CHARLESTON – Reforms that West Virginia legislators enacted in a medical malpractice crisis have worked like a charm.
Doctors who could not keep up with malpractice premiums five years ago now see their rates dropping.
Where five years ago insurers slashed their West Virginia business or cleared out, today dozens of insurers compete for premiums of doctors and hospitals.
The turnaround started at the Capitol.
In 2001 the Legislature passed House Bill 601, the Medical Professional Liability Act, to deter frivolous claims and promote mediation.
The act required a patient with a malpractice claim to serve notice on a defendant 30 days before suing.
With each notice a patient would send a theory of liability, a list of other defendants, and a "certificate of merit" under the oath of an expert physician.
A patient could leave out the certificate of merit if the theory of liability did not require expert testimony.
Upon receiving the notice package a doctor or a hospital could submit defenses and identify counsel, or demand immediate mediation, or wait for a lawsuit.
Legislators aimed to tip a balance in court, though one Justice of the Supreme Court of Appeals thinks they went too far.
According to Chief Justice Robin Davis the act violated the state Constitution, but she can't get the other Justices to agree. (See accompanying article.)
In any event, the act accomplished its purpose.
According to the West Virginia Board of Medicine, the cost of malpractice settlements dropped from about $172 million in four years before the act to about $139 million in four years after the act.
Court judgments dropped too, though not as sharply. In four years before the act courts awarded about $23 million. In the next four years they awarded about $22 million.
Court judgments seldom happen. According to the Board of Medicine plaintiffs received 110 judgments from 1993 to 2005 – about one every six weeks.
In the same span plaintiffs settled 2,365 claims – one every other day.
Settlements in 2005 averaged $241,006.
The Board of Medicine provided these figures to Insurance Commissioner Jane Cline, to help her track the malpractice market.
Cline in November sent the Legislature a report hailing "tremendous improvement" in medical malpractice insurance results for 2004 and 2005.
She wrote that medical malpractice produced an operating profit for 2003, 2004 and 2005 in West Virginia.
She noted an increase in the number of dismissed claims and wrote, "This suggests that the certificate of merit required by H. B. 601 is having a positive impact…"
On top of requiring notices and certificates, the Legislature also created West Virginia Mutual Insurance to cover physicians and surgeons.
West Virginia Mutual took over policies from the former Board of Risk and Insurance Management.
West Virginia Mutual now dominates the physician and surgeon market. In 2005 it wrote about $55 million in premiums.
According to Cline West Virginia Mutual had a very good first year in 2004 and an even better second year in 2005.
West Virginia Mutual reduced rates five percent in January and requested approval to cut them 15 percent in January.
Health Care Indemnity, an insurer of hospitals, cut its rates 12 percent in January. HCI wrote about $6 million in premiums in 2005.
Woodbrook Casualty, formerly Medical Assurance of West Virginia, cut its rates four percent in 2005.
Medical Assurance once wrote more business for physicians and surgeons than any other company.
Medical Assurance began to back away from malpractice in 1999, but too late. In five years its rates rose 130 percent.
In 2005, as Woodbrook, it wrote about $8 million in premiums.
Statewide, physicians and surgeons paid about $78 million for malpractice insurance in 2005. Hospitals paid about $26 million.