New Virginia Legislation Affects Health Care Providers and Insurers

Published on: 7/25/2005

The 2005 session of the Virginia General Assembly was marked by a battle over legislation aimed at controlling or reducing the escalating cost of premiums for medical professional liability insurance, which had driven some physicians out of the healthcare marketplace altogether and caused many who remained, as well as hospitals, to see significantly higher overhead in the provision of patient care. The battle ended, at least temporarily, with an "omnibus" package of medical malpractice legislation that became effective July 1, 2005. The legislation contains provisions in several areas important to those involved in the underwriting and defense of medical malpractice claims. The following is a summary of the key provisions of the omnibus package.

Expert Certification

In an effort to reduce the number of frivolous malpractice lawsuits, the General Assembly enacted §8.01-20.1. Under this new statute, a plaintiff in a malpractice action must certify, at the time that service of process upon the defendant healthcare provider is requested, that he has a written, signed opinion from an expert witness who he reasonably believes would qualify as an expert at trial, that the defendant healthcare provider for whom service of process has been requested has deviated from the applicable standard of care and that this is a cause of the injuries claimed. The certifying expert is not required to be an expert witness ultimately called to testify at trial, nor is the healthcare provider entitled to discover the identity of the certifying expert and the nature of his opinions, unless the expert is identified as an expert for trial during discovery. The certification is not necessary if the plaintiff has alleged a theory of liability for which expert testimony is unnecessary, which is a rare occurrence in these cases. Upon written request of the defendant, the plaintiff must, within ten days of receipt of the request, provide the defendant with a certification form confirming that the plaintiff had obtained the necessary certifying opinion at the time that the service of process was requested or affirms that the plaintiff does not require a certifying expert opinion. If the plaintiff did not obtain the required certified expert opinion at the time service of process was requested, the court shall impose sanctions, which may include dismissal of the case with prejudice. Unfortunately, the new statute does not mandate dismissal, and does not specifically provide for discovery of the merits of the certification in cases in which the defendant suspects that it is a sham. It therefore remains to be seen how effective this requirement will be in deterring frivolous lawsuits.

Definition of Malpractice

In amending §8.01-581.1, the General Assembly has broadened the definition of "malpractice" to include an action based upon breach of contract. This theory of recovery had become a popular tool of the plaintiff's bar to attempt to avoid the statutory cap on malpractice damages, which is seen by doctors as a cornerstone to maintaining stable liability insurance premiums in Virginia. That loophole is now closed.

Testimony of Treating Physicians

For years, the plaintiff's bar in many Virginia jurisdictions has been successful in limiting the scope of testimony of the treating physician of a plaintiff in a medical malpractice action in an effort to prevent the defendant practitioner from obtaining important evidence that usually bears upon causation, but may reflect upon the standard of care as well. Plaintiffs have argued that the physician-patient relationship creates a fiduciary duty in the physician not to testify adversely to the patient/plaintiff's interests. The 2005 amendments to §8.01-399 permit the discovery and use at trial of various evidence obtained by the physician during the course of her treatment. This expansion of the scope of permissible discovery and testimony from treating physicians will provide defendants with a valuable tool in the exposure of questionable claims.

Expressions of Sympathy

Physicians and hospital administrators have been reluctant to express their sympathy to the patient in the face of adverse outcomes for fear that this expression may be used against them in a subsequent medical malpractice lawsuit. In enacting §8.01-581.20:1, the General Assembly has adopted a broad exclusion of any expressions of sympathy from evidence at trial. The statute does not apply to statements of fault, which remain admissible.

Three Strikes and You're Reviewed

For years, physicians have been concerned over the impact to future insurability, licensure and privileges to practice of reports of settlements of medical malpractice claims to the NPDB and the Virginia Board of Medicine. The enactment by the General Assembly of §54.1-2912.3 will not ease these concerns. This code section requires the Board of Medicine to assess the competency of any licensed physician on whose behalf 3 medical malpractice claims are paid in a 10 year period. The physician bears the costs of the assessment, the results of which shall be reviewed by the Board in order for it to determine a plan of corrective action. Although the assessment and documents related to the process are confidential and are not admissible into evidence in any medical malpractice action involving the physician, this legislation may have a further chilling effect on settlements of meritorious medical malpractice cases by physicians who have had a history of settlements in the previous decade. It may also make settlement of a close case more difficult for a physician with an unblemished record who is concerned about taking a first strike in a case that could be won when she might need it for a completely indefensible case in the future.

Reporting by Malpractice Insurers

Prior to 1996, professional liability insurers were required to file closed claim information with the Virginia Bureau of Insurance. With the passage of §38.2-228.2 of the Code of Virginia, this reporting requirement is restored. Professional liability insurers, on an annual basis, will be required to report information electronically regarding closed medical malpractice claims. The first report is due September 1, 2005, and must include closed claim information for 2002, 2003 and 2004. The Bureau of Insurance and actuaries may analyze this information in order to determine if medical malpractice premiums assessed in Virginia are reasonable and not excessive. This may be good news for Virginia physicians who have found coverage difficult to secure in recent years, but will mean more work for insurers who write business in Virginia.