W. Va. Court Rebukes Hospital, Upholds Doctor’s Right to Self-Insure

March 1, 2007

The West Virginia Supreme Court refused this week to hear Charleston Area Medical Center’s appeal of a 2005 circuit court ruling that upheld a physician’s right to provide his own medical malpractice insurance.

The hospital had sought to overturn Kanawha County Circuit Court Judge James Stucky’s ruling that granted summary judgment to Dr. R. E. Hamrick Jr. in one phase of a lawsuit he had filed against CAMC in September 2004.

Hamrick’s lawsuit alleged that CAMC administrators improperly pulled the physician’s privileges after he established a $1 million self-funded program instead of obtaining medical liability coverage through a commercial insurer. The Supreme Court temporarily restored his privileges while the case was pending.

CAMC officials had argued that Hamrick’s fund was not actuarially sound, did not comply with the hospital’s Medical Staff Procedures Manual, and did not meet the requirements of the Medical Professional Liability Act approved by the Legislature in 2003, which lowered the caps for non-economic damages in medical malpractice cases.

Stucky said Hamrick’s program provides the same protection as coverage by a commercial insurer. He also said CAMC did not present any evidence showing that Hamrick’s self-funded program was not actuarially sound.

The Supreme Court voted 5-0 not to hear the hospital’s appeal.

Neva Lusk, CAMC’s attorney, said the issue would not arise again.

Since the lawsuit was filed, CAMC’s board has adopted a policy that allows physicians to insure themselves. The Legislature passed a law in 2006 that allows physicians to set up self-funded trusts to provide coverage.

“The bottom line for us is that we get along beautifully with our physicians except for a very rare occasion,” Lusk told The Charleston Gazette.

A jury will decide damages in the lawsuit’s second phase, which alleged that CAMC officials interfered with Hamrick’s right to treat his patients by taking away his hospital privileges, Hamrick’s attorney, Karen Miller, said.


Information from: The Charleston Gazette,

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