa’s punitive damages statute, Iowa Code section 668A.1. This section allows a jury, or the court sitting as the factfinder, to impose punitive or exemplary damages after finding that a defendant’s conduct that gave rise to the claim “constituted willful and wanton disregard for the rights or safety of another.” 

The factfinder would also have to decide whether the defendant’s conduct was directed specifically at the claimant or at the person from which the claimant’s claim was derived. If so, the claimant was entitled to the full award of punitive or exemplary damages, but if not, the claimant was entitled to no more than 25% of the punitive damages, and the other 75% would go to a trust fund administered by the state.

In essence, the new amendments allow a full recovery of punitive damages on claims “against any physician and surgeon, osteopathic physician and surgeon, dentist, podiatric physician, optometrist, pharmacist, chiropractor, physician assistant, or nurse, licensed under chapter 147, or a hospital licensed under chapter 135B, arising out of patient care.” The section providing for payment of punitive damages into the state trust fund was amended to not apply to claims against these care providers.

Looking Forward—Effective Date and Applicability

These changes take effect immediately upon enactment by Governor Reynolds. It will apply to lawsuits that accrue on or after the effective date.  Once signed into law, this legislation creates new limits on what plaintiffs can recover, and consequently, what health care providers can be liable for, in noneconomic damages for the above-described losses.