Medical Malpractice Insurance Rates Rise for Some West Virginia Physicians

From the Charleston Gazette October 10, 2003, Friday
Copyright 2003 Knight Ridder/Tribune Business News
Copyright 2003 The Charleston Gazette

About seven months after medical malpractice reforms became law in West Virginia, premiums are going up for about 500 doctors insured by the state’s largest commercial provider of malpractice insurance.

The state Insurance Commission last week approved a 13 percent hike in the premiums Medical Assurance charges doctors. The company had asked for a 17.5 percent increase in June.

The commission approved the lower rate increase after analyzing the company’s request and related financial information.

State Insurance Commissioner Jane Cline said it was too soon to see the effects of the recent reforms in malpractice laws because claims against doctors often take years to be resolved.

In March, the Legislature passed a law that limits damages in malpractice lawsuits, helps doctors pay high insurance premiums and creates a doctor-run mutual to provide coverage.

Doctors, hospitals and the insurance industry, including Medical Assurance, lobbied for the measures, citing high premiums and a medical liability “crisis” in the state.

The malpractice legislation passed earlier this year caps damages for malpractice victims’ pain and suffering at $ 250,000, with some exceptions, and provides tax breaks for doctors based on their insurance premiums.

Frank O’Neil, a spokesman for Medical Assurance, based in Birmingham, Ala., said West Virginia’s reforms didn’t affect the rate the company asked for this year. The rate request was based on the company’s past performance in the state.

“We can expect tort reform to have some effect on losses, but until it does, we can’t give credit for that,” O’Neil said. “You have to wait until the losses show some change.”

The rate increase is the fourth one Medical Assurance has requested in four years, and the third time in a row the insurer has received a rate increase less than what it requested.

Last year, the company asked for a 23 percent hike and received a 16 percent increase. In 2001, it asked for 30 percent and got 18 percent. The commission granted the company’s request for a 35 percent hike in premiums in 2000.

For several years, Medical Assurance also had a secret deal with the West Virginia State Medical Association that paid the doctors’ group more than $ 100,000 to, among other things, lobby the Legislature on the company’s behalf. Doctors could also get discounts on their premiums for Medical Assurance policies and could get a share of the company’s profits.

Evan Jenkins, executive director of the state Medical Association, said he expects the malpractice reforms passed earlier this year to face several legal challenges.

Until then, the effects of the reforms will be uncertain, said Jenkins, who is also a state senator from Cabell County.

Investigate insurers better, lawyer recommends

In July, the Supreme Court rejected a legal challenge by Charleston malpractice lawyer Bill Druckman, who asked the court to delay the date the new cap on pain and suffering damages takes effect.

Druckman said the rate increase wasn’t a surprise and predicted more rate increases in the future.

“Tort reform doesn’t reduce rates,” he said. “It never has, and it never will.”

The Insurance Commission should also do a better job investigating the financial claims of insurers who ask for rate hikes, he added.

Druckman cited a recent federal study that found complications from medical errors kill 32,000 people annually in the United States and result in more than $ 9 billion in extra costs every year.

He suggested focusing on reducing medical errors, rather than pushing reforms that limit the rights of patients.