Doctors press more states to cap malpractice payouts
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Rising liability insurance costs are prompting doctors to call on states to impose more limits on the damages patients can collect in malpractice cases.
Why it matters: More than half of the states have enacted malpractice payout limits, in an effort to make insurance premiums more predictable.
- But groups led by the American Medical Association say that without more relief, physicians will relocate from high-cost states, leaving patients with fewer care options.
State of play: About 40% of medical liability premiums increased from 2024 to 2025, according to an analysis the AMA released last week.
- It marked the seventh consecutive year that premiums rose, even though the share of physicians sued fell during that time, according to a separate AMA study.
- The effects were pronounced in states like New York and Pennsylvania, where more than 90% of liability premiums increased last year.
- Pennsylvania's surge comes after the state loosened the rules for bringing medical malpractice lawsuits in 2023, in response to a ruling from its supreme court.
Zoom in: Higher liability premiums typically fall on doctors in specialties like OB-GYN and general surgeons, who are sued more often.
- They are paying nearly $244,000 in Miami-Dade County, Florida, this year, compared with about $60,000 for internal medicine doctors, per AMA.
- In New Jersey, a lower-premium state, OB-GYNs pay about $94,600, while internists pay $18,410.
- The high cost of insuring OB-GYNs is factoring in maternity services closures across the country.
What they're saying: AMA President Bobby Mukkamala says the latest data should be a wake-up call to states that haven't enacted caps in response to high jury verdicts.
- When malpractice case judgements are "so variable and unpredictable, then insurance companies basically see no choice than to say we have no idea what's going to happen... that's why these premiums go up," he told Axios.
New Mexico became the latest state to overhaul its malpractice laws earlier this year.
- A new tiered system caps punitive damages at different levels for independent physicians and clinics, locally owned hospitals and corporate health systems.
- The system "protects patients who have been harmed by medical malpractice while making it possible for physicians to practice here without fear of bankruptcy," Gov. Michelle Lujan Grisham (D) said at the time.
- Colorado approved annual increases to its malpractice caps starting in 2025, but the state's supreme court later ruled that awards can exceed those amounts if a plaintiff establishes good cause, leaving it to a jury to determine damages.
Flashback: Providers say the insurance costs hark to the early 2000s, when insurers left markets and lawsuit payouts surged.
- Nearly half of hospitals surveyed in 2003 reported that liability costs caused them to lose physicians or emergency department coverage, AMA said.
The other side: Malpractice lawyers and some patient advocates say caps on payouts and other liability changes restrict patients' rights.
- The legal community resisted New Mexico's overhaul. The tiered caps won't "reduce the injury or harm to people. They'll still be harmed; they just won't have access to justice," Cid Lopez, an attorney who specializes in medical malpractice, told Searchlight New Mexico.
- Some past state efforts ran afoul of courts, with judges finding the laws encroached on courts' ability to set their own procedural rules.
What we're watching: Whether more states follow New Mexico's lead — and whether those changes actually influence where physicians decide to practice.
