Medical Malpractice:

Effects of Varying Laws in the District of Columbia, Maryland, and Virginia

HEHS-00-5: Published: Oct 15, 1999. Publicly Released: Nov 16, 1999.

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William J. Scanlon
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Pursuant to a congressional request, GAO provided information on the effects of laws in Virginia, Maryland, and the District of Columbia, focusing on: (1) the rationale behind selected reforms states have made to their medical malpractice tort law; (2) whether selected tort reforms have reduced malpractice insurance costs and the costs associated with defensive medicine; (3) the extent to which the District, Maryland, and Virginia have adopted selected tort reforms; and (4) comparing malpractice claim payments, insurance premiums, and numbers of physicians in the District; Baltimore, Maryland; and Richmond, Virginia.

GAO noted that: (1) during the last 25 years, many states have adopted various changes to their tort law, collectively referred to as tort reforms; (2) generally, states that adopted reforms were attempting to reduce malpractice insurance premiums; (3) each type of reform is viewed as having a number of possible benefits and negative consequences, as follows: (a) capping damages lowers the highest awards but could restrict payments to most seriously injured people; (b) amending the collateral source rule may prevent double recovery but could shift payment of health care costs due to a malpractice injury from the malpractice insurer to the health insurer; (c) modifying statutes of limitations may reduce the number of malpractice claims but may prevent recovery by victims of malpractice who do not discover the injury until some time after it occurs; and (d) implementing alternative dispute resolution systems may remove claims from the courts but could increase the costs associated with malpractice by encouraging more claims; (4) limited evidence shows that tort reforms may have had some effect in reducing medical malpractice insurance premiums; (5) to date, the District has not adopted any major changes to its tort law, while both Maryland and Virginia have adopted selected tort reforms with differing approaches; (6) for filing claims, Virginia provides 2 years from the date of the injury with some stated extensions, while Maryland provides 5 years from the date of injury or 3 years from discovery, whichever is earlier; (7) while the District does not have a specific arbitration program for malpractice cases, as do Maryland and Virginia, the courts can order nonbinding arbitration or the parties can agree to binding arbitration; (8) how these differences among the tort approaches of the District, Maryland, and Virginia have affected malpractice costs is unclear; (9) median malpractice claim payments for District, Baltimore, and Richmond physicians from 1996 through 1998 were $200,000, $150,000, and $112,500; (10) malpractice insurance premiums for one traditionally high-cost specialty, obstetrics/gynecology, were higher in Baltimore than in the District in 1998 but lower for internal medicine and general surgery; (11) premiums for these specialties were lowest in Richmond; (12) high malpractice claim payments or insurance premiums have not reduced the number of physicians in the District relative to Baltimore or Richmond; and (13) the number of physicians in the District per 100,000 people increased by about 24 percent between 1985 and 1997.

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