Ten years ago, the Missouri Legislature passed legislation that capped non-economic damages in medical malpractice cases at $350,000. The decision was made to control the increasing number of frivolous lawsuits, reduce medical malpractice insurance rates and prevent doctors from leaving the state. The legislation worked. Lawsuits dropped, doctors remained in Missouri and victims of medical malpractice were compensated.

However, in 2012, the Missouri Supreme Court ruled that law unconstitutional, removing the caps. That decision has begun to have dire effects on our state. Medical malpractice insurance rates for physicians have skyrocketed, and those costs are beginning to be passed on to consumers. It is also driving doctors from the state. In fact, Missouri is a net-exporter of physicians. More doctors choose to practice outside of the state than within, particularly specialty physicians, such as OBGYNs.

The Senate addressed the problem this year by passing Senate Bill 239, which creates a statutory cause of action for damages against health care providers for personal injury or death arising out of the rendering of or failure to render health care services. In such action against a health care provider, a plaintiff cannot recover more than $400,000 in non-economic damages for personal injury; no more than $700,000 in non-economic damages for a catastrophic personal injury; and no more than $700,000 in non-economic damages for death. To adjust for rising expenses, these limitations will increase by 1.7 percent each year. There is no cap on actual economic damages.

The legislation reestablishes sensible caps that will help control health care costs, keep doctors in Missouri and allow plaintiffs to be fairly compensated for damages that are hard to quantify and completely subjective.

The Senate also passed legislation I am sponsoring to change how multi-state corporations allocate their revenue between states for tax purposes. Two years ago, a new law went into effect to give such corporations a third option, one that benefited companies that have headquarters in the state. The Missouri Department of Revenue used a strained interpretation to say that law only applied to manufacturers leaving the service industry out of the changes. Senate Bill 19 makes it clear that service businesses can use the new allocation option as well. Our tax laws should be as fair and consistent as possible, and Senate Bill 19 moves us in that direction.

Budget

The budget bills, which originate in the House, were approved and sent to the Senate. The Appropriations Committee will take up those bills, make the Senate’s changes and then present them on the floor, where we will have the opportunity to discuss the funding allocations for the next fiscal year. The task is the only duty we are constitutionally required to complete each session. We must also create a balanced budget. The budget is where public policy meets reality, and we must sometimes make tough decisions to maintain the financial stability of our state.

The Senate will hold extensive debate on the bills before approving them. After that, the Senate and House will go to conference committee to iron out the differences. The budget process is ahead of schedule this year. I expect we will begin discussing those bills after returning from the annual spring recess.

Please feel free to contact me with any questions or concerns at any time. We look forward to hearing your comments and suggestions, and trying to answer any questions you may have. You can reach us by phone at 573-751-1464, or e-mail at will.kraus@senate.mo.gov.