Nevada recently signed into law AB404, which will amend the existing law on the non-economic damage cap in medical malpractice cases. AB404 increases the cap to $750,000 over several years. AB404 also increases the time plaintiffs have to file medical malpractice lawsuits and changes how lawyers can charge their fees. Below is a breakdown of these changes and the implications for Las Vegas and other Nevada medical malpractice victims.
What Is AB404?
Assembly Bill 404 was signed into law in June 2023. The new law brings changes to the Nevada medical malpractice landscape. AB404 has only three elements: non-economic damages, the statute of limitations, and contingency fees for lawyers.
How Does AB404 Affect Medical Malpractice Claims in Las Vegas?
1. Increasing Caps on Non-Economic Damages
Before this new law, the amount of non-economic damages a plaintiff could receive in Nevada medical malpractice cases was capped at $350,000. The cap was applicable regardless of how many healthcare providers were held liable, the number of plaintiffs, or legal theories upon which a claim might be based.
Under AB404, the cap will increase to $435,000 in 2024 and keep rising by $80,000 every year until January 1, 2028, when it will reach $750,000. From January 1, 2029, the non-economic damages cap will continue increasing at a flat rate of 2.1% per year. The law also requires the Nevada Supreme Court to publish the maximum non-economic damages that plaintiffs could be awarded in legal actions against healthcare providers based on professional negligence on its website annually for the next 20 years.
There’s no cap on economic damages, such as medical expenses and lost wages.
2. Extended Statute of Limitations
Plaintiffs have had to file medical malpractice lawsuits not more than one year from the date they discovered or reasonably should’ve discovered their injury or three years from the date of the incident that gave rise to the injury, whichever date occurs earlier. AB404 doubles the statute of limitations for some medical malpractice claims.
Starting October 1, 2023, the new law will give you two years from the date you discover or reasonably should have discovered the injury to bring a lawsuit. However, the three-year maximum from the date of the malpractice incident remains in place.
3. Attorney Fees Changing to Flat Fee Structure
Before the new law, the contingent fee that a medical malpractice lawyer could collect from a plaintiff in Nevada was a decreasing percentage of each tier or band of the financial recovery. The lawyer would collect:
- 40% of the first $50,000
- 33.3% of the second $50,0000 recovered
- 25% of the next $500,000, and
- 15% of any remaining amount of recovery (i.e., recovery exceeding $600,000)
AB404 replaces this tiered sliding scale system with a flat maximum fee of 35% of the amount recovered.
Impact of the New Law AB404
AB404 was a compromise from AB209, a bill that sought to remove the caps altogether. Both bills were introduced in response to the 2004 referendum, in which Nevada voters approved the initiative to cap medical malpractice non-economic damages at $350,000 and reduce the statute of limitations to one year.
The approval followed a hefty financial push by healthcare providers and insurance companies, including television ads that showed doctors leaving Nevada because of high medical malpractice insurance costs. The campaign helped persuade voters to approve a healthcare industry-backed ballot initiative that imposed the $350,000 cap on non-economic damages. As the Las Vegas Sun reported, a national consumer advocacy group and congressional study found that the healthcare industry spent millions of dollars to exaggerate the rate at which doctors were leaving the state and the malpractice crisis at the time.
There have been growing concerns among medical malpractice attorneys and legislators that malpractice victims aren’t adequately compensated in cases involving serious medical mistakes. For example, patients who fall victim to medical malpractice that causes irreversible or life-altering harm like wrong-site amputation or surgery, failed reproductive functioning, or death would be stuck with $350,000 or less for non-economic damages despite the level of pain and suffering experienced.
The cap has also been associated with a drop in accountability in the medical profession. A good example is the outbreak of hepatitis C that occurred in a Las Vegas endoscopy facility where syringes and vials were reused. Higher caps or elimination of caps would force insurance companies to ensure medical professionals meet acceptable standards of care.
AB404 initially proposed increasing medical malpractice non-economic damages from $350,000 to $2.5 million, with the new amount being adjusted annually according to the inflation rate. The bill would also lengthen the statute of limitations from three to four years after the date of the malpractice incident and from one to two years after the date the injury was discovered or should’ve been discovered. The medical community opposed the bill, arguing that it would cause business relocations or closures in the state due to increased operation costs.
