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'Med Mal' insurance rates still rising despite tort reform.

PRESIDENT BUSH IS TOUTING it in speeches, and its chances have increased along with the Republican majority in the Senate.

Still, plaintiffs' lawyers generally hope the U.S. Senate won't pass legislation limiting jury awards during its current session, which began Jan. 4. Among other things, Bush wants a federal ceiling of $250,000 on non-economic awards in medical malpractice cases. Non-economic damages, also known as compensatory damages, are jury awards for pain and suffering.

The federal proposal for caps has already been approved by the House of Representatives twice, but it died quickly in the Senate. With four more Republicans in the Senate now, there's a greater chance federally mandated caps will become law, even as the state's version of tort reform remains the subject of plenty of debate.

The 2003 Arkansas tort reform passed with the idea that it would limit skyrocketing insurance rates, particularly rates for the health care industry.

Act 649, also known as the Civil Justice Reform Act of 2003, modified defendant liability and tightened the burden of proof in malpractice cases, among other things. The law does not put a state cap on compensatory damages.

It did cap punitive damages at $250,000, but those damages are more applicable in suits where a jury seeks to punish an offender, and not so much in malpractice cases.

The Act has already faced legal challenges. In April, a coalition of the Arkansas Advocates for Nursing Home Residents, the Arkansas AFLCIO, the Arkansas Trial Lawyers Association and individual plaintiffs asked the Arkansas Supreme Court to declare the law unconstitutional, but the Court threw out the case in June.

David Wroten, assistant executive vice president of the Arkansas Medical Society, a proponent of the Arkansas law and of federal caps, said it may be too early to tell for sure if the Act has slowed insurance rates. He thinks it will take at least another two years to get a good fix on the laws repercussions.

The law is nearing its second anniversary. After March 25, every medical malpractice lawsuit filed in the state will fall under it. But for the last two years, most malpractice cases have fallen under the old law, Wroten said, so comparisons are a little premature.

According to a Nov. 1 report prepared by the Arkansas Insurance Department for the Legislative Council and the Arkansas General Assembly, there are only five companies writing new policies for physicians and surgeons in the state. All five had rate increases during 2003 or 2004, anywhere from 4 percent to 100 percent.

But Wroten said the 100 percent increase by Preferred Professional Insurance Co. was probably due to the fact that they're new to the Arkansas market and may have underpriced to begin with. So with that exception thrown out, physician and surgeon insurance rates could have gone as high as 23.2 percent since 2003, according to the document.

The same report said, prior to the law, that companies offering malpractice insurance in the state had increases anywhere from 6.8 percent to 97.5 percent during the period from 1999 through 2002. Filings for increases with the AID were "virtually nonexistent" prior to 1999, the report said.

William Lacy, the Insurance Department's property and casualty division director and author of the report, said that of the five companies writing new policies in the state, only three are actively doing so, and that the other companies listed are merely renewing existing policies for doctors.
Insurance Increases

Recent insurance rate increase history for physicians and suregeons in

 --Rate Increase--
 2003-2004 1999-2002 **

American Physicians Insurance Exchange 37%
C.N.A. 26%
Continental Casualty 26%
First Professional Insurance Co. *
ISO Loss Costs 6.8%
Medical Assurance * 23.2% 97.5%
Medical Mutual of North Carolina 62%
Medical Protective * 22.6% 83%
National Union Fire of Pittsburgh 3.6%
Preferred Professional Inurance Co. * 100%
Professionals Advocate 25%
Reciprocal of America 25.7%
St. Paul Fire and Marine 67.5%
State Volunteer Mutual * 13.6% 76.5%
The Doctors Co. 4% 40.9%
TIG Insurance Co. 16.6%
Truck Insurance Exchange 21.5%

* Writing new polices. ** May reflect multiple increases over the
three-year period.

Source: Arkansas State Insurance Department
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Article Details
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Title Annotation:medical malpractice, Civil Justice Reform Act of 2003
Author:Sparkman, Worth
Publication:Arkansas Business
Geographic Code:1U7AR
Date:Jan 31, 2005
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