West Virginia Medical Malpractice Insurance

Medical malpractice insurance premiums are expensive in West Virginia. Healthcare workers in neighboring states can pay malpractice insurance premiums that are 25-percent-less expensive than those same workers would in West Virginia. This is surprising because the state addressed its liability issues by passing very pro-physician laws for governing the resolution of malpractice claims, and these laws have been updated twice in the last 25 years to keep pace with other states in the region.

In the mid-1980s, during the nation’s second widespread medical liability crisis, lawmakers came to the realization that medical malpractice insurance premiums were strangling West Virginia healthcare workers due to “the historic inability of this state to effectively and fairly regulate the insurance industry.” In response, the General Assembly passed the Medical Professional Liability Act (MPLA) of 1986 with the objective of providing “adequate and reasonable compensation to those persons who suffer from injury or death as a result of medical negligence,” while balancing “the cost of liability insurance coverage… and retaining qualified physicians and other healthcare providers.”

Recognizing that the state’s interest in maintaining an adequate healthcare workforce, the MPLA was designed to protect West Virginia’s healthcare providers and facilities in medical professional liability cases. The legislation accomplished this task by defining the elements of a medical professional liability case, capping non-economic damages at $1 million, limiting joint and several liability, establishing minimum expert requirements and providing procedural safeguards. The MPLA applies to “any liability for damages resulting from the death or injury of a person for any tort or breach of contract based on healthcare services rendered, or which should have been rendered, by a healthcare provider or healthcare facility to a patient.”

In the early part of the last decade, a new medical liability crisis was bubbling in West Virginia, and insurance companies as well as doctors were fleeing the state due to inflated jury verdicts and escalating malpractice insurance premiums. Ohio-based PIE Mutual, which had owned about one-third of the West Virginia medical-malpractice-insurance market, had gone bankrupt in 1998; the St. Paul Companies, which became the state’s largest insurer after PIE Mutual folded, exited the medical liability market at the end of 2001. Facing premiums that were skyrocketing year after year, specialty physicians started leaving for other states, and maternity wards throughout West Virginia began closing their doors.

The West Virginia General Assembly returned to medical liability tort reform in 2001, passing laws that would update and amend the MPLA for the first time in 15 years. By this time, there was hard data on what parts of the original MPLA had been successful and which parts needed to be strengthened. The lawmakers focused the new legislation on the section of the MPLA that was titled “pretrial procedures,” now codifying the sections as “prerequisites for filing an action against a healthcare provider; procedures; sanctions.” In addition to being a much stronger definition of what actions are necessary prior to filing a medical malpractice lawsuit, those requirements now included that a plaintiff’s attorney must obtain a “certificate of merit” from a qualified expert attesting to a claim’s validity before a case could proceed. The certificate of merit must be executed under oath by a healthcare provider who qualifies as an expert under the West Virginia Rules of Evidence, and must state with particularity the following: familiarity with the applicable standard of care at issue; qualifications of the expert; the opinion of how the standard of care was breached and opinions as to causation. Each healthcare provider against whom a claim is asserted must receive the notice and certificate of merit.

Once again revisiting medical malpractice insurance issue in 2003, the General Assembly passed legislation to offer healthcare workers the ability to write-off 21 percent of their adjusted medical malpractice insurance premium on their taxes as well as created the West Virginia Physicians Mutual Insurance Company (WVPMIC).

Established by the 2003 amendments to the MPLA, the WVPMIC is the only non-profit, mutual medical liability insurance company in West Virginia. It was started with a $24 million loan from West Virginia taxpayers and currently insures about 70 percent of the state’s healthcare workforce. By playing an active role in underwriting, risk management and claims, WVPMIC’s physician board members have been able to medical malpractice insurance premiums for its member insureds.

Also in 2003, the Assembly reduced the $1 million cap on non-economic damage on the books since 1986. Previously capped at $1 million, the 2003 amendment reduced the amount recoverable to $250,000; $500,000 if the injury involved death, permanent and substantial physical deformity, loss of use of a limb or bodily organ system or permanent physical or mental injury preventing an individual from independently caring for himself or performing life sustaining activities.

The non-economic caps were upheld in 2011 by the West Virginia Supreme Court in MacDonald v. Ahmed, where the court found that such caps did not violate, “the state constitutional right to a jury trial, separation of powers, equal protection, special legislation or the ‘certain remedy’ provisions” of the state’s constitution. The court noted that West Virginia is now, “squarely with the majority of jurisdictions in holding that caps on non-economic damages in medical malpractice cases are constitutional.” The caps are to be adjusted annually based on consumer price indexing.

The effects of the legislature’s 2001 and 2003 amendments to the MPLA were rapid and striking. From a 2001 high, medical-malpractice claims fell almost 69 percent by 2004, the year following the enactment of the second round of malpractice liability reform, and claim volumes have remained at manageable levels since then. Insurance companies began lowering their medical-malpractice premiums in 2005, and the West Virginia Mutual Insurance Company, now the state’s largest medical-malpractice insurer, has reduced or held steady its malpractice insurance rates in each of the last three years. The state’s supreme court has reviewed two different cases that applied the 2001 and 2003 reform laws and did not declare either law unconstitutional. For now, at least, the legislature’s medical-malpractice reforms look like a striking success.

Having successfully survived constitutional challenge, the ratified non-economic damage cap will ultimately have a deflating effect on medical malpractice insurance premiums in West Virginia. For this reason, it is more important than ever to work with an experienced medical malpractice insurance broker with access to all the major insurers in your state. Only an experienced broker will be able to shop your coverage for the best terms at the most inexpensive price.
This write-up of West Virginia was put together by Michael Matray, the Editor of the Medical Liability Monitor

West Virginia State Medical Association
West Virginia Offices of the Insurance Commissioner
West Virginia Board of Medicine
West Virginia Osteopathic Medical Association
West Virginia Medical Group Management Association
West Virginia Bureau for Medical Services
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