Board OKs medical funds

Wednesday, June 12, 2002 | 9:49 a.m.

CARSON CITY -- The state Board of Examiners has recommended an emergency allocation of $388,108 to help pay the rising cost of medical malpractice insurance for the doctors and interns at the University of Nevada School of Medicine, thus averting a crisis.

Acting Dean Stephen McFarlane said the school Thursday selected Doctors Company of California to carry the insurance, which will cost about $2 million for coverage of the 250 doctors and 150 interns annually.

McFarlane told the examiners board the school has a "very good record" in avoiding malpractice suits but it lost its carrier when St. Paul Cos. decided to pull out of the business nationally.

The current premium of $1.2 million will rise to $2 million. The state will pay 46 percent -- or $388,108 -- of the extra $800,000 and the hospitals will pick up most of the rest of the higher premium.

The doctors at the medical school are at the hospitals working with the interns.

Doctors Company will provide "tail" coverage for the physicians, meaning that past cases of malpractices are covered, McFarlane said. He said St. Paul Cos. wanted $8.5 million to provide the tail coverage.

Doctors Company will also allow additional physicians to be covered, waiving up to $200,000 in premiums.

McFarlane said that extra coverage was one of the factors in the decision to go with Doctors Company. He said its bid was $4,000 higher than the lowest bidders but other factors were taken into account in awarding the contract.

The recommendation of the examiners board goes to the Legislative Interim Finance Committee, which meets June 18 to take final action. The money will come from proceeds of the estate tax.

State Budget Director Perry Comeaux estimated there was $90 million in the estate tax fund. Congress has decided to phase out the estate tax, so the state's universities and the public schools will be losing an important source of revenue.

McFarlane told the examiners board, whose chairman is Gov. Kenny Guinn, that some of the recent actions by the Guinn administration have led to more insurance companies coming into the state to offer medical malpractice insurance.

And this competition has led to lower prices than originally quoted, McFarlane said.

McFarlane said the doctors and interns must have coverage by June 19-20.

The examiners board also recommended an extra $285,392 be allocated to the state Division of Insurance to hire five new employees to work in medical malpractice and construction defects insurance.

Other recommendations made for emergency allocations:

$935,977 for the Department of Corrections to take care of an estimated shortfall in the medical budget of the prison.

$378,665 for the state Department of Motor Vehicles for the expense of its 1-800 telephone exchanges, which are getting more use than expected.

$194,000 for the Supreme Court to make up for a shortfall in administrative assessments collected by the court and other agencies.