The Maryland House and Senate overrode Gov. Robert Ehrlich’s veto of medical malpractice bill that includes a 2 percent premium tax on HMOs.
The $64 million estimated revenues from the tax in the first year will be used to help lower premiums for doctors and to increase their reimbursements for treating Medicaid patients.
Ehrlich vetoed the bill because he opposed the tax and because he said it was an “incomplete and inadequate” tort reform measure.
While Republicans in Annapolis sided with Ehrlich on the vote, Democrats managed to get the necessary 85 votes to override. In the Senate, the override passed 31-15.
“It’s tort reform light and a tax on working families,” Ehrlich said upon vetoing the bill. “It’s a very small step proceeding in the right direction.”
Democrats said the measure responds to the immediate crisis by giving doctors some premium relief and helps limit increases for the next four years.
All insurance companies except HMOs already pay a 2 percent premium tax, and Democratic legislative leaders said repealing the exemption would provide equal treatment for all insurers.
Groups representing insurers, neurosurgeons and orthopedists backed Ehrlich in his stand, but the Maryland State Medical Association and the Maryland Hospital Association asked the legislature to override the veto.
The bill caps any premium increases for this year at 5 percent. It also freezes payments for “pain and suffering” at $650,000 for three years and reduces the cap when a death occurs from $1.6 million to $812,500.
The new law also requires doctors who testify in malpractice suits to be familiar with the specialty of the doctor they testify against, encourages settlement of disputes by mediation, strengthens regulations aimed at reducing the number of medical errors and creates a people’s counsel to represent citizens before the Maryland Insurance Administration.
It also prohibits an apology or expression of regret by a doctor from being used as evidence in a malpractice suit.
Ehrlich wanted to reduce the cap to $500,000 for pain and suffering, limit fees paid to lawyers and allow malpractice awards to be paid out over a number of years, rather than paying the award up front.
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