Pennsylvania Doctors Lose Malpractice Subsidy

April 2, 2008

A five-year, $1 billion taxpayer subsidy to help Pennsylvania doctors buy medical malpractice insurance lapsed Monday, forcing physicians to pay higher premiums unless Democrats and Republicans break an impasse over expanding a state health insurance program.

Gov. Ed Rendell supports a bill that passed the Democratic-led House on March 17 that would tie the future of the medical malpractice subsidy to approval of a $1 billion expansion of the health insurance program to cover an additional 220,000 adults who cannot afford other coverage.

But Republicans who control the Senate are critical of the health insurance provision, and encouraged the House instead to pass a bill approved by the Senate in December that will extend the medical malpractice subsidy through the end of 2008.

“We expect and hope the House will take up the bill they have and send it to Gov. Rendell so health care providers can have predictability,” Senate Majority Leader Dominic Pileggi, R-Delaware, said in an interview Monday.

The Senate adjourned Monday without acting on the bill sent over by the House.

In the House, Democrats thwarted a move by Republicans to bring the Senate bill to the floor. In addition to extending the medical malpractice subsidy, known as the MCare abatement, that bill would direct $50 million to help hospitals computerize records and institute infection-control practices.

More than 35,000 doctors and other medical professionals originally won the malpractice-insurance subsidy in 2003 when premiums surged by double-digit percentages annually before stabilizing in recent years.

To pay for it, the Legislature raised cigarette taxes by 25 cents per pack and siphoned money from a separate insurance fund fed by surcharges on traffic tickets. However, those funding sources have left a surplus, which would be tapped to help pay for the health insurance expansion.

The subsidy has saved the average primary-care doctor $1,500 a year, while high-risk specialists, including orthopedic surgeons, neurosurgeons and obstetricians, have saved an average of $15,000 a year, said Rendell spokeswoman Amy Kelchner.

First to feel the pinch will be doctors whose bills came due in the past three months, Kelchner said. If legislators reach agreement on an extension, those extra payments can be refunded, she said.

Dr. Theodore A. Christopher, chairman of the Emergency Medical Department at Thomas Jefferson University Hospital in Philadelphia, said the bigger insurance bills will have a devastating effect.

Teaching hospitals will have less money for education and research, while some doctors will leave the state or retire, creating even longer lines at already understaffed emergency rooms.

Still, he noted that emergency physicians agree with the idea of expanding health insurance since the uninsured typically look to emergency rooms for help.

“We’re on the same page” on health insurance, Christopher said. “I think we disagree with how they get there. You can’t put this on the backs of the physicians.”

In debate on the House floor, the chamber’s Republican leader, Sam Smith of Jefferson County, told colleagues that the Rendell administration is putting the state’s medical professionals at risk by tying the two programs together.

Rep. Bill DeWeese, the House Democratic leader from Greene County, responded that the House bill would guarantee the medical malpractice subsidy for another decade, “not a one-year solution that the Senate has foisted upon us.”

Pileggi and other Senate Republicans, however, question whether the legislation to expand the state’s health insurance program will cost far more than the Rendell administration says, and they say its potential effect on the private insurance market has not been studied.

The bill would create the Pennsylvania Access to Basic Care program, covering legal U.S. residents ages 19 to 64 who meet income guidelines and have gone six months without insurance.

The cost of the program is pegged at $1.1 billion by 2012-13, when it is designed to cover 270,000 people through a combination of monthly premiums, federal Medicaid dollars, tobacco settlement money and the medical malpractice insurance fund surplus.

The state’s current insurance program, called adultBasic, covers about 53,000 people, with 80,000 people on the waiting list.

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