August 9, 2005

Medicaid Reform Hearings Canceled
Citing scheduling conflicts, the legislative Medicaid Reform Commission has canceled its hearings in Springfield that were to be held Aug. 16 and 17. The next set of hearings for the commission will be Aug. 31 and Sept. 1 in St. Louis.

Committee Studies Medical Malpractice Insurance Issues
A Missouri legislative committee appointed to study health care stabilization funds held hearings in Excelsior Springs and Topeka, Kan., this week. Health care stabilization funds are state or quasi-state insurance plans that provide coverage for some, but not all, of the medical malpractice liability risk of physicians and other health providers. The committee will develop recommendations for the 2006 session of the Missouri General Assembly.

In recent years, Missouri legislators have considered bills to create a stabilization fund modeled after a Kansas program that has been operating since 1976. Under the proposed legislation, all providers would be required to purchase coverage from a fund offering a band of coverage for losses between $200,000 and $800,000 per claim. Private insurance would be used to cover losses less than or exceeding these coverage limits. Bill proponents argue the Kansas program has been successful in maintaining stable and lower medical liability insurance premiums for physicians.

At the Excelsior Springs hearing, most of the testimony focused on the need for affordable medical malpractice liability insurance and the operation and implications of the Kansas health care stabilization fund.

• Hospital and nursing home executives and several physicians told the committee that escalating medical malpractice premiums have made it difficult to recruit and retain physicians in western Missouri. They said malpractice costs have hurt access to care and have prevented necessary capital and technology investments for health care facilities.

• A physician on the board of a Missouri provided-sponsored malpractice insurer testified that health care stabilization funds have not been consistently successful in the states with these funds. As a growing number of malpractice insurers enter the Missouri market, he suggested a health care stabilization fund may not improve access to affordable coverage significantly.

• Several Kansas City-area defense attorneys spoke favorably about their experiences with the Kansas malpractice liability insurance system. They noted there is mandatory mediation of medical malpractice cases in Kansas. They also reiterated the importance of ensuring that medical malpractice insurers are solvent.

• A plaintiff’s attorney speaking on behalf of a consumer advocacy group cautioned limits of mandatory medical malpractice coverage are too low under the Kansas plan. He also noted various procedural requirements of the Kansas plan should be revised if a Missouri counterpart is developed.

• Several witnesses commented on the need for legislation to expand the Missouri Department of Insurance’s authority to regulate medical malpractice liability premiums and insurer notification practices. In answering the committee’s questions, DOI staff expressed support for laws giving the agency access to more specific data regarding insurer premiums and underwriting standards.

The hearing in Topeka was designed to review the operational details of the Kansas health care stabilization fund program. Before an extended question-and-answer session with committee members, fund administrators presented information about the program. Key points and discussion topics included the following.

• Even with recent legislative changes to Missouri’s tort liability laws, there are important differences in tort liability standards between Kansas and Missouri.

• The Kansas Health Care Stabilization Fund operates with a small staff, administrative expenses of 3 percent or less and no state funding. It is governed by an independent board representing covered providers.

• Based on their tenure with the fund, practitioners who stop providing services because of retirement, relocation or disability qualify for “tail” coverage of potential future liabilities without an additional premium.
  
• Although data collected by the fund is subject to disclosure under the Kansas public records law, it is rarely requested.

• Practitioners covered by the fund who provide treatment in Missouri pay an additional surcharge of 20 percent to reflect some, but not all, of the greater potential liability.

The committee also heard testimony from the Kansas Medical Society and one of the largest medical malpractice liability insurers in Kansas. Both spoke favorably regarding the Kansas program as it has evolved throughout the past 30 years.

The committee’s next meeting is scheduled Aug. 17 in Springfield.

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