Medical Liability Compromise a Mixed Bag

From the Charleston Daily Mail March 6, 2003, Thursday
Copyright 2003 Charleston Newspapers

The president of the West Virginia State Medical Association said today he believes most physicians in the state are happy about the legislative compromise on a medical liability package.

But they are less enthusiastic about the governance structure of what will be a physicians’ mutual insurance company that will start in July 2004.

“We’re pleased with the tort reform part,” said Dr. Douglas McKinney, a Bridgeport urologist. “We would have liked periodic payments, but you don’t get everything.”

The House of Delegates and Senate voted Wednesday to adopt a compromise bill that would help doctors create their own insurance company. It also caps most pain and suffering awards at $ 250,000 and places a $ 500,000 cap on awards arising from trauma cases.

The House voted 91-4 while the Senate vote was 33-1. Senate Majority Leader Truman Chafin, D-Mingo, who is a trial lawyer, cast the lone negative vote.

The bill also would give doctors $ 10 million worth of credits against the Medicaid tax they now pay, but would charge most $ 1,000 each to fund the physicians’ mutual company.

But physicians won’t have any real say in the mutual until 2005, McKinney said, noting his disappointment.

The legislation would similarly assess private insurers a $ 2,500 one-time fee, while loaning the mutual $ 24 million from the state tobacco settlement fund.

The bill now goes to Gov. Bob Wise for approval. It includes several measures proposed by Wise. He also had proposed limits on lawsuits.

“We want to compel creation of a physicians’ mutual,” Judiciary Chairman Jon Amores, D-Kanawha, said during House debate on the proposal. “That is one of the major stated intents of this legislation.”

The Legislature has been dealing with medical malpractice since 2001, when Wise proposed that the state create a state-run insurance program to help keep doctors from leaving because of high malpractice insurance costs.

Lawmakers started this year’s session in January under the threat that a walkout by Northern Panhandle doctors would spread to other sections of the state.

The Legislature wants the physicians’ mutual to replace the state-run program operated by the Board of Risk and Insurance Management. The program now insures more than 1,000 doctors who can’t obtain coverage elsewhere.

Financial relief for doctors burdened by high insurance costs is a compromise between the House’s income tax credit and the Senate’s less-generous provider tax break.

Doctors who pay between $ 30,000 and $ 70,000 annually for insurance would see a 10 percent break on their provider tax for this year and next. Doctors who pay more than $ 70,000 would receive a 20 percent break.

The compromise includes the Senate’s lawsuit and damage caps, which are considered less stringent than the House’s version.

“If we don’t pass this and gives the physicians’ mutual the measures it needs to be successful, we’re going to continue to lose doctors and be unable to recruit more into the state,” said Delegate Carrie Webster, D-Kanawha and a lawyer.

Damage cap opponents blame bad doctors and reckless insurance company practices for high insurance costs and loss of coverage. They maintain that the number of malpractice lawsuits and the size of jury awards are not the problem.

Amores told delegates he could not predict if the bill would lower doctors’ premiums or encourage private insurers to resume coverage in West Virginia.

“I can’t affirmatively tell you that passage of this bill will make something happen,” Amores said. “We’ve got a great interest now that the medical mutual, regardless of what the private insurers do, remains solvent.”

Sen. Larry Rowe, D-Kanawha, noted that the bill included a requirement that the Legislature study the creation of a victims’ payment fund to help those who would receive limited economic damages.

Chafin said the Legislature would soon regret the bill’s passage. Saying there were 90,000 annual U.S. cases of medical malpractice, he said a child or housewife would soon be the victim of a gross doctor’s mistake and be able to collect only $ 250,000.

He also said the bill violated West Virginia’s Constitution by singling out a class of people, doctors, and providing them tax breaks.

“The squeakiest wheel got the grease,” Chafin said. “We placated doctors instead of addressing the real problem of an under-regulated insurance industry.”

McKinney, meanwhile, said West Virginia’s legislation would be a model for other states now encountering some of the same problems.