Government

State of Iowa legal settlements hit five-year high

Medical liability at UI Hospitals 'growing problem'

(File photo) The Iowa State Capitol building in Des Moines, photographed on Tuesday, June 10, 2014. (Liz Martin/The Gaze
(File photo) The Iowa State Capitol building in Des Moines, photographed on Tuesday, June 10, 2014. (Liz Martin/The Gazette)

DES MOINES — Settlements involving medical malfeasance, discrimination and other missteps or mistakes by state employees or agencies drove fiscal 2020 victim payouts approved by the State Appeal Board to the highest level in five years.

While settlements and judgments paid by the state approached $15 million, board officials note that more than a third of the total — $5.3 million — was due to a reconciliation with the University of Iowa Physicians group to pay back money it was owed by the state in splitting medical malpractice costs under a cooperative agreement.

Otherwise, Joseph Barry, the state’s risk manager within the Iowa Department of Management who tracks settlements and judgments for the State Appeal Board, said a significant share of the payouts in the 12-month period ending in June were cases for past years that all got resolved in fiscal 2020.

“We had a few big ones hit right in a row — boom, boom, boom,” said Barry. “We had two or three that were uniquely large that just hit right in a row, so I think it’s an above-average year as far as what we paid out.”

The UI Physicians’ reimbursement warrant issued last week covered settlements above a $9 million annual limit outlined in the agreement created to protect and defend UI Health Care employees from medical malpractice claims.

According to the state board, UI Physicians — the state’s largest medical and surgical group practice, with more than 1,000 UI Carver College of Medicine physicians who serve as the UIHC medical staff — surpassed the settlement cap on settlement payments and attorney fees for the first time since the state-UI cooperative program began decades ago.

A dozen settlements involving the UI physicians group over the last budget year totaled $13.1 million, plus another $1.2 million in attorney fees, totaling $14.3 million in payouts for the year, according State Appeal Board documents.

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“Lawsuits are as unpredictable as the actions and accidents upon which they’re based,” said State Auditor Rob Sand, chairman of the three-member State Appeal Board. “I will, however, continue to lead the charge to increase an offender’s liability in cases of willful and wanton sexual harassment.”

Sand was referring to past cases of workplace discrimination, harassment and retaliation by state employees that pushed the cost of legal payouts footed by Iowa taxpayers to more than $11.7 million in fiscal 2019 — with two separate sexual harassment and discrimination deals each topping $4 million.

Setting aside the UI Physicians reimbursement, fiscal 2020 settlements topped $9.7 million, which State Treasurer Michael Fitzgerald, also a board member, said it was “a high number” with medical liability cases presenting “a growing problem” for the self-insured state government.

“That’s a real meaningful expense to the state,” he said. “The numbers are just getting bigger so it’s concern.”

Notably, this past fiscal year the state — primarily through its UI Physicians group — agreed to pay a Warren County father $3.5 million to settle a lawsuit in which he accused the UIHC of negligence in the 2016 death of his wife and newborn child.

UI Physicians contributed $2.8 million of the payment to Brian Boyce, 45, with the remaining $700,000 coming from the state’s general fund. The payment included attorney fees and expenses and releases the state and UIHC from liability in the March 2016 deaths of his wife and infant, according to the deal.

Separately, a surgical towel and silver staple left inside a Burlington cancer patient after an operation at the UI Hospitals and Clinics generated a $1.2 million settlement. Joseph Lee Caskey, 46, sued the state and two UI physicians nearly two years after severe pain and discomfort brought him back to UIHC for exploratory surgery — and the discovery of a towel and staple in his abdomen, according to the lawsuit.

The state’s general fund will cover half the $1.2 million payout, with the other $600,000 coming from the UI Physicians group.

Another settlement involved nearly $1 million to the family of an almost-4-month-old baby who died after being seen at UIHC and sent home. The infant had been born with a known congenital heart disease and on the date of her death had come in to UIHC after spending the night and morning vomiting, struggling to breathe and coughing, according to the family’s lawsuit. She was treated and sent home, where she died the same day, according to the lawsuit.

Also, State Appeal Board members agreed to pay $2.5 million to settle a medical negligence lawsuit brought by a Fairfield woman whose back and spinal problems were not properly diagnosed by doctors at the UIHC and the Cherokee Mental Health Institute in 2014, and must now use a wheelchair and be cared for round-the-clock.

The state also agreed to pay $325,000 to the widow of a Des Moines man died in 2016 from a significant bed sore his wife said he developed as an inpatient while in UIHC care for routine cervical spine surgery.

The fiscal 2020 payout by Iowa taxpayers included more than $900,000 that went toward settling negligent supervision complaints about a former state Department of Revenue employee who secretly made video recordings of other male workers while they used their workplace bathroom.

The appeal board also ratified an agreement to pay $3 million to a Nebraska woman who was sickened in 2017 by a faulty gas furnace in a cabin at Black Hawk State Park managed by the Iowa Department of Natural Resources and alleged she suffered traumatic brain injury due to carbon monoxide poisoning.

The board also settled several lawsuits involving allegations of age discrimination, disability discrimination and accusations of sexual harassment, assault, discrimination and retaliation against various state government entities.

And the state paid a Cedar Rapids woman $100,000 to resolve allegations that a trooper used a choke hold to forcibly restrain her juvenile son during a “chaotic” arrest at a west-side residence in May 2018 — a contention the state disputes.

Payments authorized by the State Appeal Board to resolve settlements and judgments caused by employee mistakes, workplace misconduct or other damages involving government operations hit an all-time high in fiscal 2008 when $23.5 million was paid to settle claims tied to the Iowa Lottery’s TouchPlay program.

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In fiscal 2015, the paid nearly $19.6 million to settle claims and judgments brought before the State Appeal Board that include more than $12.3 million to resolve construction issues at the state’s maximum-security prison in Fort Madison.

Settlements and judgments

Total for the fiscal years approved by the State Appeal Board:

2020: $14,995,025

2019: $11,737,735

2018: $6,636,138

2017: $3,730,632

2016: $4,653,971

2015: $19,583,095

2014: $2,875,257

2013: $4,282,556

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