Del. Nixes Medical Malpractice Subsidies for High Risk Doctors

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A Delaware House committee has tabled a bill that would allow the state to use a portion of the Delaware Blue Cross system’s excess reserves to subsidize malpractice insurance premiums for doctors in high-risk specialties.

The bill, which passed the Senate in June, was tabled by the Economic Development, Banking and Insurance Committee after critics said it failed to address what they consider to be the more important issue of tort reform.

“This bill is not addressing the elephant in the room,” said Dr. Janice Tildon-Burton, an obstetrician-gynecologist and president of the Medical Society of Delaware.

The bill, championed by Insurance Commissioner Matthew Denn, would establish a malpractice premium relief fund to help OB-GYNs and other doctors pay their malpractice premiums, which can cost tens of thousands of dollars a year, even for physicians with no claims against them.

The fund would be financed annually with a payment from Blue Cross Blue Shield of Delaware of 4 percent of its excess reserves. BCBSD currently has about $110 million in reserves, representing an excess of about $33 million, Denn said.

Denn said some OB-GYNs in Kent and Sussex counties are considering quitting their practices because of soaring insurance premiums. An exodus of doctors would make it more difficult for pregnant women to receive adequate care, even as Delaware struggles to reduce its high infant mortality rate, Denn noted.

“We view it as a real public health issue,” he told lawmakers.

But critics, including some committee members, said the real solution to high malpractice premiums lies with tort reform, including caps on malpractice jury awards.

“This is just putting a Band-Aid on it,” said Rep. Gerald Hocker, R-Ocean View.

William Kirk III, vice president and general counsel of Blue Cross Blue Shield of Delaware, said the bill unfairly targets his organization, which competes with other health insurers.

“We’re not tasked with fulfilling a social mission,” he added.

Denn noted that Blue Cross receives state tax breaks worth about $5 million annually that other health insurers do not, and still would be allowed to keep 96 percent of its excess reserves if the legislation is approved.

Under the provisions of the bill, a three-member committee appointed by the governor and including at least one licensed doctor would decide how to allocate the subsidies, and to whom.

Dr. Robert Hartmann, a Dover obstetrician-gynecologist, told the committee that while tort reform is the ultimate goal, the Senate bill was an important first step.

Committee members were not convinced, however, and voted to table the bill with no discussion.

“I think that they thought they can solve the issue with caps, and I don’t think you can solve this particular issue with caps, at least not at this time,” said Rep. Helene Keeley, D-Wilmington, the lone dissenter.