Insurance Reforms Key to Med-Mal Breakthrough in Washington

Washington Insurance Commissioner Mike Kreidler this week commended Gov. Chris Gregoire and the parties who negotiated a breakthrough agreement on medical malpractice issues.

The agreement, represented in a revised version of House Bill 2292, addresses the three dimensions of the medical malpractice debate:

* Improved patient safety
* Reforms to the legal system
* Medical malpractice insurance regulation.

Kreidler said after the failure of dueling initiatives last year, this legislative session is “our only real window of opportunity” to reach agreement, noting that this crisis has already peaked. Medical malpractice insurance rates are going down and access to insurance is improving with a more aggressive marketplace.

While the medical malpractice market is improving now, it will reportedly worsen again without the reforms of House Bill 2292.

“Nationally, there will be another medical malpractice crisis in the next decade where the price of insurance goes up and it becomes difficult to buy. But with today’s landmark agreement, many of the factors driving the crisis will be minimized here in Washington, to the benefit of our doctors, hospitals and patients,” Kreidler said.

The four key insurance reforms negotiated in the agreement:

1. The reporting of closed medical malpractice claims by all insurers. Current law allows the Commissioner to obtain data only from the companies he regulates. The new law would also require data reporting by self-insured providers, such as hospitals and large medical clinics, and surplus lines insurers that sell insurance to high risk providers or specialties.

2. Prior approval of medical malpractice insurance rates by the Insurance Commissioner. Under the new law, companies must have approval before they can charge the new rates. Current law allows companies to charge new rates to providers up to 30 days before filing them with the Insurance Commissioner for his review.

3. The agreement spells out what information can be considered for underwriting purposes. The insurance company must disclose what significant factors in the provider’s background resulted in higher premiums or reduced coverage. This written notice must be in clear and simple language.

4. Insurance companies must provide written notice of non-renewal to the insured at least 90 days before the policy expires. Currently, only 45 days notice is required.

“For the first time ever, the Office of Insurance Commissioner will have complete data on medical malpractice claims – the cost of claims, settlements and jury awards,” Kreidler said. “This means we can make critical policy decisions based on facts rather than anecdotes.”