1 Protect The Cap for Virginia’s Physicians

2 Overview History of the Cap Key Facts Recent Claims History Need to Preserve the Cap

3 History of the Cap 1976 First cap was passed as part of overall tort reform. Original cap amount was $750,000.

4 History of the Cap Rationale for Cap Stability Prevent reduction in health care services that could result from high costs. Availability Prevent insurance companies from discontinuing medical malpractice insurance coverage. Prevent reduction in physician workforce that could result from pre-1976 conditions. Affordability Physicians – Affordable malpractice insurance premiums. Patients – Affordable health care insurance premiums.

5 History of the Cap 1983 Cap was increased to $1.0 million. No annual increases were provided for.

6 History of the Cap 1999 Cap was increased to $1.5 million with scheduled annual increases. Definition of “health care provider” was expanded to include virtually all entities that employ or engage a licensed health care provider and which primarily renders health care services. (Ex: hospitals, nursing homes, MDs, DOs, nurses, ambulatory surgery centers, physical therapists, optometrists, podiatrists, etc.)

7 History of the Cap $50,000 increase per year $75,000 increase per year Annual Increases

8 History of the Cap 2001 Statute was amended to clarify the cap amount that applies is determined by the date the alleged malpractice occurs: Prior Acts--In any acts of malpractice that occurred prior to August 1, 1999, the cap that was in effect when the act or acts of malpractice occurred applies.

9 History of the Cap Virginia Supreme Court has twice ruled that the medical malpractice cap is constitutional. 1.Etheridge v. Medical Center Hospital 237VA87 (1989) 2.Pulliam v. Costal Emergency Services of Richmond Inc. 257VA1 (1999)

10 History of the Cap Virginia Supreme Court reaffirmed its position when it declined to take up the assignment of error in a case that alleged the cap was unconstitutional. 1.Julie Granata v. Jan Paul Fruiterman, M.D (2007)

11 The Cap & BIF MSV believes there is a strong relationship between the constitutionality of the cap and the existence of the BIF. It is probable that if the BIF were to go away, a constitutional challenge to the cap would be more difficult to defend because an “element of reasonableness” would be gone (there would be no mechanism for large awards for catastrophic cases, which are most often related to injuries at birth).

12 Key Facts YEARLESS THAN 500K BETWEEN 500K AND 1.1 MILLION BETWEEN 1.1 MILLION AND 1.5 MILLION GREATER THAN 1.5 MILLION Self-Reported Paid Claim Amounts by Year (Information provided by the Virginia Board of Medicine – Current as of May 2008)

13 Key Facts Annual cap increases ended July 1, Cap will remain in place at $2 million unless legislation affects it.

14 Key Facts Cap applies per patient, per injury, regardless of the number of claims or claimants related to that injury. Cap applies to all defendants who are “health care providers.” Cap includes medical bills, lost wages, pain and suffering, interest, and punitive damages. Cap does not apply if there is gross negligence.

15 Key Facts The Virginia Supreme Court has decided that, in a medical malpractice case involving a baby, the cap is applied separately to the mother and the baby, so the mother gets one cap and the baby gets a second cap.

16 Key Facts Majority of physicians carry medical malpractice coverage of $2 million per occurrence with a $6 million annual aggregate. Hospital bylaws require physicians to carry coverage equal to the current cap.

17 Protect the Cap Continues to serve General Assembly’s objective: to protect the public’s health, safety, and welfare by insuring the availability of health care providers and the adequacy of health services in the Commonwealth. Continues to ensure that health care providers can obtain medical malpractice insurance at affordable rates.

18 Protect the Cap Further increases in the cap are not warranted based upon recent claims history. Further increases in the cap or cost of living adjustments will erode or eliminate the benefits of the cap.

19 Conclusion Virginia’s physicians strongly encourage the General Assembly to continue to support the cap at its $2 million level without further increases.

20 How You Can Help Organize visits with your legislators in their home districts before the General Assembly session convenes. MSV can help coordinate these efforts. Write, call or your legislators to share your stories of how keeping the cap at $2 million will help ensure a stable malpractice market for health care providers. Talk to local chambers of commerce and community groups about the potential consequences of increasing the cap. Join the MSV to support our advocacy efforts.

21 For More Information Contact Keith Hare or Amy Hewett at