With a New Year, New Uncertainty For State's Doctors

These reforms will take many months or years to bring relief to health care providers. The anti-venue shopping provisions, for example, only apply to actions filed after Dec. 15, 2002. All lawsuits currently pending, or filed before Dec. 16, 2002, will be subject to the much looser venue rules, and that means that health care providers may be subject to Philadelphia jury awards for years to come. For example, earlier this month, in the case of Sanzick v. Abington Memorial Hospital, PICS Case No. 02-1709 (C.P. Philadelphia Nov. 2, 2002) Kafrissen, J. (4 pages), Philadelphia was held to be a proper venue for an action arising from treatment rendered in Montgomery County based on Abington Hospital’s contacts with the city.





















Likewise, the statute of repose only effects causes of action arising on or after March 20, 2002, and health care providers will therefore remain susceptible to an essentially unlimited statute of limitations, under the discovery rule, for negligence that is alleged to have occurred prior to March 20, 2002.

In the meantime, securing commercial coverage is a formidable task, and malpractice premiums continue to soar. For instance, PMSLIC, the largest writer of medical professional liability coverage in Pennsylvania, has tightened its underwriting requirements, ceased offering occurrence based coverage, and requested a 59 percent rate increase for 2003.

Many providers who cannot obtain commercial insurance, including physicians who have had no claims filed against them, are being forced to secure coverage with Pennsylvania’s so-called insurer of last resort, the Professional Liability Joint Underwriting Association (JUA). The JUA’s rates, however, are generally substantially higher than commercial insurance rates, and, in some cases, the JUA rates are multiples of the commercial rates. Additionally, the Pennsylvania Insurance Department recently approved a 37 percent increase in the JUA rates for 2003.

On November 1, 2002, the Pennsylvania Department of Insurance announced that, at the request of Governor Schweiker, it had approved a 15 percent discount for JUA policies issued to physicians who have not had any malpractice claims filed against them. As noted above, however, the 15 percent discount on the JUA rates comes on the heels of a much larger increase to those rates. As a result, even claims-free physicians can expect a net premium increase of over 16 percent.

CROSSING STATE LINES

Effective Oct. 1, 2002, the JUA also carved back the coverage afforded under its policies, and coverage is now only available for services provided in Pennsylvania. Therefore, physicians whose practices cross state lines will be required to secure other coverage for their out of state activities.

A new surprise awaits physicians who practice primarily out of state, but whose activities in Pennsylvania represent more than 20 percent of their health care businesses or practices. Effective on January 1, 2003, these physicians will be required to participate in the MCARE Fund and will be assessed a MCARE Fund surcharge accordingly. This is likely to create coverage problems for many physicians as insurers are desperately trying to stay out Philadelphia County, and avoid being forced to interact with the MCARE Fund. As a result, out of state insurance carriers may decide to exclude coverage for Pennsylvania activities, and effectively force physicians to purchase separate coverage, likely from the JUA, for their Pennsylvania based activities.

On Nov. 1, the MCARE Fund published its notice of the 2003 MCARE Fund Assessment. The 2003 assessment will be 43 percent of the applicable “prevailing primary premium,” for each health care provider. The “prevailing primary premium” is based on the schedule of occurrence rates approved by the Pennsylvania Department of Insurance for the JUA. This compares with an assessment, under the former CAT Fund, of 50 percent for 2002. However, as noted earlier, the JUA rates will increase 37 percent in 2003. Therefore, the average 2003 assessment is approximately 18 percent higher than the average 2002 assessment.

EXODUS CONTINUES