Conn. AG Blasts Insurance Department Over Med-Mal Rates; Seeks New Hearing and Prior Approval Law

February 28, 2005

Connecticut Attorney General Richard Blumenthal has again blasted state insurance officials and urged the insurance department to call a public hearing into a controversial 89.6 percent medical malpractice insurance rate hike. Blumenthal also called for the state to require prior approval of any future malpractice insurance rates changes.

Blumenthal offered his criticisms at a public informational hearing into medical malpractice markets, rate setting procedures and medical access concerns last Friday, Feb. 25. This hearing was itself a response to criticisms of the insurance department’s granting of the 89.6 percent rate increase sought by GE Medical Protective Company (MedPro) last year.

Blumenthal insisted that Insurance Commissioner Susan Cogswell has the authority to call a hearing on the rate hike but Cogswell has indicated that the MedPro rate increase has been reviewed twice by actuaries and will not be revisited.

“Active, aggressive, critical scrutiny of this extraordinary rate increase is necessary — now, not at some future point after devastating damage is done,” testified Blumenthal.

“The Department of Insurance has a duty to challenge assumptions and ask tough questions,” Blumenthal insisted.

Last month Governor M. Jodi Rell asked the Commissioners of the Departments of Public Health and Insurance and the Office of Health Care Access to put together the hearing focusing on issues ranging from rate review by the insurance department to access to health care. But the hearing was not designed to specifically review the MedPro filing.

Rell’s office announced the hearing on Feb. 22, just days before its scheduled opening.

The controversy has been swirling since last April, when the department’s actuaries found no basis for blocking MedPro filing. The Connecticut Trial Lawyers Association, joined by two consumer groups and an individual doctor, asked Cogswell to halt the increase and review what they maintain is an “excessive” and “unconscionable” price increase.

Cogswell agreed to hire an independent actuary to take a second look at the 89.6 percent rate filing. According to the department, that outside analysis confirmed its own earlier assessment that it was not excessive.

Blumenthal said the episode points out a need for the state to adopt a system of prior approval of rates. “As a condition for approval, there must be searching scrutiny, and an opportunity for the public to participate in providing information and raising questions,” he said.

The attorney general noted that state lawmakers are looking into medical malpractice reforms, but warned that those efforts could be wasted. “Reform will be ineffective unless the state also scrutinizes specific rate requests and demands evidence to establish that they are fair and equitable, and stop them if they are not,” he maintained.

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