Amid unprecedentedly high verdicts recently awarded in Nebraska and other Midwest states, two bills were introduced this month in the Nebraska Legislature to amend sections of the Nebraska Hospital-Medical Liability Act (“Act”). Under this Act, damages against qualified healthcare providers for medical malpractice claims are capped at $2.25 million. To be a qualified provider under the Act, healthcare providers must be insured in the amount of $500,000 for each occurrence and $1 million for all occurrences in any policy year. Hospitals are required to be insured in the amount of $500,000 for each occurrence and $3 million dollars for all occurrences in any policy year. For damages awarded against qualified providers exceeding $500,000, the Excess Liability Fund will pay for remaining amounts allowed under the damage cap.
Legislative Bill 68 – L.B. 68, 2023 Leg., 180th Sess. (Neb. 2023)
LB 68 increases the required liability insurance for providers to $1 million/occurrence and $3 million for all occurrences in a policy year. The Excess Liability Fund would only cover damages that exceed $1 million. Essentially, the amount of required insurance for qualified providers doubles, but the $2.25 million damages cap would still apply.
Legislative Bill 351 – L.B. 351, 2023 Leg., 180th Sess. (Neb. 2023)
LB 351 requires healthcare providers to carry liability insurance $10 million/occurrence and $20 million for all occurrences in a policy year. The required insurance for hospitals would be $10 million/occurrence and $30 million for all occurrences in a policy year. This bill removes the damages cap for any occurrence resulting in any “catastrophic injury” or death. Notably, LB 351 does not define “catastrophic injury.” For all other claims or occurrences arising after December 31, 2023, health care providers are liable for up to $10 million in damages. The total amount paid from the Excess Liability Fund cannot not exceed $30 million. Claims requiring payment from the Excess Liability Fund are paid in the order in which they are received. Any unsatisfied amount carries forward to the following calendar until the claim is satisfied.
If the damage cap drastically increases for claims under the Nebraska Hospital-Medical Liability Act, there will likely be a substantial increase in medical expenses in the State of Nebraska. This contradicts the policy rationale for the cap and the creation of the Nebraska Excess Liability Fund, which have led to lower health care costs and increased availability of health care for the citizens of Nebraska. LB 351 would likely reverse this progress. It will be important for healthcare providers, hospitals, and insurers to stay updated on the status of LB 68 and LB 351.
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