The state's insurance commissioner approved yesterday a 33 percent rate increase for the malpractice insurer that covers most of the state's doctors, less than the 41 percent the insurer sought but enough to increase the temperature in a heated debate over malpractice reforms.
The ruling by Commissioner Alfred W. Redmer Jr. on the rate boost for Medical Mutual Liability Insurance Society of Maryland - which provides coverage for an estimated three-quarters of the state's doctors in private practice - follows a 28 percent increase this year, adding to a swirl of task forces, failed legislation and cries by doctors that rising rates will force them out of practice or out of the state.
Even at less than the requested increase, Redmer's decision would push premiums for obstetricians, the highest-risk specialty, to more than $150,000 next year. Most in the debate have called for a special legislative session that could head off the latest round of premium increases, but there has been no agreement on how to do that.
"It's still an unaffordable rate hike for the docs," T. Michael Preston, executive director of MedChi, the state medical society, said yesterday. "The dynamics haven't changed, and the urgency remains the same."
He called for state action this fall to stabilize rates and to modify the way courts deal with malpractice cases.
Dennis O'Brien, a spokesman for the Maryland Trial Lawyers Association, said his group thinks changes in the court system would shortchange victims, but he agreed that a one-third boost in insurance bills will increase the pressure for a short-term measure to stabilize premiums.
"The hurricane's getting closer to the coast," O'Brien said. "This is only going to turn the heat up on all parties to find a solution."
Medical Mutual said at a hearing last month that its actuaries projected that a 46 percent increase in premiums was justified. It noted that although the number of claims of damage from medical mistakes had remained stable, the company is paying in nearly 40 percent of those claims, up from about 25 percent a few years ago. The average claim payment, it said, had jumped to $410,000 this year, nearly double the average of five years ago.
The hearing was filled with testimony by doctors that another large increase would push more doctors to retire, leave Maryland or curtail their practices, jeopardizing access to care.
In his ruling, Redmer noted that he had the legal power only to decide whether projected claims justified the proposed rate increase and not the "authority to consider the impact that a proposed rate increase will have on the consumer."
In approving a 33 percent increase, Redmer followed the recommendation of a consultant hired by his department.
Redmer also blocked a proposal by Medical Mutual to include psychiatrists and dermatologists in a risk group with primary care doctors, who pay a higher rate. That would have roughly doubled the premiums for both specialties, and both opposed the change at the hearing.
The 33 percent would be applied across the board. Neurosurgeons, who pay about $88,000 a year (the rate varies with location and claims history), would pay about $117,000. Primary care doctors, such as pediatricians and internists, who now pay about $14,000, would pay more than $18,000.
Although not covered by Medical Mutual, other care providers - including hospitals, nursing homes and nurse midwives - have also been paying large increases in premiums and, in some cases, have had difficulty buying insurance at all.
A reform bill backed by Gov. Robert L. Ehrlich Jr. and by MedChi and other health providers at this year's legislative session was killed in the Senate. It would have changed the way courts calculate damages, changed the way damages are paid out and reduced the limit on pain and suffering awards.
Medical Mutual has since proposed that it freeze its rates at the current level while the state sets up a fund to pay future claims that exceed what it collects in premiums. The money, legislators have suggested, might come from increasing penalties on drunken drivers. The proposal has broad support, but there is disagreement about what other changes need to accompany the fund.
The Ehrlich administration said a fund would be only a temporary solution and must be tied to measures to reduce costs.
O'Brien said the trial lawyers support the fund plan and want a stronger disciplinary system against doctors who injure patients, but that they don't think reform is needed in the court system.
Sen. Paula C. Hollinger, a Baltimore County Democrat who chairs the Education, Health and Environmental Affairs Committee, said the political situation has changed since reform proposals were killed in the spring.