Md. Insurer Says It No Longer Needs Malpractice Premium Subsidy

Maryland’s largest medical malpractice insurer plans to leave a state premium subsidy program and return some of the money it has received, saying it no longer needs the subsidy to stabilize premiums for doctors because the cost of claims is dropping.

One insurance industry official said the drop in claims follows a national trend, although the head of a state medical society said malpractice premiums remain an issue for doctors.

Medical Mutual Liability Insurance Society of Maryland is proposing to return $32.5 million of the $72.4 million in subsidies it has received so far. Med Mutual filed the plan last week with the Maryland Insurance Administration, which released details Monday in response to a public records request by The (Baltimore) Sun.

The four-year subsidy program was enacted by the state legislature in an emergency Christmas week session in 2004 after rising claims led Med Mutual to impose rate increases of 28 percent and 33 percent. That prompted an Annapolis rally by doctors who said the increases would force them from practicing in the state.

Three other insurers participate in the subsidy program, but Med Mutual has received about three-quarters of the money paid out.

Karen Barrow, a spokeswoman for the Maryland Insurance Administration, said the proposal was being reviewed and an Oct. 5 hearing was scheduled.

Gregory Larcher, an actuary in the Columbia office of Aon Consulting, which conducts an annual study of medical liability claims, said the reason for the decline is not clear, although he noted recent efforts by doctors and hospitals to analyze medical errors and take steps to prevent them.

Dr. Martin Wasserman, executive director of MedChi, the professional society for the state’s doctors, said malpractice premiums remain a problem for the state’s doctors.

“While we have a current reprieve from the crises of 2003-2004, the need to address all of the problems associated with medical liability costs has not gone away,” Wasserman said.

“There will be another crisis,” he said. “The concerns I have are that this can lead people into complacency and to the arguments that there never was a crisis.”

Wasserman said doctors still support tort reform — changes in the laws governing how medical liability claims are judged and paid out

However, Sen. Brian E. Frosh, chairman of the Judicial Proceedings Committee, said the downturn in claims shows lawmakers acted appropriately.

“It appears now it was a cyclical movement in the insurance industry. We had a couple of bad years in a row,” Frosh said.

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Information from: The (Baltimore) Sun,
http://www.baltimoresun.com