Ohio Governor Signs Med-Mal Stabilization Bill

April 13, 2004

Calling the ongoing escalation in medical malpractice insurance rates “a threat to doctors and their patients,” Ohio Governor Bob Taft on Monday signed House Bill 282 authorizing establishment of a new Medical Liability Underwriting Association. Taft also called for additional measures to stabilize Ohio’s volatile medical malpractice insurance market through a five-point plan.

“We are taking action to address the sharp increase in medical malpractice insurance costs faced by doctors throughout the state,” Taft said. “Rising insurance rates threaten to drive more and more doctors away from practicing medicine and ultimately, increase the costs of everyone’s health care,” said Taft.

Insurance Director Ann Womer Benjamin and Representative Larry Flowers (R-Canal Winchester) joined Taft as he signed HB 282 at Grant Medical Center in Columbus. Spearheaded by the Department of Insurance and sponsored by Flowers, the bill passed the House and Senate unanimously earlier this year.

The legislation authorizes the Insurance Director to establish a new Medical Liability Underwriting Association (MLUA) if the market worsens. The MLUA would write primary insurance coverage for doctors unable to find medical liability coverage.

The law provides for the transfer of $12 million from the Ohio Joint Underwriting Association (JUA), a 1975 statutorily created medical malpractice insurance company, which is being terminated by law. The money could be used to fund the MLUA or other initiatives decided by the General Assembly. The Ohio Medical Malpractice Commission established under Ohio’s medical malpractice tort reform legislation, Senate Bill 281, has also issued its Interim Report, which endorses the concepts of a patient compensation fund and a medical screening process along with other measures, which may require funding.

In addition to HB 282, Taft’s five-point plan includes:

· Passage of Senate Bill 187 that requires medical liability insurers to provide 60 days notice of cancellations or rate increases by policyholders and provide 120 days notice to the Ohio Department of Insurance if an insurer intends to stop coverage of a specialty or geographic area.

· Legislation to allow doctors to form self-insurance entities in Ohio to better meet their needs.

· Legislation enacting the Department of Insurance and Medical Malpractice Commission’s recommendation for a data reporting statute.

· Supreme Court and General Assembly action to establish a process to screen certain medical malpractice claims.

· Legislation that creates and funds a patient compensation fund at the earliest possible date.

“The Department is appreciative of the Governor’s support and the General Assembly’s quick passage of Representative Flowers’ legislation,” Womer Benjamin said. “The new law empowers us to act quickly to establish an MLUA in the event the market shrinks. Stabilizing the medical malpractice market continues to be our top priority. Through this measure and the Governor’s plan, we join the Legislature and the Medical Malpractice Commission in aggressively pursuing a variety of curative measures that will help keep our doctors in the state.”

The Department continues to scrutinize medical liability rates through rigorous review of insurers’ rate filings and examination of the rating and underwriting practices of Ohio’s top medical malpractice insurers.

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