Mississippi doctors, staunch supporters of additional tort reform, have a proposal for state lawmakers they believe will help alleviate the current medical malpractice insurance situation.
The Medical Liability Reform Proposal, drafted by the Mississippi State Medical Association (MSMA), points out problems with the current system and two proposed solutions — creating a voluntary Patient Compensation Fund (PCF) and converting the current State Medical Liability Insurance Pool to a PCF.
“I think that a majority of the Legislature would vote for additional medical liability reform legislation if given the opportunity,” said MSMA president Bill Roberts. “While we feel relatively good about that occurring in the Senate, we are unsure about what will happen in the House.”
Flaws in current system
According to the proposal, problems with the current system reflect that:
• Insurance availability is totally dependent on the willingness of the insurance industry to write coverage in Mississippi, placing health care providers in a position that leaves them “constantly at the mercy of the industry`s decisions on market participation;”
• Even though recoveries for non-economic damages have been capped at $500,000, insurers continue to have unlimited exposure on economic damages, which reduces the predictability of risk;
• Unlimited exposure for economic losses by insurers leads to higher premiums and affordability problems;
• Even though the State Medical Liability Insurance Pool, administered by the Tort Claims Board, has provided temporary relief for physicians unable to obtain coverage, participants in the pool, and those previously insured by Doctors Insurance Reciprocal (DIR) who have found primary coverage elsewhere, are still without coverage for “prior acts,” which occurred during the term of their DIR policy; and
• The enactment of civil justice reforms has no immediate or short-term impact on insurance costs and availability, and can take years before benefits of those changes are realized in the market.
“Right now, I know of no admitted medical liability insurance carrier in Mississippi that is writing new business in the state other than Medical Assurance Company of Mississippi (MACM), and they are doing it only on a very restricted basis,” said Roberts. “The only other source for medical liability insurance is the State Insurance Pool and the so-called `surplus lines’ carriers that charge enormously large premium rates.”
The predictability factor
During the first five months of this year, MACM received more than 2,000 cases as a result of plaintiff`s attorneys rushing to the courthouse to beat the Jan. 1 deadline, said MACM CEO Michael Houpt.
“Apparently, some of them felt like the new reform might hurt their cases,” he said. “It`s going to be three or four years before we see any real benefit from what has been passed so far. Until the first case is tried and appealed, by whichever side feels they were wronged by the reform, we really don`t know what the effect is going to be.”
Houpt said it takes an average of three to four years between the time an incident occurs until it`s reported to MACM and is resolved.
“That`s an average,” he pointed out. “We have some cases still on the books going back to the ‘80s.”
Chris Burkhalter, partner in Bickerstaff, Whatley, Ryan & Burkhalter Consulting Actuaries in Ridgeland, said two factors are required to increase availability of medical malpractice insurance: increased capital or increased predictability.
“Additional capital to support med mal writings will be hard to find, because most investors understandably do not want their investment returns to be determined by the decisions of Mississippi juries, given the current legal climate in the state. Consistency and predictability of med mal experience in Mississippi would eventually attract more insurance carriers to the state. Caps on non-economic damages are one attempt to achieve more predictability.”
Creating a voluntary PCF — a medical liability insurance mechanism established by state law to increase professional liability coverage availability and/or affordability — would primarily provide coverage for any losses exceeding the primary layer of liability insurance coverage. The PCF recommended in the proposal would be responsible for the payment of any award, settlement or judgment in excess of a participant`s primary $100,000 layer of coverage, up to a maximum of $500,000, excluding necessary incurred and future medical costs.
The second solution — converting the current State Medical Liability Insurance Pool to a PCF — would involve authorizing the primary coverage of $100,000 when a physician is unable to obtain similar coverage from an admitted carrier licensed to do business in Mississippi, at an annual cost which the PCF determines to be “affordable.” It would provide “excess loss” coverage for awards, settlements or judgments in excess of the $100,000 primary coverage, up to a maximum of $500,000, excluding losses for incurred and future medical care required by the injury. It would cover “prior acts” for those physicians whose primary coverage is provided by the PCF, but coverage for “prior acts” is either not offered by the participant`s previous insurer or the PCF has determined that it is not “affordable,” or whose primary coverage is provided by a private insurer who does not offer coverage for “prior acts,” or the cost of such coverage is deemed prohibitive by the PCF.
Mississippian For Economic Progress executive director Steve Browning said he believes Gov.-elect Haley Barbour and Lt. Gov. Amy Tuck, who was re-elected last month, will support the passage of legislation to alleviate the medical malpractice insurance crisis.
“Gov.-elect Barbour campaigned heavily on lawsuit reform earlier this year,” he said. “Incumbent Lt. Gov. Tuck ran for re-election on her strong record to end lawsuit abuse in our courtrooms. Having a governor and lieutenant governor who equally appreciate how frivolous lawsuits and outrageous courtroom awards can scare away medical specialists and access to healthcare is key to enacting more tort reform in the near future. Mississippi`s working families are in a stronger position today to see comprehensive civil justice reform than they were in 2002.”
Contact MBJ contributing writer Lynne W. Jeter at firstname.lastname@example.org.