Several bills before the General Assembly would require detailed reports from medical malpractice insurers about their enrollment, premiums collected, claims paid and amounts spent on lawyers and other expenses related to claims.
The goal, the bills’ proponents say, is to gather the information needed to assess Rhode Island’s medical liability system and, if appropriate, reform it.
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What few may acknowledge, however, is existing laws already require several malpractice-related reports. And while the Board of Medical Licensure & Discipline at the state Department of Health does collect data relevant to doctors’ disciplinary records, it’s unclear what, if anything, is done with reports sent to the Department of Business Regulation.
DBR officials have long said they don’t have the manpower – or any mandate – to analyze the reports of malpractice settlements and judgments that insurers are required to send them. And annual reports of premiums collected and claims paid may not be reviewed in-depth.
Yet the data in those reports goes to the heart of much of what Rhode Island policy-makers say they want to know: How much are health care providers paying for malpractice insurance? How big are the settlements and judgments paid out each year? How much are insurers spending on legal defense, expert witnesses and various claims-processing costs? How many malpractice lawsuits are being filed? How long is it taking to close claims?
A review of the 2004 reports filed by last month’s deadline shows some insurers aren’t providing all the requested information. And one, ProSelect, Rhode Island’s second-largest malpractice insurer, only caught up this year, after being prodded by the DBR.
The reports show how few choices Rhode Island doctors, nurses and other health professionals have anymore. The overwhelming majority of insurers contacted by the DBR reported that they didn’t write malpractice in the state. Including insurers for dentists, pharmacists and other specialties, only 11 carriers did any malpractice business in the state, and only seven covered more than five people.
NORCAL, the largest carrier, reported collecting nearly $18.1 million in premiums, 86 percent more than its biggest competitor, the Medical Malpractice Joint Underwriting Association of Rhode Island (MMJUA), which reported $9.7 million in premiums for 2004. ProSelect had $4.7 million in premiums, and fourth-ranked Medical Protective, $1.22 million.
Medical Protective, which has said it’s withdrawing from the Rhode Island market, reported only 52 people on its rolls as of Dec. 31 – 39 dentists and 13 doctors. At the company’s peak in the state, it had covered 223 doctors.
The reports only include paid losses, not amounts reserved for outstanding claims, of which Medical Protective said it had 65. But since 1994, the company reported collecting $18.9 million in premiums and paying out $13.3 million in indemnity, plus about $882,000 in defense costs.
The MMJUA’s report, which doesn’t contain such detailed historical data (it’s not required), shows 2004 was an expensive year for the company, which is Rhode Island’s malpractice insurer of last resort: it paid out almost $8.6 million in indemnity, and spent $1.6 million on defense costs –for a total of $456,380 more spent on claims than it brought in.
NORCAL officials often complain about how long it takes to close cases in Rhode Island, and several proposed “tort reforms” now before the General Assembly would seek to speed up the process. And while NORCAL’s own filing doesn’t include the years of incidents involved in claims filed last year (which is required), the MMJUA’s report does provide relevant data.
Countering insurers’ suggestion that many lawyers sit on their claims until the last possible minute, 65 of the 95 claims filed against the MMJUA last year involved incidents in 2003 or 2004, and another 13 went back only to 2002.
But only seven of the claims were closed by the year’s end, and three-quarters of the indemnity paid by the company in 2004 involved incidents in 1999 or earlier. The single biggest payout, $3.5 million, was for a 1997 incident. Another $1 million was paid in a case going back to 1986.
And over $23,000 was spent on defense costs for alleged incidents from 1976 to 1984.
Similarly, of Medical Protective’s 65 outstanding claims, 59 were over three years old.
Still, the reporting can be fragmented, making it hard to compare the companies, or even to compare what’s in one set of reports to what’s in others – such as the materials sent to the Board of Medical Licensure, or the “yellow books” with detailed financial data submitted separately.
Philip Hinderberger, senior vice president and general counsel for NORCAL, said Rhode Island isn’t the only state having this problem: Everyone has a different system, or multiple systems, and “it results in a Tower of Babel. It’s absolutely of no use.”
The National Association of Insurance Commissioners is now working on a uniform reporting system that could be used by the different states, Hinderberger said, and that should make things easier for insurers and policy-makers alike.
“The best approach would be to have a consistent report that people like you and I could make some sense of,” he said. “I think there is some light at the end of the tunnel.”
