Missouri Makes Push to Rein In

A recently released study from the National Association of Insurance Commissioners (NAIC) points out that Missouri med-mal insurers paid out much less in claims in 2004 to state doctors, yet premiums continue to rise-growing 8.4 percent as direct losses
fell some 26 percent.

“It does seem that
the medical malpractice market is improving in the state of Missouri,” said Matt Barton, communications director for the Missouri Insurance Department. “We are still in favor of litigation reform, though, and have also been proactive in a joint committee studying a stabilization fund idea that has been successful in the state of Kansas.”

Missouri Republicans and business groups claim that tort reform cuts outrageous jury awards and puts a dent in the skyrocketing malpractice insurance premiums.

But Democrats blame insurers for raising malpractice premiums to pay for their bad investments in the stock and bond markets. Many also blame insurers for perpetuating a myth about how placing caps on jury awards for insurance claims would end up in lower malpractice premiums.

“Yes, Missouri has been labeled a ‘crisis’ state in
several studies over the past few years,” Barton commented. “The crisis began when doctors left the state for states with laws that are more friendly to healthcare providers.”

A January 2002 court ruling-the Scott decision-had a major impact on the state’s med-mal market.

Before the decision, there was a limit of $557,000 for pain and suffering in each malpractice case, regardless of the number of doctors or hospitals involved in the litigation. But the Scott ruling said that limit applied to each defendant; for example, a judgment brought against four doctors jumped from a possible $557,000 to $2.2 million.

In March of this year, Missouri Gov. Matt Blunt signed H.B. 393, a major bill designed to improve the business climate by reforming the state’s tort laws. Blunt’s predecessor, Gov. Bob Holden, twice vetoed tort reform legislation. Last year the veto override fell short in the House, which reportedly allowed the medical liability crisis to linger yet another year.

Major provisions of the tort reform bill include:

Non-economic damages capped at $350,000. The prior cap had risen to over $579,000 due to an inflation index. The current cap is not indexed. The bill also overturns the Scott decision (see above), which allowed multiple caps.

Punitive damages capped at $500,000 or five times actual damages, whichever is greater.

A defendant must be at least 51 percent at fault before being held jointly and severally liable, so defendants who are minimally at
fault are only accountable for their share of

damages.

The venue statute was tightened dramatically. Generally, venue will be in the county in which the injury occurred.

Appeal bonds are limited to a maximum of $50 million. The law goes into effect Aug. 28.

With reform in place, the door is open for more insurers offering med-mal coverage to enter the state. Barton reported that any company with a property/casualty license, and with B2 authority for liability can write med-mal in the state without meeting any further licensure requirements, as per RSMo 379.010.1.

“The only way we can track which companies are in med-mal is to look at premiums on the financial statement,” he said. “Unfortunately, this won’t tell us which companies are actively accepting new business versus just renewing existing business.”

With reported claims down but premiums rising, Barton added that Missouri’s insurance department is doing much to help make conditions better for doctors and patients in the state. “The department is doing everything in its power to support measures that help to make Missouri a favorable place for healthcare providers to practice,” he said.

Topics Missouri