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Reform works!

ON JUNE 22, THE WEST VIRGINIA SUPREME COURT OF APPEALS ISSUED A LONG AWAITED ruling affirming the constitutionality of our State's cap on non-economic damages. This is a major victory for all physicians and the patients they care for each and every day in West Virginia. First enacted in 1986, the original cap ($1 million) was upheld in 1991 and again in 2000. Then in 2003, in response to a medical liability crisis that jeopardized patients' access to care, the West Virginia Legislature reduced the cap to $250,000 in most cases. The lower cap was part of a package of reforms enacted in 2001 and 2003 to restore balance to the civil justice system.

Reforming our medical liability system was one of the most hotly debated public policy issues tackled by the West Virginia Legislature in the last 10 years. Looking back now at several key indicators, it is clear the medical liability reforms passed in 2001 (HB 601) and 2003 (HB 2122) are working! Their effectiveness coupled with the Court's June 22 ruling is a true "success story" that can, and should, be replicated in other areas of our civil justice system and serve as a national model.

Claim Filings

Liability insurance rates are heavily impacted by three factors-claim frequency (number of suits filed); severity (average size of settlements and jury awards) and "shock losses" (judgments exceeding $1 million). Prior to 2001, medical liability insurance companies conducting business in multiple states, including West Virginia, reported that while severity and "shock losses" were on par here, they did see a significantly higher frequency of suits filed per insured in West Virginia than in other states. In an effort to ensure the suits being filed had merit, the 2001 medical liability reform legislation included a requirement that, with few exceptions, any medical liability suit filed must contain a statement (certificate of merit) from an independent medical expert indicating that there is evidence that medical negligence may have occurred. Over the last ten years, the number of suits filed annually has been cut almost in half. The reforms can be credited with helping weed out meritless claims.

Lower Premium Rates

While there was little public sympathy for the poor financial performance reported by the insurance companies in the late 1990s, the public did engage when physicians were driven out of state or out of practice because of skyrocketing insurance premium rates. Double-digit premium rate hikes, year after year, were imposed on physicians to make up for the companies' mounting losses. For example, some OB/GYNs and Neurosurgeons saw their premium rates rise to well over $150,000 per year. The reforms contained many provisions designed to control cost and bring balance to our litigation system. The significance of the reforms' impact can easily be seen now in the premium rates physicians pay for liability coverage. Double-digit increases just a few years ago have turned around and rates have actually dropped for most physicians by more than 30 percent in just the last few years. For example, in 2005 the average mature premium for an OB/GYN insured by West Virginia's largest medical liability insurance carrier, West Virginia Mutual Insurance Co., was $113,678. Four years later in 2009, the annual premium rate had dropped to $67,655, a 40 percent decrease. Lower premium rates not only help curb healthcare costs, they improve access to care.

Improved Access to Care

The more stable liability system and lower premium rates caused by the 2001 and 2003 reforms have brought a renewed sense of optimism and improved attitude about the attractiveness of practicing medicine in West Virginia. Data from the West Virginia Board of Medicine clearly demonstrates a turnaround in the number of physicians seeking licensure to practice medicine in our State. The steady decline in new licensure activity bottomed out in 2000. The increasing number of newly licensed physicians in West Virginia highlights the positive turnaround since our reforms were enacted.

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Brief Chronology of Non-economic Damages Cap

* 1986 -- West Virginia Legislature enacts first cap on non-economic damages at $1 million

* 1991 -- State Supreme Court upholds constitutionality of $1 million non-economic damages cap

* 2000/2001 -- State Supreme Court issues decisions again upholding constitutionality of $1 million non-economic damages cap

* 2001 -- West Virginia Legislature enacts first round of medical liability reform including provision requiring a pre-filing 'certificate of merit' be given in most cases alleging medical negligence

* 2003 -- West Virginia Legislature enacts a more comprehensive second set of medical liability reforms including a lower cap of $250,000 ($500,000 in certain limited circumstances) on non-economic damages

* June 22, 2011 -- State Supreme Court upholds constitutionality of $250,000/$500,000 non-economic damages cap

The WVSMA appreciates the support and participation from the following organizations in the joint Amicus Brief filed by the WVSMA with the West Virginia Supreme Court of Appeals urging the Court to uphold the non-economic damages cap.

* Component Societies of the West Virginia State Medical Association

* West Virginia Academy of Family Physicians

* West Virginia Hospital Association

* American Medical Association

* West Virginia Orthopaedic Society

West Virginia Chapter American Academy of Pediatrics

* West Virginia Academy of Otolaryngology--Head and Neck Surgery, Inc.

* West Virginia Podiatric Medical Association

* West Virginia Medical Group Management Association

* West Virginia Radiological Society

* West Virginia State Neurosurgical Society

* Health Coalition on Liability and Access

* Physicians Insurers Association of America

* American Insurance Association

* Property Casualty Insurers Association of America

* NFIB Small Business Legal Center in Support of Respondents/Defendants

The WVSMA also appreciates the additional Amicus Briefs filed urging the cap be upheld from the following:

* West Virginia Mutual Insurance Company

* West Virginia Chamber of Commerce

* West Virginia Board of Risk & Insurance Management

* Defense Trial Counsel of West Virginia

Evan H. Jenkins

Executive Director, West Virginia State Medical Association (1999-Present) Member, West Virginia State Senate (2002-Present) WV House of Delegates (1994-2000)
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Title Annotation:Director's Message
Author:Jenkins, Evan H.
Publication:West Virginia Medical Journal
Article Type:Report
Geographic Code:1U5WV
Date:Jul 1, 2011
Words:973
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