No Solution Imminent as Premiums Soar for Specialists Who are Not Doctors


By Winthrop Quigley
Journal Staff Writer
  State legislators hoped last winter that, working together, medical professionals and lawyers could find solutions to what lawmakers called an "escalating" medical malpractice insurance crisis.
    Unless something significant changes in the next week, that hope was in vain.
    Medical practitioners other than physicians had asked the Legislature to enact malpractice insurance reforms that they said would slow price increases and make insurance more available. Certified nurse midwives saw their premiums increase 60 percent in 2004 and a projected increase of 30 percent in 2005 even though only six malpractice claims against certified nurse midwives had resulted in settlement payments in the previous 14 years.
    The Legislature instead passed Senate Memorial 7, which organized a task force of lawyers and medical practitioners with a mandate to find a consensus solution to all practitioners' medical malpractice problems.
   
Lack of consensus
    After a series of meetings beginning in the summer, trial lawyers and the New Mexico Medical Society, which represents physicians, could not agree with insurance proposals offered by representatives of the other practitioners' professional associations, and they offered no malpractice proposals of their own. The physicians argued that improving Medicaid payments to the practitioners would solve the problem by helping them afford malpractice insurance.
    The task force's moderators, Insurance superintendent Eric Serna and state Health Policy Commission director Pat Larragoite, are drafting a report for the Legislature outlining the conflict and will present it next Thursday to the task force for its review.
    "It is not realistic" to expect Gov. Bill Richardson to include reform legislation on his 2006 agenda without consensus from the task force, Serna said.
    The task force did agree that some form of a joint underwriting agreement, called a JUA, for practitioners other than physicians known as allied professionals, or allieds would help solve access to and affordability of medical malpractice insurance, but consensus fell apart when members tried to describe how the JUA would be implemented.
    A JUA is a state-sponsored insurer of last resort. It would provide liability insurance to providers who were unable to obtain affordable coverage from conventional insurance companies. It would be funded by assessments on insurance companies licensed to operate in the state.
   
Malpractice caps
    New Mexico physicians have had little trouble buying medical malpractice insurance since the enactment of malpractice reform legislation in 1976, although the price increases annually. Among other things, the 1976 legislation capped damages a patient could receive from a physician's malpractice, while ensuring that medical bills resulting from malpractice would be paid for life.
    Support for a JUA to cover allied professionals collapsed when the allieds said they, too, needed caps on damages to attract insurance providers and to keep rates affordable.
    At a contentious September meeting, trial lawyers questioned whether the allieds truly face a malpractice insurance crisis and argued that caps on damages awarded by courts do not ensure that affordable insurance will be sold.
    Stephen Durkovich, a plaintiff's lawyer in medical malpractice cases, said physicians obtained such caps because beginning in 1975 there was "absolutely no insurance available for physicians" at any price. For allied practitioners, "insurance does exist," he said. "The extent and the cost is what we want to know" in order to determine if a real crisis exists.
    "I'm frustrated we have to define what a crisis is before we can think about doing something for the people of our state," replied Jeff Dye, president of the New Mexico Hospitals and Health Systems Association. "That's a sad commentary."
   
Allied professionals
    New Mexico has long relied on allied professionals to provide health care, especially in rural areas, to compensate for the state's shortage of physicians. In more than half of the state's hospitals, anesthesia services are provided entirely by nurse anesthetists, said Sharon Hensley, immediate past president of the New Mexico Association of Nurse Anesthetists.
    Certified nurse midwives deliver 32 percent of New Mexico's babies, according to the state chapter of the American College of Nurse Midwives. Licensed midwives, who are trained as midwives but are not nurses, attend about 2 percent of the births in the state.
    The allieds' malpractice problem surfaced in the last legislative session when licensed midwives and certified nurse midwives reported their professional liability insurance costs were soaring, assuming insurance was available at all.
    Nurse midwives have seen their annual premiums reach $18,300, said Suzanne Stalls of the American College of Nurse Midwives. An obstetrician might pay $75,000, but physicians make more money and typically work with higher-risk patients and pay many more claims than do nurse midwives.
   
Insurance costs
    Nurse practitioners who paid $300 in 2002 now pay $1,000 a year, said Tony Esquibel, president of the New Mexico Nurse Practitioners Council. The National College of Midwifery bought a group policy for $160,000. The premium was raised to an unaffordable $1 million last November, said Beth Enson of the Taos-based college.
    When the law does not cap allieds' damages, plaintiffs target allied professionals in lawsuits, which helps drive up allieds' premiums, said Linda Siegle, a lobbyist who represents nurse anesthetists and nurse midwives.
    "There are nurse midwives working with (physicians)," she said. "If they both get sued, then it's the nurse midwife who has $1 million (in malpractice insurance coverage) and the doctor who has the $200,000 (policy)."
    State law caps an insurance company's damages in malpractice cases brought against physicians who qualify for the law's protection to $200,000. To get the law's protection, physicians are also required to pay into a state-sponsored fund used to pay damages. Damages for that fund are capped at $600,000.
    Hospitals and nursing homes face similar exposure, and for hospitals, risks are growing, Dye said. He said 10 of his 13 member organizations have averaged malpractice rate increases of 36.5 percent a year. The other three have seen worse.
   
Personnel shifts
    More and more physicians are leaving private practice to become employees of hospitals, Dye said. The caps they enjoyed in private practice disappear when they become employees, and the hospital is now responsible for the physician's error, he said.
    The answer, Dye said, is allowing hospitals the same kind of caps physicians enjoy under the Medical Malpractice Act.
    That will be very difficult to achieve, said New Mexico Medical Society executive director Randy Marshall. A new malpractice act that contains caps will face fierce opposition in the Legislature, he said.
    If the existing malpractice act were to be amended to offer other practitioners its protection, trial lawyers would demand that the cap be increased to $1.6 million, raising premiums for physicians, Marshall said.
    "Our feeling is we need to address the affordability issue," he said, by boosting Medicaid payments to providers.
    The State Human Services Department has not yet received its Medicaid budget for the next fiscal year, but it has cut provider payments annually for the past three years.
    Even without a consensus report, Siegle said, her clients will be back in Santa Fe looking for malpractice insurance help.