Doctors won't have to carry more malpractice insurance

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The Pennsylvania Insurance Department announced today there still aren’t enough medical malpractice insurers in the state to require to doctors to carry at least $750,000 in coverage.

The state will continue to require doctors to carry $500,000 in coverage from a private insurer and to obtain another $500,000 from a state fund called Mcare. The requirement also applies to hospitals and nursing homes.

Mcare covers medical malpractice awards that top the $500,000 of coverage that doctors, hospitals and nursing homes must carry.

When Mcare was created, the plan was for doctors and the other providers to pay an annual surcharge to cover the Mcare payout.

After medical malpractice awards began rising dramatically in the early part of the decade, Gov. Ed Rendell used tax money to pay the entire surcharge for high risk specialists and half the surcharge for other doctors.

That program, still in effect, is expected to contribute $138 million toward doctors’ medical malpractice expenses this year.

A 2002 law aimed at reducing medical malpractice lawsuits and improving patient safety calls for phasing out Mcare and requiring doctors to obtain all malpractice coverage from the private market.

But the phaseout can’t begin until the insurance department concludes there is adequate private coverage available.

Today, Deputy Insurance Commissioner Randy Rohrbaugh announced “there continues to be improvement in the medical malpractice marketplace,” but not enough to require doctors to obtain the additional coverage.

He said he based his determination on an actuarial study by Pricewaterhouse Coopers.

The Pennsylvania Medical Society favors eliminating Mcare, saying it discourages doctors from coming to Pennsylvania because they have to pay toward malpractice cases that happened before they arrived.

But the society also warns of a spike in premiums paid by doctors. Once all the Mcare cases are paid off, the society wants the money to be used to subsidize doctors’ malpractice premiums.

The money that Rendell has used to help cover their Mcare costs comes from several sources, including a 25 cent per pack tax on cigarettes, that generates $230 million per year.

Since 2001, the number of medical malpractice lawsuits filed in Pennsylvania has dropped from 2,659 to 1,693. The Mcare payout for awards topping $500,000 has dropped from $341 in 2000 to $210 million in 2006.
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