Award-Winning Physician Faces Insurance Problems

From the Charleston Daily Mail, August 3, 2004, Tuesday

Dr. James Blume was the first West Virginian and the first osteopathic physician in the United States to win the National Country Doctor of the Year award, in 2002.

Gov. Bob Wise has named the rural Summers County physician a Distinguished West Virginian.

And, board certified in family medicine, Blume last year received the Off-Campus Teaching Award from the West Virginia School of Osteopathic Medicine.

Despite his accolades, Blume can’t get medical malpractice insurance from the new West Virginia Physicians’ Mutual Company formed by legislators to help state doctors find coverage.

“We regret to inform you we are unable to provide you a quotation for coverage,” said an administrator at Acordia of West Virginia in a June 30 letter to Blume.

Like dozens of other state doctors, Blume is stuck. His former insurer, NCRIC Inc., has announced it is pulling out of West Virginia.

“Your policy has been canceled effective 08/01/2004,” said a July letter from underwriter Ross Hess to Blume.

In an earlier letter, a NCRIC Group vice president told Blume that costs of defending West Virginia policyholders have continued to rise significantly.

“In addition, despite efforts associated with tort reform, claims severity has increased dramatically as well,” the NCRIC official said.

Last week, Charleston Area Medical Center CEO David Ramsey announced that four surgeons there also are losing their NCRIC insurance. It is not yet known whether the Physicians’ Mutual will accept them.

Blume, meanwhile, has been looking at other possibilities. He could purchase coverage that would cost $ 35,000 the first year and would plateau at about $ 120,000 a year after four years, he said. In addition, he’d have to pay NCRIC $ 28,000 for tail coverage, for those possible lawsuits that could arise later.

In comparison, he paid NCRIC $ 13,859 last year for coverage, he said Monday. It was to plateau at $ 26,000 a year, at most.

Blume said the new physicians-owned company isn’t doing what legislators said it would.

“Physicians in particular and citizens of the state in general have been sorely misled, as demonstrated by the recent turn of events in my career,” he wrote in an open letter dated Monday.

The mutual’s CEO, David Rader, said the company’s underwriting criteria have been approved by the state Insurance Commission. Because of a capacity problem, it’s not possible to accept all physicians who apply for coverage, he said.

For instance, about 1,400 physicians transferred from the state Board of Risk and Insurance Management to the mutual July 1. Another 100 physicians have applied and about half of those have been accepted.

“There have been a few declinations, 15 percent to 20 percent,” Rader said.

The company has an arrangement with a nonstandard insurance carrier to consider insuring those turned down by the mutual. However, costs would be comparatively high.

“Our prices are almost non-affordable,” Rader said.

Blume has been sued three times by patients without health insurance but has lost none of the lawsuits, he said.

Still, because his insurance company defended him, this “loss history” is available to future insurance companies.

“We lose no matter what,” Blume said. “It is just too easy to sue in this state.”

In June, Blume was able to recruit a partner to help him in his huge rural practice, Dr. Michael Montgomery, whose coverage with NCRIC is due to expire in late fall. They have invested in opening a second office in Hinton.

Blume, who also is director of the emergency department at Summers County Hospital in Hinton, said he has three options:

n To continue to practice without insurance. If so, he will lose his hospital admitting privileges.

n To quit his private practice and do full-time emergency medicine. But he said the community would suffer greatly.

n To sell his practice to a hospital or not-for-profit entity that could provide the insurance.

In his July 1 address in kicking off the mutual, Wise said the state must “guarantee . . . that every West Virginia doctor has access to reasonably priced medical malpractice insurance.”

Blume described the statement as a lofty goal.

“The Physicians’ Mutual is not keeping its promises,” he said.