Comparing DC to VA & MD

While Maryland and Virginia are suffering from the effects of the health care liability crisis, the problem in DC is more severe and is exacerbated by the fact that both Maryland and Virginia do have some limits on damages awards and other legislative restrictions on medical liability cases. Because of the proximity of the Maryland and Virginia suburbs, DC physicians can easily move their practices to or provide certain higher risk services in the nearby Maryland and Virginia suburbs to reduce their liability exposure in the District. Therefore, DC physicians are more likely than physicians in other areas of the country to respond to the lack of liability reforms in the District by reducing the services they provide to DC patients.

Although many other states, including Maryland and Virginia, have adopted legislative reforms to limit the damages available in civil liability cases, the District of Columbia remains one of the jurisdictions that has not addressed this problem despite the fact that it ranks number one or two in several categories used to rate states with respect to medical liability issues, including medical liability insurance premiums. In fact, Virginia recently enacted additional reforms, which could cause further disparities in liability risks and premiums between the District of Columbia and Virginia.

The District of Columbia’s proximity to Maryland and Virginia, which already have caps on damages (albeit less effective than desired), appears to be exacerbating the adverse effects of runaway medical liability awards and premiums on access to medical services in DC. Maryland has a $650,000 cap on non-economic damages in all personal injury actions except wrongful death, subject to a $15,000 per year escalator. Virginia, by contrast, currently has a $1.7 million cap on total damages subject to annual increases of $50,000 through 2006 and $75,000 for 2007 and 2008, which includes a $350,000 cap on punitive damages. This disparity has contributed to substantially higher medical liability premiums in DC than in Maryland and Virginia for virtually all specialties. Although Maryland failed to enact additional reforms in the General Assembly’s 2004 Legislative Session, Virginia did enact SB 601, which, among other things, creates a publicly funded medical liability insurance program to make liability coverage more accessible to Virginia physicians. A proposal to limit non-economic damages to $250,000 was not enacted. To the extent that this bill will make medical liability insurance more affordable in Virginia, it could further exacerbate the disparities between premiums for DC and Virginia doctors.

According to NCRIC, Inc., a physician-directed medical professional liability insurer in the District of Columbia, with one exception its 2004 rates in DC are higher across the board than in Maryland and Virginia [Mature rates for $1 million/$3 million coverage].

The District of Columbia Hit Hard by Crisis
The District of Columbia has been hit hard by the medical liability crisis. For instance, according to the Medical Liability Report Card—2000 prepared by NORCAL Mutual Insurance Company:

• DC has the highest average patient payment for health care liability in the country at $584,338 compared to California with $142,637 and a U.S. average of $264,552. Maryland ranks 16th at $282,403 and Virginia ranks 33rd at $227,289.
  
• DC ranks second in the country in patient payment frequency at 10.8 payments per 100,000 population, compared to a U.S. average of 5.2. Maryland ranks 22nd with 4.7 and Virginia ranks 41st with 2.8.
  
• DC ranks first in total per capita payments to patients at $63.33. Maryland ranks 18th with $13.28 and Virginia ranks 41st with $6.39.
  
• DC and Virginia are listed by NORCAL as being states in crisis for neurosurgery based on a 50% increase in medical liability premiums or premiums of more than $100,000. Maryland is listed as potentially in crisis in this area based on premium increases of 25-50%.
  
• DC ranks first in defensive medicine costs to consumers at $638.45 per capita compared to a U.S. average of $240.96. Maryland ranks 10th at $283.55 and Virginia ranks 31st at $172.73.
  
• NORCAL gives both DC and Maryland a grade of "D" based on its relative performance with respect to the above criteria, while Virginia received a "B".

Hard data and anecdotal evidence suggest that the problem is most severe in the District of Columbia. Many interest groups and experts firmly believe that the differences in medical liability awards and premiums within the metropolitan region (comparing DC, Virginia and Maryland rates) are due to the lack of reform legislation in DC. It is also widely believed that these regional disparities are causing physicians either to stop providing certain high risk services in the District of Columbia entirely or set up offices or affiliate with facilities in the nearby Maryland and Virginia suburbs to provide such services there.