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Virginia has moved closer to allowing physicians and hospitals to purchase medical malpractice insurance from the state’s risk management office.
A measure, SB601, has passed initial rounds in the General Assembly and is expected to reach Gov. Mark Warner’ desk for his signature soon.
The plan expands on an existing state program providing protection for certain free clinics and community hospitals.
The new program would be limited to so-called high risk doctors who have been denied coverage by at least one insurance carrier, received two premium quotes that exceed 125 percent of their last premium or whose insurance carrier stopped writing in Virginia. To be eligible, doctors must also participate in Medicaid and the Virginia Birth Related Neurological Injury Fund.
It would not begin until July 2006.
The plan came about as a result of the failure of stronger tort reform proposals that included caps on awards. Sen. Steve Newman, the Lynchburg Republican sponsoring SB 601, had originally proposed a $250K cap on non-economic damages, abolition of the collateral source rule and periodic payment of awards.
However, Newman and other backers concluded that the trial lawyers’ opposition was strong and there were not enough votes for the original measure. They opted for the revised measure with the state offering coverage as a compromise.
The doctors’ community is glad to get something rather than nothing.
“Senator Newman’s actions, coupled with the unanimous support of the House and Senate Courts Committees, are significantly positive developments regarding the fate of comprehensive medical malpractice reform moving forward. As stated, the original version of SB 601 did not have enough support to pass the full committee,” the Medical Society of Virginia (MSV) told its members.
Pam Overstreet, director of communications for MSV, told Insurance Journal her group is convinced its show of force in Richmond last month when thousands of physicians took to the streets to call for malpractice reform was a major factor in lawmakers’ decision to do something and not just let efforts fail completely.
Virginia State Treasurer Jody Wagner, within whose agency the risk management division responsible for the insurance plan is housed, has expressed some concerns over the program, suggesting in testimony that the state has no way of knowing how many doctors might sign up or if premiums could even be lower than offered in the private market.
But Don LeMond, director of the division of risk management, told Insurance Journal that he is not overly concerned because the legislation provides his division with “with a lot of flexibility and options.”
To address concerns, lawmakers ordered a study between now and December 2004 as part of the measure. This study is supposed to look at the cost of malpractice coverage in the state and the impact of the plan on agents and the market.
“We will be developing the program during this period, so we can be up and running as soon as possible,” LeMond indicated.