The full U.S. House of Representatives is the next stop for a medical professional liability insurance bill advanced by the Energy and Commerce Committee.
After more than a day of debate, the full committee voted 30-20, primarily along party lines, in support of HR 5. The legislation, titled the HEALTH Act (Help Efficient, Accessibly, Low-cost, Timely Healthcare), includes a $250,000 cap on noneconomic damages, a ban on subrogation by collateral sources, a sliding-scale fee schedule for attorney contingency fees and periodic payments of future damages. The bill limits punitive damages to "instances where a person acted with malicious intent or deliberately failed to avoid injury," according to a statement from the committee majority.
The GOP majority rejected all but one of 14 Democratic amendments, including a proposal to allow states the option of choosing their own approach to MPLI reforms (BestWire, May 11, 2011). The majority rejected the proposal from Rep. Tammy Baldwin, D-Wis., citing marketplace issues from inconsistent state-by-state rules that lead to differences in the availability of physicians and quality of care.
The legislation accounts for states that have higher or lower caps on damages and would allow them to keep those levels, Rep. Bill Cassidy, R-La., said (BestWire, May 11, 2011).
"The medical liability system in this country is not a system at all. It is a fragmented patchwork of policies that jeopardize access to care and impose added costs to the American people and their government, through Medicare and Medicaid," Chairman Fred Upton, R-Mich., said in a statement. "It is time to enact real, comprehensive reform so we can finally have a medical liability system that works for our nation's patients and doctors."
The bill is a boon to insurance companies and leaves victims in the lurch, said Rep. Anthony Weiner, D-N.Y. "All my friends on the opposite side of the aisle want to do is to benefit insurance companies," he said.
The Obama administration is looking to provide $250 million in incentives to encourage states to adopt medical professional liability reforms. The Affordable Care Act assigned $50 million for demonstration projects to help states craft alternatives to litigation for medical liability cases, which insurers and physicians believe deserve part of the blame for rising medical costs (BestWire, Feb. 17, 2011).
Medical professional liability insurance writers should get a good handle on the exposures they are insuring, according to an A.M. Best Co. analyst who took part in a recent A.M. Best Co. webinar on the medical liability market. If not, "The risk is mispriced, so there's inadequate income to write those exposures," said Henry Witmer, assistant vice president at A.M. Best Co., one of the authors of A.M. Best's annual special report on the medical liability sector and part of a panel of experts to speak May 9 at the "State of the Medical Liability Insurance Market" webinar (BestWire, May 10, 2011).
The top five writers of medical professional liability insurance in the United States in 2009 were MLMIC group, with a 7.1% market share; Berkshire Hathaway Insurance Group, with 6.8%; Doctors Co. Insurance Group, with 6.7%; ProAssurance Group, with 5.1%; and American International Group Inc., with 5.0%, according to BestLink, which provides online access to A.M. Best's database of insurance information.
(By Sean P. Carr, Washington Bureau Manager: sean.carr@ambest.com)
