SD14 - Report of the Joint Subcommittee Studying Risk Management Plans for Physicians and Hospitals


    Executive Summary:
    JOINT SUBCOMMITTEE STUDYING RISK MANAGEMENT PLANS FOR PHYSICIANS AND HOSPITALS
    CHAPTER 822 (SB 601, 2004)
    January 12, 2005

    The joint subcommittee was established to study certain matters pertaining to risk management plans, including: (i) the availability and affordability of medical malpractice liability insurance for physicians and hospitals in the Commonwealth; (ii) the practices of medical malpractice liability insurance carriers related to the establishment of premiums and the determination of increases in such premiums; (iii) the impact that the medical malpractice liability insurance climate is having on patient access to quality healthcare and on the ability of patients to recover damages from the settlement or verdict of a medical malpractice action; (iv) the impact on the private sector of the risk management program set out in SB 601; (v) any insurance-related programs established in other states to ensure the availability and affordability of medical malpractice liability insurance; and (vi) the feasibility and practicability of establishing insurance-related programs within the Commonwealth.

    Senator Stephen D. Newman was elected chairman and Delegate Clifford L. Athey, Jr. was elected vice chairman. Also appointed to the joint subcommittee were Senator Kenneth W. Stolle, Senator Thomas K. Norment, Delegate David B. Albo, Delegate William R. Janis, and Delegate Kenneth R. Melvin. Information about the activities of the joint subcommittee is available at its web site: http://dls.state.va.us/SB601.htm.

    The joint subcommittee met five times. At its first three meetings, the joint subcommittee received a great deal of information from numerous entities, including: for profit and mutual medical malpractice insurance carriers, the Virginia Association of Independent Insurance Agents, the State Corporation Commission, the Virginia Trial Lawyers Association, the Medical Society of Virginia, the Virginia Association of Defense Attorneys, the Virginia Hospital and Healthcare Association, the Medical College of Virginia Physicians Professional Liability Program, the Governor's Workgroup on Rural Obstetrical Care, and the Department of the Treasury, Division of Risk Management. The subcommittee heard conflicting opinions regarding the cause of the recent increase in medical malpractice premiums and noted a lack of consensus on solutions to the current situation. The subcommittee determined that there has been a steady increase in medical malpractice premiums in the last few years, that affordability of malpractice insurance is a greater problem than availability, that certain specialties are particularly affected, and that access to obstetrical care and some other types of medical care is decreasing, particularly in rural areas. The demise of the Doctors Reciprocal Company and the withdrawal of St. Paul Insurance from Virginia have had a significant impact on the medical malpractice climate in Virginia.

    At its fourth meeting the subcommittee considered a compilation of recommendations that had been made to it and determined which recommendations to endorse, which to defer for consideration at a later date, and which were not feasible to pursue. Recommendations that were endorsed were drafted, with the involvement of a number of interested parties, as legislation, which was reviewed at the fifth meeting of the joint subcommittee, held on January 11, 2005. The joint subcommittee decided to combine a number of reforms into one bill, to be known as the Medical Malpractice Reform Act of 2005. The bill will be introduced in the 2005 General Assembly Session and does the following things:

    • requires an expert witness to certify, before service of process is made, that the health care practitioner deviated from the standard of care.

    • provides that an expression of sympathy or general sense of benevolence to a patient or a patient's relative is not admissible at trial as an admission of liability or as an admission against interest.

    • provides that the impressions, observations, evaluations, and histories obtained or formulated during the course of the practitioner's treatment may be disclosed.

    • revises the definition of malpractice to limit it to an action for tort or breach of contract for personal injuries or wrongful death.

    • requires medical malpractice liability insurers to submit annual reports to the State Corporation Commission stating information regarding claims made against health care practitioners.

    • directs the Board of Medicine to require an assessment of the competency of a health care practitioner who has had three medical malpractice claim payments in 10 years.

    In addition, the subcommittee endorsed:

    • a resolution continuing the joint subcommittee for a second year.

    • a resolution requesting the State Corporation Commission to study the implications of requiring that medical malpractice insurance rates for specific medical specialties be subject to prior approval by the Commission, and that loss experience from no state other than Virginia be considered in setting such rates.

    The joint subcommittee looks forward to continuing its work for a second year. As stated in the resolution, the subcommittee intends to focus on the effectiveness of medical malpractice panels, the possibility of a pilot project for medical courts, the risk management program established by SB 601 (2004), State Corporation Commission information on medical malpractice insurance rates, hospital requirements for practitioner medical malpractice insurance and peer review processes.

    In anticipation that the term of the joint subcommittee will be extended for a second year, the joint subcommittee does not plan to submit a formal report to the 2005 Session.