$2M medical malpractice settlement at UIHC paused

The arrangement under consideration is between UIHC and UI Physicians, a UI Carver College of Medicine-based medical and surgical clinical practice encompassing 1,000-plus physicians that owns an insurance company established to provide medical malpractice coverage to UI physicians.

Under the agreement, the group pays up to $9 million annually for medical malpractice settlements involving UI physicians. UIHC and the group are potentially renegotiating that agreement, a state agency spokesman said Monday.

Roughly $13.7 million was paid from the state's general fund for settlements and judgments in the state budget year that ended June 30 according to state records. UIHC was the source of $9.7 million of those payments.

Because that cap on the physicians group's share of medical malpractice settlement costs may be renegotiated — presumably by raising the cap to allow it to pay a greater share of those settlements — a state panel during its regular monthly meeting Monday delayed approval of six proposed settlements. They included a $2 million medical malpractice settlement to the estate of a 72-year-old woman who died after surgery performed by a UIHC surgeon to address an aneurysm in 2019.

Joseph Barry, a spokesman for the Iowa Department of Management, said after Monday's meeting that the settlements "have a potential direct association with this topic" — renegotiating the payment cap — so the settlements' consideration was delayed until the September meeting of the three-member State Appeal Board.

The State Appeal Board, which approves settlements proposed by state entities, is comprised of the state auditor, management department director and state treasurer: currently Democrat Rob Sand and Republicans Kraig Paulsen and Roby Smith.

Barry did not respond to request for further information on the arrangement, nor did a spokeswoman for Sand's office. A spokesman for the Iowa Board of Regents, which governs the state's public universities, including the UI, declined to comment.

The agreement between UIHC and the physicians group is a "28E agreement," which according to the state law was designed to "permit state and local governments in Iowa to make efficient use of their powers by enabling them to provide joint services and facilities with other agencies and to cooperate in other ways of mutual advantage."

Under a new law passed this year by state lawmakers and signed by Gov. Kim Reynolds, jury awards for pain, suffering and other non-economic damages from medical malpractice lawsuits are capped at $2 million for cases in which a hospital is found to be at fault, and $1 million when the doctor is at fault.

That new law does not cap jury awards for economic or punitive damages.