Monday, April 7, 2003 | 11:10 a.m.
CARSON CITY -- The spotlight in Nevada's medical malpractice crisis has always been on doctors and attorneys.
But the party many believe is to blame for the health-care nightmare -- the insurance industry -- was front and center in the debate Friday as Assembly Democrats proposed sweeping insurance reform.
Assembly Majority Leader Barbara Buckley, D-Las Vegas, testified on behalf of Assembly Bill 320 -- a measure that addresses insurance reform for both malpractice and patient coverage.
Much of the bill's malpractice section seems targeted at preventing a repetition of St. Paul Cos.' departure from the state, which left 60 percent of the state's doctors without coverage.
Insurance companies would have to provide 120 days written notice to the state insurance commissioner before leaving the market. The bill also requires the commissioner to reject requested insurance rate hikes to make up for fraud, mismanagement or decisions by the company to insure physicians with multiple claims.
The bill also forces insurance companies to pay for a doctor's defense attorney.
"A physician should not pay their premium to an insurance company only to be abandoned in the litigation process," Buckley said.
Some of the toughest language in the bill deals with health insurers and their relation to doctors. The bill states that failure to comply with the state's managed care law is an unfair business practice and insurers who violate it are subject to revocation of the right to do business in Nevada.
The bill also requires license revocation if an insurer fails to pay 95 percent of its claims within 30 days.
Dr. John Ellerton, a Las Vegas oncologist who ran unsuccessfully for the Assembly last fall, testified that the bill would help doctors get relief from bureaucratic regulations in a now industrialized medical field.
"Decisions once made for rational medical reasons are now made for other reasons," Ellerton said.
Most of Friday's testimony before the Assembly Judiciary Committee, came from two representatives of the Nevada Trial Lawyers Association -- who, while not the subject of this medical malpractice bill, were trying hard to focus attention away from lawyers and onto insurers.
Assemblyman Garn Mabey, R-Las Vegas, a practicing gynecologist, said he liked many aspects of the bill, but took exception to the trial lawyers' testimony about imprudent insurance investments that led to skyrocketing rates.
"They can only invest a small percentage in the stock market," Mabey argued, saying the bulk of insurance investments were in bonds, which rose. "Could it be that they lost money because they had to pay more claims?"
Matt Sharp, president of the trial lawyers association, said that while insurance companies are under state regulation and statute to keep small percentages of their investments in stocks, "those requirements can and are manipulated."
Sharp and Bill Bradley of the trial lawyers association monopolized the hearing with a lengthy Power Point presentation on how insurance works and how -- they said -- the industry is subject to cyclical downturns based on poor performance of the stock market.
The lawyers made only two small references to the bill, but discussed at length a number of Clark County malpractice cases in which insurance companies failed to settle when the doctor and injured patient agreed. Testimony showed massive increases -- up to 80 percent -- in the eventual jury awards compared with the settlement offers.
"The doctor is entitled to get a new attorney," Bradley said. "The insurer is now making a decision to gamble."
Jim Wadhams, a lobbyist representing numerous insurance industry clients, said he sensed the theme of the legislation was "frustration."
But Wadhams stressed that he has never failed to come to the table in malpractice discussions and reminded legislators that he does not represent the St. Paul Cos., which pulled out of the state's malpractice market in early 2002, sparking a lack of coverage for 60 percent of Nevada's doctors.
"That bad actor's out of here," Wadhams said.
Wadhams said St. Paul's will ultimately be addressed by the state's attorney general, who has filed a complaint against the company.
He also argued that 65 percent of a doctor's frustration with declining or delayed reimbursements from patients' insurance won't end because the bill does not cover Medicaid, trusts and other federal insurance.
Wadhams also requested an exemption to the bill for his client, the Nevada Mutual Insurance Co., which has provided coverage for 660 Southern Nevada doctors since its inception in May 2002.
The committee took no action on the bill Friday. Buckley pledged to work with interested parties by this Friday's deadline for bill passage from initial house committees.
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