Statement of Sen. Stewart J. Greenleaf on Proposed Medical Malpractice Insurance Bills

Last session, the General Assembly passed several laws, based on recommendations from the medical community, to provide relief to Pennsylvania health care providers struggling with increasing costs and decreasing availability of medical malpractice insurance. Although almost 30 reforms were enacted, the medical malpractice insurance crisis continues to impact health care providers across the state.

Today, I am proposing a legislative package that is intended to lower the cost and increase the availability of medical malpractice insurance and reduce frivolous lawsuits. My proposals, which I will be introducing in the near future, borrow from some strategies that have worked in reducing lawsuits and in controlling the availability and cost in the auto insurance market.

• One bill is similar to Act 6 of 1990, which limits auto accident lawsuits to cases involving death, serious impairment of bodily function, or permanent disfigurement. My proposal would apply those same limitations to lawsuits filed in medical malpractice cases.

• A second bill is modeled loosely on the auto insurance assigned risk program, which provides equitable apportionment of assigned risk cases among all vehicle insurers based on market share in the state. My proposed Physicians Safety Net Insurance Program (P-SNIP) would require all insurance companies writing property and casualty insurance in the commonwealth to participate, on a basis proportionate to the amount of their total property and casualty business in the commonwealth, in the writing of medical malpractice insurance. Just as with the auto insurance assigned risk pool, where there are separate rates for drivers designated "clean" risk and those designated "high" risk, there would be separate rates under P-SNIP for health care providers based on their medical malpractice histories. According to 2001 Insurance Department figures, there are about 900 property and casualty insurers collecting a total of about $15 billion annually in premiums. Also according to the 2001 data, there are about 80 insurers writing medical malpractice insurance in the state and collecting about $371 million in premiums, but obtaining coverage is still a problem. Medical malpractice amounts to about 2.5 percent of the overall property and casualty market in Pennsylvania. By spreading the risk to many more companies under the P-SNIP plan, we will be increasing the supply of medical malpractice insurance and reducing the cost to doctors. This would also result in the eventual elimination of the Joint Underwriting Association (JUA) program that currently serves as the residual market for health care providers who cannot obtain insurance in the regular market. Doctors have told me that JUA rates are unreasonably high, even for those whose insurers have never paid out on a malpractice claim.

• A third bill is aimed at savings and fairness for health care providers. It would most benefit doctors without a history of medical malpractice payouts, but it would provide a more equitable method of determining premiums for all doctors. It would require the State Insurance Department to establish standards that medical malpractice insurers would follow in developing a rating system based on the experience of health care providers. The rating system would determine the coverage level of individual doctors. Currently all Pennsylvania doctors are required to carry one million in coverage. My bill would reduce the mandatory minimum coverage level to $250,000—a rate that would be available to doctors who have no experience with serious and valid malpractice claims.

• As an alternative to the experience rating plan, I am reintroducing my bill from last session to eliminate entirely the mandatory medical malpractice coverage requirement and to allow doctors to make their own coverage level decisions. In both this measure and the experience rating proposal, there will be a provision requiring health care providers to include on all patient procedure consent forms the amount of medical malpractice insurance that they carry. This will help patients in making informed decisions when they sign consent forms for treatment procedures.