Doctors call for malpractice rate reduction

Baltimore Business Journal – by Sue Schultz Staff

Doctors practicing in Maryland are calling for a reduction in their medical malpractice premiums following a decision by the state’s largest medical liability insurer to give back $32.5 million in state funds that would have gone toward lowering physician’s malpractice rates.

Dr. Carol Ritter, a Towson gynecologist, told Maryland Insurance Commissioner Ralph Tyler on Friday that doctors need the help to stay in practice and provide necessary health care services to patients throughout the state.

“We can’t get doctors into Maryland,” Ritter said.

Ritter’s testimony comes as the state’s insurance commission considers Medical Mutual Liability Insurance Society of Maryland’s plan to drop out of the state subsidy program created almost three years ago to help lower medical malpractice premiums for doctors in Maryland.

Medical Mutual, the state’s largest medical liability insurer, has received $72.4 million in state money since 2005 — a measure passed by the General Assembly in late-2004. The insurer plans to return nearly $33 million, citing a decrease in the amount of malpractice lawsuits its member physicians are facing. The subsidy was slated to run out at the end of next year.

Medical Mutual also plans to give its members a dividend of $67.7 million to help offset malpractice costs. But doctors say that dividend won’t be enough.

“It’s not a relief because I can’t get back to the specialty,” said Ritter, referring to her decision to stop practicing obstetrics in 2004.

Ritter’s insurance premiums jumped from $52,000 a year in 2003 to more than $100,000 a year in 2004. By dropping the specialty, her rates are now roughly $28,000 a year.

In 2007, doctors insured by Medical Mutual saw an 8 percent decline in their rates. The insurer hasn’t filed for a rate change for 2008.

“Giving the dividend is in the best interest of the doctors,” said Jeff Poole, Medical Mutual’s executive vice president and chief operating officer.

By providing a dividend, but not providing a subsidy, Poole said doctors insured through Medical Mutual would see no growth in their insurance premiums. But he added that if Medical Mutual was not permitted to offer the dividend or subsidy, their insured doctors could pay 22 percent more in 2008 than they did in 2007.

But state officials questioned Medical Mutual’s decision to not use the money to help control future rate increases and why they were opting out of the subsidy program.

Poole told Tyler, the state’s insurance commissioner, that if the insurer didn’t declare the money as a dividend, the federal government would take $24 million for income taxes.

“Our mission was to keep the price that a physician pays level so they would see no increase,” said Poole.

But Ritter told Tyler that a dividend would only help the portion of the state’s doctors insured by Medical Mutual and wouldn’t give relief across the board to doctors statewide.

Tyler could decide whether to approve the dividend by Oct. 19.
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