Contact your legislators now to oppose SB 536.
Impact on Healthcare Professionals and Insurance
- More than doubles medical malpractice cap: The medical liability damage cap would immediately increase from $2.7 million to $6 million and would increase hundreds of thousands of dollars every two years in perpetuity.
- Existential financial threat: Enactment would have a truly significant impact on healthcare practitioners' ability to obtain and afford insurance. Combined with already-falling reimbursement rates, these additional costs will directly threaten physicians' ability to sustain their practices and care for patients.
- Already extreme Virginia policy limits: Virginia insurance policy limits ($2.75M) are already significantly higher than a typical medical liability policy ($1M per claim / $3M annual aggregate). Fewer than 3 percent of medical professional liability policies exceed $2M—demonstrating the current Virginia situation is already highly unusual.
- The market cannot support $6M+ policies: It is unclear that the industry would have the risk appetite to write such policies, and if carriers did, the premiums would be prohibitively expensive. Reinsurance for individual physicians is nonexistent (reinsurance is for insurance companies), and excess policies are effectively unavailable to individual physicians.
- Group practice workarounds are unrealistic: The suggestion that individual physicians carry lower limits while practices cover higher limits is not feasible—each doctor would need an unencumbered full-cap limit. Additionally, the asset protections in the bill apply only to "individual physicians," and a practice is not a person.
Illusory Asset Protections and Escalating Costs
- Asset protections are illusory: The bill promises personal asset protection for physicians who carry a policy covering the full cap amount, but these provisions are poorly drafted and would offer no real protection in practice.
- Runaway inflationary cap increases: The cap includes a medical CPI increase every two years (compounded annually). The medical inflation rate has ranged from 2 to 7.8 percent over the last five years. Even at a conservative 2 percent, this would add $120K in the first year alone—and physicians would need to obtain insurance at each new level to maintain asset protections.
- Prejudgment interest pierces the cap: Allowing prejudgment interest awards to pierce the cap will increase practitioners' liabilities beyond their policy coverage—a critical concern given that the personal asset protections are, as noted, illusory.
- Costs rise even without higher limit policies: The higher cap will create upward pressure on all future settlement discussions. As settlement values rise, insurers will require rate increases that will continue to grow with inflationary adjustments.
Expanded Liability and Statute of Limitations
- Doubled statute of limitations: The bill effectively doubles the statute of limitations from the standard 2 years to 4 years, and up to 10 years in many circumstances—this will significantly increase the number of lawsuits filed and the costs to defend them.
Legislative Process Concerns
- Stakeholders excluded: Medical liability insurers were not part of the discussions and were not consulted about the impacts of this proposal on their insureds.
- Legislation of monumental importance such as this cannot be rushed: All stakeholders must be engaged to reduce the impact on healthcare providers and patients' access to care.
Learn more about this medical liability crisis brewing in Virginia.