Increasing liability premiums dim post-pandemic outlook

As health care professionals look ahead to post-pandemic care, rising liability insurance premiums create an uncertain future and dimming hopes of a swift recovery.

After holding steady for over a decade, new analysis by the American Medical Association (AMA) is finding a striking increase in the number of premiums that increased significantly year over year.

Between 2010 and 2018, the share of premiums that increased stayed within a range of 12 to 17%. This share nearly doubled in 2019, to 26.5%, and in 2020 rose again to 31.1%. Fourteen states had premium increases of 10% or more, with Kentucky and South Carolina reporting that nearly 30% of all premiums in their respective states rose by double digits.

The AMA analysis on 2020 figures would have been reported too early to be affected by COVID-19.

“Increases in medical liability premiums compound the economic stress on medical practices as the COVID-19 pandemic resulted in significant reductions to patient volume and revenue, and higher expenses for scarce medical supplies,” said AMA President Susan R. Bailey, MD. “Practice revenue has not fully recovered as the pandemic has stretched on and a protracted upward trend in medical liability premiums will threaten the viability of many practices that already face a difficult road to recovery.”

Dr. Bailey expressed concerns that a run-up in liability rates would affect a physician’s ability to continue practicing and for patients to have equitable access to care.

“This concern is particularly pressing given the negative impact that the COVID-19 pandemic has had on access and practice viability, as many physicians have had to suspend patient visits or elective procedures, and some have had to close their practices.”

The AMA has long championed the need for medical liability reform and recently updated its resource guide, Medical Liability Reform NOW!, with up-to-date case studies, legislative efforts, and public opinion on the need for federal reform.

To read the analysis on rising state and specialty liability rates and AMA’s continuing work on enacting liability reforms, click here.

State by state updates on pandemic protections

In the absence of federal COVID-19 pandemic liability protections for providers and facilities, a state-by-state approach has led to a mix of executive orders and legislation that are beginning to sunset.

This ranges from sweeping coverage in Alabama to more narrow protections related to school reopenings in Oregon.

With vaccine distribution increasing, legislators in about 30 states have bills under consideration to either extend or sunset their liability provisions — depending upon which way the political winds blow.

One of the hardest-hit states early on, New York, has now repealed the liability legislation it enacted in early 2020. New Jersey lawmakers are considering walking back liability protections granted to hospital systems and long-term care facilities.

Conversely, Florida and Indiana are taking steps to raise requirements for filing a COVID-19 liability lawsuit — which PoliticoPro reports to be in the thousands, with nearly 300 of those alleging medical negligence related to the virus.

In Florida, a plaintiff bringing forth a lawsuit must have sufficient detail to support every element of the claim and must also have clear evidence of gross negligence or that the provider was engaged in intentional misconduct.

Indiana legislators added similar language to a bill that now heads to the Governor’s desk for signature. The bill, HB 1002, enacts a liability shield for nursing homes, hospitals and other medical providers from lawsuits unless gross negligence or willful misconduct can be proven.

As the Biden Administration priorities move past COVID-19 stimulus and support in the Congress remains uncertain, states will continue to own their destinies on pandemic protections for health care providers and facilities.

Illinois physicians face punitive proposal on prejudgment interest

A punitive proposal requiring physicians to pay prejudgment interest on pending medical liability cases in Illinois is returning to the governor’s desk.

After Governor J.B. Pritzker vetoed a bill that would have required physicians to pay 9% annually in prejudgment interest in medical liability cases, a new bill — SB 72, mandating 6% interest — is now under consideration.

The interest would accrue from the time a lawsuit was filed to the time of the judgment and could increase medical liability awards by tens or hundreds of thousands of dollars, given the length of time it takes for lawsuits to come to a resolution.

“It’s highly likely that the pandemic’s negative effect on the efficient resolution of medical liability and other civil cases will stretch well into the future,” wrote AMA Executive Vice President and CEO James L. Madara, MD, in a letter to Governor Pritzker. “During all this time, the interest adds up and the financial burden mounts. The consequence is that practicing in Illinois will become more difficult financially and less attractive, which may threaten the timely access to care that Illinoisans deserve.”

Illinois patients face the most dramatic impacts of such a costly proposal, as their providers shift practice patterns to avoid exposure to liability lawsuits. The bill will also have an economic effect as the state seeks a post-pandemic recovery, stifling the nearly 10% of the Illinois economy that can be attributed to the health care sector.

To read more about how SB 72 could affect access to care and economic conditions in Illinois, click here.

HCLA announces 2021 Board of Directors, Executive Officers

Following its virtual annual meeting on legislative priorities and future impacts on medical liability, the HCLA announced its 2021 board of directors and executive committee members.

As Sustaining Members of the HCLA, board seats were granted to representatives from the American Association of Neurological Surgeons/Congress of Neurological Surgeons, the American Association of Orthopaedic Surgeons, the American Medical Association, the Cooperative of American Physicians, MLMIC Insurance, the Medical Professional Liability (MPL) Association, NORCAL Group, and Physicians Insurance – A Mutual Company.

The American College of Surgeons will serve on the board as a Contributing Member; and the American Osteopathic Association as a Regular Member.

The board of directors elected the following organizations to name representatives to serve as officers and executive committee members for the year:

  • MPL Association – Mike Stinson, chair
  • American Association of Neurological Surgeons – Katie Orrico, vice-chair
  • American Association of Orthopaedic Surgeons –Madeline Kroll, secretary
  • American Medical Association – George Cox, at-large executive committee member

“As we look to the post-pandemic recovery of our health care systems and the impact COVID-19 will continue to have on delivery and access to care, we remain focused on our strategy to enact needed medical protections during public health emergencies and disasters, in addition to comprehensive medical liability reforms. We will also remain attuned to emerging issues that providers could face in the years ahead,” said HCLA Chair Mike Stinson.

The HCLA will also continue to work on its key legislative, public affairs and grassroots initiatives through its focus committees.