HELENA — Montana physicians, hospitals and trade groups urged the House Business and Labor Committee on Jan. 31 to modernize the state’s cap on non‑economic damages in medical malpractice suits, proposing a phased increase from the present $250,000 to $500,000 and an annual inflation adjustment.

Rep. Laurie Mercer (sponsor) framed HB 195 as an update to 1995 legislation that set a $250,000 limit on non‑economic damages. Mercer and medical‑industry witnesses said the nominal cap has not kept pace with inflation and that the lack of indexing has prompted frequent legal challenges and a chilling effect on provider recruitment and insurance affordability.

Justin Cole of the Montana Medical Association, hospital executives and rural‑hospital leaders said the change is aimed at protecting access to care — particularly in rural communities — by preserving affordable, predictable malpractice coverage. ‘‘This bill modernizes and protects the continued viability of that policy,’’ Cole said, pointing to national studies linking damages limits to physician supply and insurance costs.

Testimony included frontline examples. Dale Schowengerdt, a former solicitor general, argued raising and indexing the cap strengthens the legislature’s policy role and reduces repeated court attacks. Michael Patton, a hospital CEO who testified remotely about a New Mexico lawsuit, described severe financial stress following a high‑value verdict and said the threat of large awards can force hospitals to scale back services.

Opponents included trial lawyers and a plaintiffs’ counsel who argued caps disproportionately reduce compensation for groups with limited lost‑earnings claims — children, stay‑at‑home parents and elderly patients — and that Montana would still have one of the lowest caps in the nation even after the increase. Al Smith, representing plaintiff attorneys, urged setting the cap at a higher level or indexing immediately to avoid future constitutional challenges and to preserve victims’ recoveries.

Committee members asked about the effect on premiums, the mechanics of a phased increase, and whether the change would reduce the number of constitutional challenges. Supporters said the phase‑in allows hospitals and insurers to plan for premium increases and would reduce the incentive for repeated litigation over a static 30‑year cap.

No committee vote was taken on HB 195. Sponsors said the phase‑in and indexing language is intended to head off future legal attacks and to give providers time to adjust to higher premiums.

Why it matters: Witnesses framed the proposal as balancing injured‑patient compensation with preserving statewide access to health care. Opponents said caps reduce recoveries for severely injured patients who have little or no economic‑damages award to anchor a jury verdict.

Next steps: The bill will return to committee for further consideration; staff will likely be asked to model premium impacts and provide comparative data from other states.