Larsen to lead malpractice-premium battle

Coalition will push bills aimed at taming costs

December 11, 2003|By M. William Salganik | M. William Salganik,SUN STAFF

Setting the stage for a bruising battle in Annapolis over the rise in malpractice insurance premiums, a coalition of health care providers announced yesterday that it would push a legislative package aimed at reducing costs to be led by Steven B. Larsen, the former state insurance commissioner who struck down the for-profit, CareFirst conversion.

Joining Larsen at a press conference in the state capital were a Harford County obstetrician who said he will stop delivering babies to avoid a jump in malpractice premiums and the executive director of National Lutheran Home for the Aged, who said liability premiums for the Rockville facility leaped to $352,000 from $44,000 in four years. That, despite the facility having no liability claims and perfect scores on state and federal inspections, said Pastor Richard Reichard, the Lutheran Home director.

"The ultimate payers of these increases are the private-pay patients and the state Medicaid system," he said.

Larsen, known as a consumer advocate during his term as insurance commissioner, said malpractice premiums are "a consumer issue" because they use up money that could be used for care. Larsen, who was chief lobbyist for then-Gov. Parris N. Glendening before becoming insurance commissioner, said he will work with Gov. Robert L. Ehrlich Jr. and legislative leaders to try to find agreement on malpractice reforms.

On the other side of the debate is the Maryland Trial Lawyers Association. It argues that the current rules protect consumers from substandard medical care.

Kevin McCarthy, a board member, said the lawyers' group hopes to raise $1 million for its campaign. Larsen said his group's budget was "nowhere near" $1 million.

The trial lawyers have their own examples to justify their position.

Among them will be Gilford Tyler. After an auto accident, the Severn man lost a leg through what a jury found was medical error. He plans to testify during the legislative session that begins next month.

Tyler, now 30, said he had been initially awarded $5.5 million by a jury, but, "I got nowhere close to what society saw."

The award was reduced to $1.6 million by the cap. After medical expenses and lawyer fees were paid, Tyler said, the remaining money was put into a trust fund which pays him $1,600 a month. He has been unable to find work for more than a year because of his disability.

The group led by Larsen, called Alliance to Preserve Access, proposes four reform steps - stricter ways of calculating economic damages, a reduction of the limit on damages for "pain and suffering," a limit on attorney fees and a system of paying out large verdicts over time.

The Ehrlich administration has indicated support for a similar package.

The trial lawyers are countering with an insurance commissioner of their own. Jay Angoff, former Missouri regulator, plans to testify for the trial lawyers.

Angoff formerly worked with Larsen as a consultant to the state insurance administration as Larsen reviewed CareFirst BlueCross BlueShield's application to convert to for-profit operation and sell itself. Angoff opined - and Larsen agreed in blocking the deal - that the monetary bonuses CareFirst had promised to its executives as part of the deal violated Maryland law.

Angoff said yesterday the increase in malpractice premiums resulted not from legal system excesses but from drops in earnings on insurers' investments.

"Regulating or limiting something that is not causing the problem will not fix the problem," he said.

McCarthy of the trial lawyers group said the solution was to crack down on bad doctors. He said 3 percent of doctors had generated 51 percent of payments.

Larsen, however, disagreed with that argument, pointing out that insurers drop coverage on doctors with repeat problems. He pointed instead to escalating claims payments as being responsible for most of the increase in malpractice premiums.

For example, he said, Medical Mutual Liability Insurance Society of Maryland paid an average of $234,000 per claim in 2000, $272,000 per claim last year and $367,000 per claim through October of this year.

Medical Mutual, the primary malpractice insurer for physicians in the state, is a member of Larsen's alliance.

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