Insurance chief says medical law needs more time

Wednesday, March 5, 2003 | 11:17 a.m.

CARSON CITY -- State Insurance Commissioner Alice Molasky-Arman said today it was a "media myth" that the present medical malpractice law was not working.

She told the Senate Judiciary Committee there has not been enough time to weigh effects of the law that became effective last October.

The committee held its second day of hearings on an initiative petition sought by the doctors to tighten the present law to limit awards for pain and suffering further and the reduce attorney fees.

Molasky-Arman said it has "been frustrating" that rates have not come down for doctors but she added "We have seen some stabilization of rate requests."

She announced also that her office has approved new rates for American Physicians Assurance Corporation that covers 145 physicians including 39 obstetricians, all of them in Las Vegas.

She said APAC will use new rules in setting rates for obstetricians.

Obstetricians that performed fewer than 125 deliveries and qualified for the lowest rate under the prior rates and rules would see their premium increase 33 percent at renewal under the new rates and rules.

She said because the new rates and rules will result in a significant rate increase for these obstetricians, APAC has agreed to allow its current policyholders to continue to renew under the old rates and rules.

Molasky-Arman said under the new rate structure, obstetricians would be able to increase the number of deliveries from 125 to 224 without further penalty.

An obstetrician performing 125 or more deliveries under the prior rules will see rate decreases. Those will range from less than 1 percent for 125 to 175 deliveries up to 20 percent for 176 to 224 deliveries.

An obstetrician currently doing 281 to 300 deliveries a year will see a 5 percent rate decrease. It was immediately unclear what the decrease would be for doctors who deliver between 225 and 280 babies.

Molasky-Arman said the new rules "are a further step toward alleviating the obstetrical services shortage that Nevada, and especially Clark County experiencing."

In testimony about rates, Dr. Robert Shreck of Las Vegas testified that California, that has a law similar to the initiative petition, has experienced a 126 percent increase in malpractice premiums while nationwide premiums have risen 505.

Sen. Terry Care, D-Las Vegas, questioned whether any insurance company doing business in Nevada would reduce rates if the Legislature passed the initiative petition or a similar Senate Bill 72.

Scott Craigie, a lobbyist for Keep Our Doctors in Nevada, said Nevada Mutual Insurance Company has suggested it would lower rates if the changes were adopted in the initiative petition.

James Wadhams, representing Nevada Mutual, said the present law was a "significant tort reform." But he said insurance companies must see what happens in the courts before lowering rates.

He said it took 10 years in California before the courts ruled on the constitutionality of its law.

"Nobody can be certain until the courts rule," said Wadhams referring to any rate relief.

Nevada Mutual was formed by doctors with the help of hospitals and now covers 650 physicians in Nevada.

He said the difficult part of forming a new insurance company was to produce the $5 million to $6 million capitalization that is needed to get a state certificate. He said the state insurance commissioner's office required the new company to go through all the hoops but did accelerate its consideration of the application.

The company was licensed in May 2002.