Maryland Pursues Med-Mal Insurers and Special Legislative Session

Maryland Insurance Commissioner Alfred W. Redmer, Jr. has moved to end what his agency says is a comprehensive scheme of medical malpractice fraud aimed, particularly, at women’s clinics.

Meanwhile, the state’s political leaders continued to seek a solution to the rising cost of malpractice coverage after the state’s largest malpractice insurer, Medical Mutual Liability Insurance Society of Maryland, asked for an average 41 percent increase in premiums for next year.

Redmer issued a cease and desist order prohibiting Unimed Insurance Company; Professional Liability Insurance Company, LTD; Ledee and Associates, LLC; Professional Liability Insurance Corporation; PLIC Claims Management, Inc; Crowne Global Group, LTD, Medical Risk Associates, RPG, LTD; and Physical Malpractice Analysts, INC, and individuals associated with those companies from conducting insurance business or acting as insurance producers in Maryland.

“Unfortunately, an unknown number of doctors and clinics think they have purchased approved professional liability insurance from legitimate carriers. They have no idea that they are victims of fraud,” Redmer commented.

The order is based on his findings that the companies, which are purported to be based in Bermuda, are not organized or licensed as insurance companies and have defrauded Maryland health care providers by selling unapproved contracts for malpractice coverage.

The insurers being pursued by Redmer have also run into trouble in others states. Eight other states, including Pennsylvania, Florida, Texas and Illinois, have issued cease and desist orders against them.

On July 20, the Bermuda Monetary Authority posted warnings that the companies are not licensed there as claimed.

The MIA’s fraud division and agent enforcement sections, working with the state attorney general, the state police, and law enforcement officials and insurance regulators from other states, uncovered a history of fraud by these companies and their principals: William A. Ledee, HI; Ignatius Angelo DeBlasi; James Reynolds; Matthew Reed; Mishima Murasaki; Bertha Louise Ledee; Judy Frese; Jennifer Anderson (aka Brook Harris); Robert Edward Ledee; Suzanne Suhrie; Charles Daly, MD; Laurie/Lori (last name unknown) and Elizabeth (last name unknown).

MIA maintains that since at least January, 2003, these unauthorized companies have sold medical malpractice insurance to Maryland-based, women’s health clinics and their attending physicians. Further, MIA charges, since at least January, 2004, these same companies have sold medical malpractice insurance to plastic surgeons. The companies and their principals have collected substantial fees and premiums, according to state officials.

MIA officials are hoping those with information about the companies will contact them.

Legislative Session
The issue of medical malpractice costs remained on the political front burner. Gov. Gov. Robert L. Ehrlich Jr. (R) and Senate President Thomas V. Mike Miller Jr. (D-Calvert) agreed that a special legislative session should be called on the issue, although each wants to consider a different proposal.

Miller (D-Calvert) said in an interview with the Washington Post that he would like to create a state fund to help private insurers pay for jury awards and settlements in medical malpractice cases once they exhaust their resources. A $50 million fund, Miller said, would allow insurers to effectively freeze at current levels the premiums they are now charging doctors.

“There really is no need for a rate increase whatsoever,” Miller said. “This is a problem that is solvable immediately with very little effort.”

Miller declined to say how he would pay for his proposal and said several other details remained to be worked out. But his plan promised to shake up a politically volatile debate dominated thus far by Ehrlich Jr.

Ehrlich has called for curbing payouts to injured patients and has set up a task force to look at other possible solutions, including limiting attorney’s fees. In recent weeks, he has traveled the state, seeking to enlist doctors’ help in pressing legislators for reforms.

Miller argued that none of what Ehrlich has proposed would have an immediate effect on premiums. Most experts agree that changes in the way victims are compensated, for example, could take a few years to affect rates.

“The governor continues to play right-wing Republican politics with this issue,” Miller said. “It’s politics. It’s not relief.”

Ehrlich said he is “not opposed to the concept” of a state insurance fund, but added: “The devil’s in the details.” Ehrlich has said that taxpayers should not have to bear the cost.

Broader Reforms
Donald J. Hogan Jr., a policy aide with Ehrlich’s malpractice task force, said it would be a mistake to set up a fund without also enacting broader reforms. Republicans have blamed trial lawyers for pushing malpractice payouts to unreasonable amounts.

Ehrlich was cool to a similar pitch for a state fund made in June by representatives of three groups pitted against one another in the malpractice debate — doctors, trial lawyers and insurance companies.Under that plan, the state would have paid the difference between the amount raised by insurers through premiums and their payouts for jury awards and settlements.

Advocates of such a fund have floated several possible ways to pay for it, including a surcharge on motorists with drunken-driving convictions or a premium tax on HMOs.

Miller steadfastly declined to say how he would fund his plan, allowing only that the cost would not be borne by taxpayers generally. He predicted that Ehrlich would eventually come around to the idea.

House Speaker Michael E. Busch (D-Anne Arundel) has said he is open to the idea of a temporary state insurance fund. Busch, however, has also said it could be a mistake to establish a fund without making other reforms to curb medical malpractice rates in the future. He has suggested looking at ways to better police doctors, for example.

Associated Press reports were used in this story. Copyright 2004 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Topics Carriers Fraud Maryland Professional Liability