Md. Doctors Frustrated Over Delay in Med-Mal Subsidy Funds

Maryland doctors may not see any medical malpractice insurance rate relief for several months, even though the General Assembly approved an emergency remedy more than four months ago.

A series of delays has prompted finger-pointing between leading Democratic lawmakers and state insurance regulators and caused headaches for Maryland doctors.

Many physicians who expected the state to pitch in and help pay for this year’s higher insurance premiums instead are stuck with paying the full bills themselves. Quarterly bills will be arriving this month.

“There’s extreme frustration,” said Philip Schneider, an orthopedic surgeon in Kensington. “Many of us went ahead and paid the higher premiums with the promise that there would be relief, and it hasn’t happened yet.”

His office of five surgeons has been anticipating a subsidy of more than $51,000, and Schneider said the timing of the aid “makes a huge difference for how we run our practice,” which includes 30 employees.

Legislation the Democrat-led General Assembly passed in December was intended to limit increases in doctors’ medical malpractice rates to 5 percent this year, rather than the 33 percent increase planned by the state’s largest insurance carrier.

Republican Gov. Robert Ehrlich convened an emergency session to address the issue, calling it a crisis, but vetoed the bill that came out of it. He said it did not fix the long-term problem and did nothing to lower malpractice costs in the future. The legislature overrode Ehrlich’s veto in January.

Legislators then reworked the bill in the regular session, changing how subsidies would be delivered to doctors in an effort to make the process run more smoothly. Ehrlich allowed the changes to become law.

Sen. Brian Frosh, D-Montgomery, a legislative leader in the malpractice reform effort, now says the Maryland Insurance Administration has worked “to throw sand in the gears” of efforts to put money in the hands of doctors. That agency is responsible for developing regulations needed to steer the state funds to insurance companies, which in turn pass along subsidies to doctors.

“It looks like they’re looking for excuses not to do it quickly,” Frosh said.

Insurance Commissioner Alfred Redmer strongly denied that assessment. Redmer, who heads the insurance administration, says he has no authority to release the money before July 1, when cash from a new state tax on HMO premiums — approved to pay for the doctors’ relief — will be allocated to the state subsidy fund.

Democratic legislative leaders and the Medical Mutual Liability Society of Maryland, the state’s largest malpractice carrier, both dispute that interpretation.

David Funk, a lawyer for the insurance company, argues that Ehrlich has the budget authority to release the funds earlier, which would allow Medical Mutual to send out lower bills in the batch of mailings going out May 18.

According to Redmer, the insurance company also has the authority to issue lower bills now and be reimbursed the $27 million in subsidies after July 1. Funk said that would “raise an extraordinarily complex financial issue” for the company.

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