Medical Malpractice Claims and Payouts Remain Flat in Virginia

For each of the past two years, the Medical Society of Virginia and others have argued that huge increases in the numbers of medical malpractice claims filed and in dollars paid out on those claims have caused physician and hospital medical malpractice premiums to increase dramatically in Virginia. The cure, as they saw it, has been to demand that the General Assembly adopt a non-economic damages cap in addition to the existing overall cap on damages in medical malpractice cases. It is clear that having received the facts, there is still no evidence to support the contention that the number of claims filed or the damages paid are the, reasons why medical malpractice rates have risen sharply. The primary cause of those premium increases lies with insurance company practices and ongoing economic cycles. Questionable insurance company reserving practices, reductions in insurance company investment earnings at a time of historically low interest rates, and inconsistent underwriting practices created a “hard” market where premiums rose and fewer carriers were writing new medical malpractice insurance coverage in Virginia and across the country. There is no evidence produced to support the Medical Society’s position that the number of claims and dollars paid out on those claims was increasing at a level commensurate with the rate of premium increase. Even with the increases that were occurring, Virginia’s premium levels remained well below the national average and that Virginia continued to have a competitive medical malpractice insurance market. In 2003, I asked the Virginia Bureau of Insurance to join me and other civil justice attorneys in supporting the re-institution of mandatory medical malpractice closed claims reporting in Virginia. Although they declined to join us initially, the Bureau changed their position a year later and supported that reporting. A preliminary report on the information collected, information covering the period 2002 through 2004, which was presented by Eric Lowe, the Bureau’s principal insurance analyst, at an October 31 meeting of The Joint Subcommittee Studying Risk Management Plans, indicates the following: * The number of claims closed with indemnity payments in 2002 was 342, in 2003 was 334 and in 2004 was 327. (Declining over three years.) * The total payments made for those claims was $74,186,487 in 2002, $75,770,999 in 2003 and $71,051,777 in 2004. * The total number of closed claims were 1,276 in 2002, 1,411 in 2003, and 1,347 in 2004. There may well be claims filed during those years that remain open, so this information is not final. It is clear, however, that having received the facts, there is still no evidence to support the contention that the number of claims filed or the damages paid are the reasons why medical malpractice rates have risen sharply.