State Loans for Wyoming Doctors Moves Ahead in Special Session

The Wyoming state Senate offered preliminary support July 13 for state-funded low-interest loans to help doctors struggling to obtain malpractice insurance.

“I think this is a needed interim step … until we can find a real fix,” Sen. Grant Larson, R-Jackson, told colleagues on the second day of the Legislature’s special session on malpractice insurance.

Senate File 1011 would appropriate $8.2 million from the state Budget Reserve Account to offer loans to doctors unable to obtain “tail coverage,” which is meant to handle malpractice claims that don’t surface until after a doctor switches insurance carriers or retires.

Some companies won’t insure a new customer unless he or she pays for tail coverage, which can cost more than $100,000 in one-time fees.

The loans would be repaid at a 2 percent interest rate.

The program was drafted because lawmakers were uncomfortable with direct subsidies to doctors to defray the cost of insurance, an expense that is rising so quickly some providers are curtailing services or moving to other states.

Sen. Charles Scott, R-Casper, unsuccessfully offered an amendment that would have allowed the state to directly insure physicians for tail coverage from that same $8.2 million fund.

“I think we may have to do it or we’re running the risk of the kind of crisis which will force not just a few but a lot of physicians out of the market,” he said.

Larson led the opposition, saying the state does not have a system in place for writing policies or handling claims, nor is there enough money set aside for the state to become an insurer.

“This amendment scares me to death,” he said. “We are going into the insurance business in the back door.”

Sen. John Schiffer, R-Kaycee, agreed.

“We’re not set up to do that as a state,” he said. “We don’t have the people to do it.”

Sen. John Barrasso, R-Casper, successfully sponsored an amendment that would limit loans to doctors covered by insurance companies with a B-minus grade or higher by AM Best, a rating agency for the industry.

Barrasso offered the amendment as a way to help protect the state, but some senators expressed concern that fewer doctors would be eligible for loans if their insurers’ ratings fall below the B-minus level.

SF1011 was forwarded to the second of three readings, which will occur July 14. The House debated its version of the measure, HB1011, later in the day.

The Senate also advanced a measure increasing the state Medicaid reimbursement rate for obstetricians to 100 percent of the provider’s usual and customary charges.

Schiffer cautioned, “Once you start paying 100 percent, it is very difficult to back off of that figure.” But he added, it may be worth the price.

“That is one of the ways we can improve both the accessibility and affordability of health care in this state,” he said.

At the start of the work day, 14 bills were still alive to address what many legislators and health care representatives believe is a crisis due to a worsening shortage of doctors in Wyoming.

One of the marquee bills, a proposed constitutional amendment that would allow the Legislature to cap non-economic damage awards in malpractice suits, will be debated again July 14.

The special session was the first gathering since 1997 of the Legislature in a stand-alone convening separate from a budget or general session.

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