Nevada Mutual Insurance Company Rate Change Approved

Nevada Insurance Commissioner Alice A. Molasky-Arman has approved new rating rules for obstetricians and gynecological surgeons for Nevada Mutual Insurance Company (NMIC). The new rules result from Molasky-Arman’s determination that the prior rules used by several insurers were not supported by any credible data.

Molasky-Arman said, “I am pleased to see that NMIC has stepped forward with new rating rules to allow for more deliveries. I believe that the new rules are a positive step toward alleviating the obstetrical services shortage that Nevada, and especially Clark County, is experiencing.”

Under the new NMIC rules, obstetricians that qualified for the 25 percent rate credit under the prior rules will see their rates increase 12 percent at renewal. These obstetricians will be able to increase their number of deliveries to 224 without further penalty. Under the prior rules they would have lost the 25 percent credit at 125 deliveries. Large deductible options and a risk management program are available to help offset the premium increase. Obstetricians performing 125 or more deliveries under the prior rules will see rate decreases ranging from 16 percent for 125 to 175 deliveries up to 33 percent for those performing 176 to 224 deliveries. Those doing 281 to 300 deliveries will see 20 percent rate decreases. The overall rate effect of the approved changes is neutral.

Gynecological surgeons’ rates will be unaffected. To offset the loss of the 25 percent credit for fewer than 125 deliveries, the company has moved gynecological surgery to a lower rate class.

The Medical Liability Association of Nevada (MLAN) initially had a delivery-based tiering rule similar to the prior NMIC rule. MLAN abolished the rule last May at the urging of Governor Kenny Guinn and Molasky-Arman.

The new rates and rules became effective Jan. 15, 2003. The company insures 514 physicians, including 20 obstetricians, of which 18 of these obstetricians practice in Clark County. NMIC was admitted as a new domestic physician-owned mutual company May 3, 2002 in response to the medical liability crisis.