Ga. Proposal Would Require Prior State Approval of Med-Mal Rates

By Greg Bluestein
http://www.insurancejournal.com

House Republicans introduced a measure that requires Georgia’s top insurance official to sign off on each medical malpractice rate hike, saying they’re unconvinced that new state laws aimed at suppressing medical malpractice are working.

The proposal would require Georgia’s Insurance Commissioner to approve or reject each rate increase request submitted by a medical malpractice insurer. It also calls for a public hearing when the insurer requests a hike of more than 10 percent.

It amounts to a significant change of current law, which allows insurers to adopt a higher rate before the commissioner has reviewed the request.

“We need to do everything we can to make sure people are able to get affordable health care,” said state Rep. Robert Mumford, R-Conyers. “In my view, tort reform has not produced the results it advertised.”

An Associated Press analysis of state insurance records last year revealed six of the state’s top insurers of doctors and dentists have increased their liability rates – in some cases by more than a third – since new restrictions on malpractice cases became law in February 2005.

Supporters of Mumford’s measure point to California as an example of how the slight change could ultimately decrease medical malpractice rates. Three years after the state approved a similar measure, the malpractice premiums declined by 3 percent, according to Georgia Watch, a consumer advocacy group.

Insurance Commissioner John Oxendine said he now has “prior approval” to OK rate hikes on personal automobile insurance, which he said has allowed Georgia to maintain some of the nation’s lowest auto rates.

Oxendine said extending the authority to medical malpractice sounds “agreeable,” although he stressed he has yet to read the measure.

“We do need some time to review it,” he said. “Although I want to make it clear that I am 110 percent in favor of anything that gives added relief to our doctors and hospitals.”

The legislation is the latest of several attempts over the last two years to reconsider portions of Georgia’s tort reform laws, which include a $350,000 limit on jury awards for malpractice victims’ pain and suffering, tougher standards for expert witnesses in malpractice trials and new incentives for patients to settle out of court.

Doctors and hospitals contended the measures, dubbed “civil justice reform,” would curb malpractice insurance rates and help lure more doctors to Georgia. Business lobbies, too, threw their weight behind the legislation because it encourages speedy out-of-court settlements and penalizes parties who make frivolous claims.

But trial lawyers and patient advocacy groups argued that limiting damage awards puts an arbitrary price on a victim’s life, and that the state’s medical insurers have fostered a false crisis by driving up premiums in a market with little competition.
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