ANNAPOLIS – As Maryland lawmakers struggle to solve the medical malpractice insurance crisis, some members of the Governor’s Task Force are looking west for a solution.
California reformed its medical malpractice laws 29 years ago and now is being used as a model by some members of the Maryland task force.
Maryland doctors are facing several malpractice insurance problems: an increasing cap on pain-and-suffering damages, unlimited attorneys’ fees and the lack of so-called structured settlements, which allow defendants to stretch damage payments over time, rather than in one lump sum. In addition, physicians’ insurance premiums continue to rise.
Medical Mutual, which covers the majority of Maryland doctors, won approval from the state insurance commissioner Tuesday for a 33 percent rate hike next year, according to the Associated Press. That increase follows a 28 percent rise in 2004.
Doctors say they can’t pay those kinds of rates.
“Medical malpractice (insurance) in Maryland has soared to the extent it’s unaffordable and putting doctors out of business,” said Maryland State Medical Society Executive Director Michael Preston.
California’s medical malpractice situation was just as acute when doctors went on strike in 1975. In response, the California Legislature passed the Medical Injury Compensation Reform Act. MICRA limited lawyers’ fees, capped the amount victims could receive in pain-and-suffering damages at $250,000 and gave defendants the option to pay future expenses greater than $50,000 in regular increments.
Bruce G. Fagel, a California medical malpractice lawyer said MICRA keeps all sides relatively happy and protects California from the crisis now affecting other states, including Maryland.
“You’ve got to learn to live with the devil you’ve got because the alternate could be worse,” he said. “(MICRA) has created a stable environment in California. Doctors aren’t bitching.”
While California’s cap on pain-and-suffering damages is fixed, Maryland’s current $635,000 cap increases by $15,000 every Oct. 1 to keep up with inflation, an idea Fagel likes. Neither state caps economic – or actual – damages, such as medical bills.
Furthermore, Maryland courts and arbitration panels can decide if attorney fees are reasonable, although Donald J. Hogan Jr., a member of the Governor’s Task Force, said he isn’t aware of any examples of courts doing so.
But California’s incremental payment plan intrigues Hogan. The task force, he said, is recommending defendants be allowed to pay future costs over a period of time. In Maryland, courts and arbitration panels may rule on this matter, but haven’t to his knowledge, he said.
Maryland leaders are so concerned about fixing the malpractice insurance problems quickly that they are considering calling a special session of the General Assembly to push through a solution.
Gov. Robert L. Ehrlich told physicians last week that failing to solve the problem will drive more doctors from their line of work as their premiums continue to soar.
“I guarantee you next year if we don’t move, we’re looking at another double-digit increase (in insurance rates),” he said to the doctors at Sinai Hospital in Baltimore.
Ehrlich said he admires the California system, but it won’t work in Maryland.
“Do you think I could get that passed with this Legislature?” he asked. “I can’t get that passed.”
The American Medical Association says California is one of six states not facing a medical liability crisis. While it lists Maryland as one of 24 states “showing problem signs,” it says doctors in other states are confronting more ominous malpractice laws.
For example, Connecticut does not impose a cap on pain-and-suffering damages. While future medical costs up to $200,000 must be paid all at once, for any amount over $200,000, both sides must try to reach a deal that would allow the plaintiff to collect over a period of time. If no settlement is reached, the defendant must pay the entire sum immediately.
According to the AMA, “claims in California are settled in one-third less time than in states without caps on non-economic damages,” such as Connecticut.
Fagel, who practiced medicine for 10 years before turning to law, said California attorneys are concerned about MICRA because the hard cap doesn’t take inflation into account. But he said he doubts the state will change the law anytime soon.
He said he could earn as much as 60 percent more if MICRA was not in effect, but he can maintain his practice because he focuses on cases involving economic or actual damages. Lawyers who deal with cases that involve pain-and-suffering damages aren’t as fortunate, Fagel said. Because these awards are capped at $250,000, many attorneys settle for less before they go to trial.
– 30 – CNS-9-16-04