Trail lawyers and healthcare providers had to hold discussions and settle on a compromise. As a result, this medical malpractice bill underwent considerable compromise before being passed and signed into law.
Does AB404 Help Malpractice Victims?
Starting in 2024, the cap on non-economic damages will rise from $350,000 to $435,000. That may look impressive at first. However, when you take inflation into consideration, $350,000 in 2004, when the ballot initiative took place, would be equivalent to over $560,000 in 2023, according to inflation calculators. Therefore, if adjusted for inflation alone, the cap would need to rise to between $550,000 and $600,000. Even then, the rise would merely be an inflation adjustment.
The 2.1% rate of increase that begins in 2029 would make the non-economic damage caps fail to rise at the annual rate of inflation. These non-inflation-adjusted caps may keep lagging behind inflation and rising costs, making them inherently unfair to medical malpractice victims.
The current cap was restrictive to personal injury lawyers. Medical malpractice cases are usually complex and expensive. Lawyers have to spend thousands of dollars when extensively reviewing medical records and consulting several medical experts. The cap would make lawyers turn away some clients, as they would end up losing money on their cases. The continual increase in non-economic damage caps may make lawyers more open to taking on medical malpractice cases. More cases without substantial damages could, therefore, benefit from legal representation.
Time Limits and Attorney Fees
The one-year statute of limitations was considered short for various reasons. Hospitalization, medical appointments, therapy sessions, and other forms of treatment can be overwhelming for patients and their family members during that first year. As a result, they may focus on the medical care needed and not think about filing a lawsuit or hiring a medical malpractice attorney during that short period. Many families may realize they have a valid medical malpractice case after the one-year time limit has passed.
One year may severely limit the period a family has to cope with a loved one’s injuries, suffering, or loss and to decide whether to bring a medical malpractice case. Some injuries may be hard to discover and link to a doctor’s malpractice. For example, you may not know about a surgical error until you start experiencing severe symptoms. Such symptoms may take months or even more than a year to appear.
These factors may make malpractice victims or their families unable to pursue litigation within the one-year statute of limitations. Increasing this time from one to two years is a slight improvement and gives Nevadans more time to file medical malpractice lawsuits. However, considering other provisions related to the statute of limitations, such as tolling provisions and the three-year maximum limit, remain unchanged, the extended statute of limitations fails to adequately address cases where an injury is discovered several years after the occurrence of the malpractice incident.
The flat 35% limit may not make a significant difference to the amount of compensation or verdict that victims receive after the deduction of lawyers’ fees due to the low rate of increase of the non-economic damages cap. A major advantage of the new flat fee structure over the tiered system is it’s easier for plaintiffs to understand.
Considering the major compromise the bill had to go through before it was passed, the improvements provided are unlikely to benefit medical malpractice victims significantly. The compromise that was eventually reached was less than optimal for victims. Insurance companies will be the bigger beneficiaries because they’ll charge medical professionals higher premiums because of the potential for higher payouts in malpractice cases. Healthcare providers will benefit from remaining protected from being held fully accountable for serious mistakes they commit.
How a Medical Malpractice Lawyer Can Help You
Navigating the Nevada legal landscape and getting the best possible settlement in light of the changes brought about by AB404 may be challenging. You can schedule a free consultation with a Las Vegas medical malpractice lawyer to gain further insight into how the new law may affect your situation. A knowledgeable lawyer will answer all your questions and inform you about any other relevant Nevada medical malpractice laws that may apply to your case.
If you or a loved one was injured due to medical malpractice, a consultation with a lawyer allows the lawyer to review your case to determine if you have a valid claim and provide information to help you make better decisions regarding your case.
Having legal representation leaves you and your family free to focus on your recovery and getting your life back, as your lawyer handles all the paperwork, court filings, and any other legal heavy lifting. Whether your case involves wrongful death, a diagnostic error, or any other form of medical malpractice, your lawyer will work to get you the best possible outcome.
Your lawyer will investigate your case, gather evidence necessary to prove medical negligence, and negotiate a proper settlement with the insurance companies of the liable healthcare providers. Your lawyer will represent you in court if negotiations fail to bring you a favorable settlement.
Medical malpractice cases are inherently complex, so seeking the assistance of a medical malpractice attorney right away helps you avoid missing crucial statute of limitations deadlines and gives you the best chance of achieving a positive outcome.