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New York Doctors worried about increases in Malpractice premiums

Posted on May 14, 2007

Doctors on tenterhooks over malpractice costs By: Gale Scott Published: May 13, 2007 - 6:59 am In what has become an annual rite, physicians across the state are waiting anxiously to learn how much their malpractice insurance premiums will rise on July 1. New York's largest medical malpractice insurer, Medical Liability Mutual Insurance Co., says it is asking the state to authorize rate hikes for all doctors averaging 16.6%. The company's financial reserves have dropped dangerously low — to less than $200 million, compared with $1.4 billion six years ago. Doctors' representatives are vigorously opposing the increase, arguing that their premiums have doubled during the past decade and that a big hike could force some doctors to give up their practices or leave the state. They are worried that the insurer's financial distress makes a large increase more likely than ever. Softening the blow The state official charged with making the decision, Superintendent of Insurance Eric Dinallo, is trying to soften the blow of any big price hike by finding ways to keep a lid on awards in malpractice cases. Last week, Mr. Dinallo, who was confirmed as superintendent on May 1, convened a summit meeting at his Manhattan office. In a two-hour session, he heard from representatives of the warring factions: the Medical Society of the State of New York, the New York State Trial Lawyers Association, several major insurance companies and the state's hospital trade groups. Participants are reluctant to talk in detail about the meeting, but characterize it as an important first step. "It was a good discussion," says Gerald Conway, the medical society's lawyer. Mixing it up A spokesman for Mr. Dinallo says that participants were asked to submit briefing papers outlining their views by the end of the month. "We'll put them all in the blender," the spokesman says. "This is not a problem that can be solved easily." Mr. Dinallo set up a similar summit earlier this year, while he was acting superintendent, to resolve a seemingly intractable dispute involving workers' compensation benefits and premiums. By late February, the administration had broken the impasse. Uncertain endgame But the solution to the medical malpractice insurance problem is unclear. In recent years, former Gov. George Pataki's insurance superintendent approved increases, although at lower levels than insurers requested. It's unlikely that Mr. Dinallo would be able to act in the next few weeks to make changes that would reduce the size and number of jury awards, such as imposing monetary caps or higher standards for assessing liability. Participants in last week's meeting note that any major changes would require approval by the state Legislature. "The medical malpractice situation in New York is a serious problem, and we're committed to working to solve it, but we don't see a quick fix," says Kristina Baldwin, counsel to the state Senate's insurance committee. Lawmakers were not invited to last week's meeting, she says, "but we intend to be at future meetings." If the 16.6% increase is approved, annual liability insurance bills for physicians in high-risk specialties like neurosurgery will rise to as much as $315,986. Jury awards rising Driving that rise in costs is the steady increase in the amount of money that juries are awarding in malpractice cases. That figure reached a median of $1.3 million in New York state in 2005, up from $1 million in 2003. The state medical society has long been calling for legislative action, including enactment of a $250,000 cap on malpractice awards for so-called pain and suffering damages. The average payment of such damages in medical malpractice cases in New York was $461,000 in 2005. The medical society is also advocating for a law that would require a higher standard of proof before a jury could find a physician negligent. Jurors now must have "reasonable certainty" of negligence. Mr. Conway wants to change that threshold to "clear and convincing evidence." A spokesman for the trial lawyers group declines to comment on the summit meeting, citing "the sensitive nature of the discussions." But the organization has long portrayed the proposals favored by the doctors' group as anticonsumer, because they would mean smaller judgments. Among the specialties hit hardest by rising judgments is that of obstetrics and gynecology. The increase has led to correspondingly higher rates for malpractice insurance. A survey by the state chapter of the American College of Obstetricians and Gynecologists conducted last year found there had been a decrease in the number of practitioners from 2005 levels and that seven upstate counties had no practicing obstetricians. "A significant number of our doctors consider giving up practicing every July when the rates come out," says a spokeswoman for the group.