Senate Dems Move to Strip Med Mal Antitrust Exemption

February 13, 2003

Sen. Patrick Leahy (D-Vt.) and eight other Senate Democrats have introduced a bill that would strip medical liability insurers of their immunity to anti-trust laws.

The Medical Malpractice Act of 2003 (S. 352) would amend the McCarran-Ferguson Act, which established a limited exemption for medical liability insurers so they can share information to decrease uncertainty in pricing.

Leahy said the bill would only target what he termed “the most pernicious antitrust offenses — price-fixing, bid-rigging and market allocations.”

Leahy is the ranking Democrat on the Senate Judiciary Committee, which is holding joint hearings with the Health, Education, Labor and Pensions Committee on the malpractice liability crisis.

Committee Chairs Orrin Hatch (R-Utah) and Judd Gregg (R-N.H.) have targeted “out-of-control medical litigation” as the reason for the hearings, but Leahy and many Democrats oppose the caps on non-economic damage awards proposed by President Bush and now making their way through the House of Representatives.

The bill would only exacerbate the crisis, said one industry group.

“This bill is nothing more than a smokescreen to divert attention from the real cause of this crisis: increased awards and increased costs,” said Kenneth Schloman, Washington, D.C., counsel for the Alliance of American Insurers, which represents 340 property/casualty insurers.

“Insurers are not to blame for the dramatic rise in million-dollar verdicts, the root cause of the rise in malpractice loss costs.”

Without the antitrust exemption, Schloman argued, insurers would more than likely to have to increase prices based on uncertainty due to the lack of information sharing made verboten by the bill.

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