State OK’s $2.5M in UIHC settlements after inking deal upping physician liability

The State Appeal Board agreed Tuesday to pay $2.52 million to settle six lawsuits against University of Iowa Health Care — with the doctors and their insurance paying most of the total under a new agreement that lessens the burden on taxpayers.

Of the total $2.52 million in UIHC-related settlements — which the State Appeal Board paused last month as the new deal was being negotiated — the UI Physicians medical and surgical group will cover $2.1 million, with the balance of $388,250 coming out of the state’s taxpayer-supported general fund.

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

The state’s new seven-year limited self-insurance agreement with UIHC, signed Aug. 30, now caps the amount UI Physicians pays per claim at $6 million and the amount it pays per year at $15 million. The agreement, effective from Sept. 1 through June 30, 2030, also maps out annual cap increases of up to 5 percent beginning in July 2026.

UI Physicians is a UI Carver College of Medicine-based practice group, which involves 1,000-plus physicians and owns an insurance company established to provide medical malpractice coverage to the university’s physicians.

It replaces an old deal that capped UI Physician coverage at $5 million per claim and $9 million per year — meaning this new deal would have the physician group paying more settlement costs per case and annually.

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.

The renegotiated deal follows passage of a new state law earlier this year that caps jury awards for pain, suffering and other non-economic damages from medical malpractice lawsuits at $2 million for cases in which a hospital is found at fault — and $1 million when the doctor is found at fault. The new law doesn’t cap jury awards for economic or punitive damages.

Tuesday’s group of six approved UIHC-related settlements included a $2 million payment to the estate of a woman who died in late 2019, 15 days after what her family called a “surgical error.”

The other settlements involved accusations of discrimination, retaliation, facilities upkeep and more medical malpractice — including one woman who received “the wrong type of implant” in her breast augmentation surgery. She was paid $75,000.

The case resulting in the $2 million settlement — to be paid entirely by UI Physicians — stemmed from a lawsuit filed in August 2021, not quite two years after Joan Clark died at age 72 on Dec. 31, 2019.

Having been deemed “very healthy” and an active member of her community and church — still employed as township clerk for both Rock Island Township and Moline Township at the time of her death — Clark in December 2019 underwent a procedure to address an aneurysm.

Clark, from the operation, suffered an intracranial bleed, requiring a second surgery by a resident who was supervised by the original surgeon, David Hasan. A drain placed during that operation “did not end up in the desired location,” according to settlement documents, requiring a third procedure.

“Clark’s condition declined into lack of consciousness, and she later passed away,” according to the settlement, noting, “The surgeon who performed the original surgery is no longer at UIHC.”

A jury trial was scheduled earlier this summer, with the state projecting “the average verdict for this type of injury is $10 million” — given medical expenses, lost wages, and pain and suffering.

“Joan Clark never recovered from the injuries she suffered as a result of defendants’ negligence, and she never recovered significant neurological function after the December 16th aneurysm coiling surgery,” according to the lawsuit.

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