Amid debate, Assembly opens door to future med-mal cap increase

What began as a one-page bill to amend one line of code related to Virginia’s medical malpractice cap nearly turned into an overhaul of the cap itself.

Senate Bill 536, patroned by Sen. Mark Obenshain, R-Rockingham County, was initially filed as a bill to exempt interest accrued prior to a medical malpractice verdict from the statutory cap on medical malpractice damages.

“I considered it to be a fairly technical bill that addressed the issue of whether prejudgment interest is covered by the cap,” Obenshain told Virginia Lawyers Weekly. “In catastrophic cases, the victim of a medical mistake or the family may wind up having to pay a substantial price as a consequence of a delay when they recover a capped verdict and are unable to recover any of the time value of that money.”

Once SB 536 crossed over from the Senate to the House of Delegates, the bill was amended to strike the annual $50,000 increase in the medical malpractice cap, instead proposing raising the cap from $2.7 million to $6 million beginning July 1 and adjusting the cap every two years pursuant to cost-of-living adjustments.

The amendment by the House Courts of Justice Committee was offered on March 4 — 10 days before the end of the legislative session.

Scott Johnson, a partner at Hancock Daniel in Richmond and counsel and lobbyist for the Medical Society of Virginia, said the bill was one the medical society “didn’t like from the start.

“We were opposed to the bill from day one, and when it advanced from the Senate and made its way to the House, it basically was grabbed as a vehicle to do something more and different than just excluding prejudgment interest,” Johnson said. “That’s when the dynamics changed.”

The Senate ultimately rejected the House’s substitute, leading a conference committee to emerge with an entirely rewritten bill.

The final version of SB 536 adds a section to the medical malpractice code requiring insurers, health care systems and hospitals to disclose details about premiums, doctors covered under policies, claim payments, litigation costs and malpractice liability expenditures to the General Assembly by Sept. 1 for the 2025 calendar year.

While the medical malpractice cap remains the same for now, the passage of SB 536 indicates possible changes are on the horizon.

Elliott Buckner, an attorney with Cantor Grana Buckner Bucci who lobbied on behalf of the Virginia Trial Lawyers
Association, said SB 536 as passed aims to give stakeholders more information on the future of the medical malpractice cap.

“It will provide needed information to the members of the General Assembly and to the stakeholders working on this issue to give them better information to make good decisions about what to do with Virginia’s medical malpractice cap,” Buckner said.

The VTLA supported SB 536, with Buckner adding that he hopes Gov. Abigail Spanberger signs the bill. As of press time, Spanberger has yet to take action on SB 536.

Evolving cap

Under Virginia statute, the cap on medical malpractice recovery is currently $2.7 million, with $50,000 increases slated on July 1 annually through 2032.

That arrangement is due in part to a longstanding agreement between the Medical Society of Virginia and the VTLA, which agreed to $50,000 annual increases in the medical malpractice cap beginning in 2012, to ultimately raise the cap from $2 million to $3 million by 2032.

Nearly 15 years later, the push for change has been growing. Buckner pointed to the fact that many of the legislators working on bills related to the medical malpractice cap were not in the General Assembly when the agreement was first reached.

“What we heard very specifically from some legislators, some new ones and some that have been there for a while, was that that wasn’t their deal, and that it is their goal and intention to do something about the medical malpractice cap,” Buckner said.

Buckner said that the message from legislators has been that either the stakeholders can try to breach a reasonable compromise, or that the legislators are going to take it upon themselves to pass a new bill.

“I think there is a significant demand amongst the legislators for something to happen to the cap,” Buckner said.

Johnson agreed that sea changes in the General Assembly have led to the legislature being more open to change.

“I think you see, with the turnover in General Assembly members, many who do not feel bound by the agreement reached in 2012 between the [VTLA] and the medical society for the 20-year increase in the cap,” Johnson said. “I think there is very much a heightened direction that something needs to change, and we’re not tone-deaf, we hear it.”

Obenshain disagreed that the turnover in the General Assembly was a driving factor in the push for medical malpractice cap changes.

“Agreements between third parties are really nice and everything, but they certainly don’t bind members of the General
Assembly,” Obenshain said. “Nobody, to the best of my knowledge, is around who was around in 1976 when the cap was adopted.”

However, Obenshain agreed that “the pressure is there” to work out the cap issues.

That desire to change the medical malpractice cap led to the last-second amendment that nearly doubled the medical malpractice cap. Johnson argued that in the Medical Society of Virginia’s position, that great of an increase would have harmed access to care.

Johnson referenced an internal survey with responses that “far exceeded” any the society had conducted before following the March 4 amendment. “In round numbers, half of the physician and physician assistant members said that if this went through, they’d have to reduce the services they are providing to their current patients, if not close completely,” Johnson said.

While not specifically referencing the
$6 million proposed cap hike, Buckner argued that the cap has not increased at the same rate as medical costs.

“That deal went for, in my opinion, too long a period of time, and it did not keep pace at all with the actual increase in the cost of medical goods and services over that same period of time,” Buckner said. “Harm caused now is a lot more expensive to deal with than harm caused then.”

Obenshain noted that the original cap of $750,000 in 1976 would be “in the neighborhood of $8 million today” if adjusted for inflation. “As a consequence, we’ve wound up really penalizing those very small number of rare catastrophic cases that are cap cases.”

Looking ahead

With the medical malpractice cap likely to be under the legislative microscope again in 2027, Charlottesville attorney Les Bowers, a partner at MichieHamlett, said that attorneys don’t necessarily have to do anything now to prepare.

“The way that this bill was drafted, before the modifications, and the likely way that any future bill is going to be drafted is that this is going to phase in slowly,” Bowers
said. “It’s not as though practitioners are going to be able to sit on cases and hope that they’ll be applied to a higher cap in the future.”

Bowers said that “the hallmarks of good case selection and proper case workup are going to be the same” regardless of any amendment to the cap.

As for the work in the legislature, Buckner noted that there is “bipartisan involvement” on the issue of the medical malpractice cap, and he expects the issue to come up again in 2027.

“The stakeholders have very clearly been directed by the members of the General
Assembly to get together in the offseason and do something about this,” Buckner said. “I fully expect that either the parties will come together and reach some agreement on this issue, or the General Assembly
will take it into their own hands and make a change that the parties may or may not like at the end of the day.”

Johnson said that work is already underway to prepare for the 2027 session, adding that the Medical Society of Virginia “remains fully engaged, because this issue is not going to go away.

“We are hammered down,” he said. “We have not let up at all, trying to make sure we get as much information as we can.”

The medical society has opened dialogue with stakeholders, including insurance providers who practice in other states, Johnson said, adding that the medical malpractice cap is “the No. 1 priority for the medical society.”

“We’re devoting more resources to it, to make sure that we hear everybody’s voice and to make sure we make collective decisions and get this right,” Johnson said.

Buckner agreed that this issue will continue to persist even after SB 536’s passage.

“I think there are a number of [legislators] who recognize that the cap as it currently exists is inequitable to the individuals to deal with the aftermath of a malpractice [claim], and they intend to do something about it,” Buckner said.

While stating he supports maintaining a medical malpractice cap “to provide stability to attract providers,” Obenshain acknowledged that the discussion will continue into 2027.

“I think it’s a little like free agency in professional sports — the closer you get to the cliff, the worse the deal is for somebody,” Obenshain said. “I think it’s in everyone’s best interest to try to figure out what we are going to do over the next horizon, over the next 10, 20 or 30 years. That kind of certainty is going to benefit everyone.”