Wyoming Med-Mal Rates on the Rise

Medical malpractice insurance rates are on the rise in Wyoming, and lawmakers anticipate being called into a special legislative session this summer to address the issue.

The Doctors Co., which insures about 30 percent of Wyoming’s doctors, was granted an 11.9 percent rate increase that will go into effect on July 1, according to the Associated Press. The insurer had requested a 13.1 percent increase. The increase of 11.9 percent is an average for all doctors in the state; some physicians will see their premium rates jump as much as 25 percent.

John Marlow, assistant vice president, West region for American Insurance Association (AIA), said that medical malpractice rates in Wyoming have been increasing steadily over the last decade.

A spokeswoman for a physicians group agreed with Marlow. “The rise in rates is certainly nothing new,” said Wendy Curran, executive director of the Wyoming Medical Society. “The most recent rate increase for The Doctors Company follows pretty closely on the heels of successive increases in both of the prior two years.”

Curran said that the current spike in rates is a result of OHIC Insurance Co.’s decision to pull out of Wyoming. OHIC insures about 43 percent of the state’s doctors, but will stop writing med-mal in Wyoming come Oct. 1. The company is pulling out of all states except its home state of Ohio. No other insurance company has stepped forward to cover all of OHIC’s Wyoming policyholders, which include 381 physicians and seven hospitals.

The state is in danger of losing doctors, according to Curran. She said that the recent rate increase will undermine Wyoming’s ability to retain practices in the state.

“A lot of doctors are leaving the state,” she said. “We have seen problems in maintaining physician practices in the state over the past year to year and a half. But certainly when OHIC left, The Doctors Company rates were granted another rate increase and we have a running tally of the [doctors] who are either retiring, leaving the state or restricting their services. We have a hard time updating our list on any given day of names of physicians who are deciding to make a change.”

Agents and brokers are trying the best they can to locate replacement coverage for OHIC’s insureds. One such company is the Utah Medical Insurance Association, said Michelle Schum, a medical liability specialist at Cheyenne, Wyo.-based Ed Murray & Sons.

“It’s definitely more costly for the physicians and obviously they all have to be re-underwritten by Utah Medical,” she said. “It’s not like Utah Medical is just going to automatically write the OHIC business. Each one of them has to be underwritten and taken a look at from there.”

Marlow said that it can be frustrating for agents and brokers with so few companies writing med-mal insurance in the state.

“It has a negative impact to the fact that fewer companies writing means less business for agents and brokers,” he said. “They’re in favor of creating a healthy and competitive marketplace in which they can represent companies and market and sell their products. As more companies pull out, there’s less capacity in the market and less product for agents to sell.”

The Wyoming Legislature is anticipating a special session will be called to address the issues of medical malpractice insurance availability and judicial reforms. Senate President April Brimmer Kunz and House Speaker Fred Parady have initiated a poll that will be conducted by the Wyoming Legislative Service Office (LSO). The poll will ask lawmakers if they feel that a special legislative session should be called to address med-mal issues. The special legislative session will be held if a majority of the membership of the houses consents to the special session, according to LSO.

The special legislative session will most likely begin on July 12 and end on July 16 or 17. Previously, only the governor could call the Legislature into a special session, but Wyoming voters amended the state constitution. This is the first time that Wyoming legislators have used their authority to initiate a special session.

The Wyoming Legislature spent a great deal of time discussing medical malpractice and tort reform in the last legislative session, but no bills were passed.

“There’s been a tremendous amount of study and debate and discussion already,” Marlow said.

One of the big obstacles in Wyoming is a constitutional prohibition against the capping of damage awards, according to Marlow.

“It’s been the consensus among insurers providing medical malpractice that civil justice reform is a very serious problem in that market,” he said. “The escalating rates and the ability to even compete in the market has been reduced greatly as a result of runaway juries and runaway plaintiff awards in medical malpractice suits.”

The only way to place a limit on damage awards in med-mal lawsuits is through a constitutional amendment. It would have to be approved by both houses of the Legislature and then the measure would be placed on the ballot for a popular vote.

“It’s a difficult process to navigate to achieve the [necessary] reforms,” Marlow said.

Curran said that Governor Freudenthal and Insurance Commissioner Ken Vines also have been working hard to address the med-mal problem.

“I know that they have personally contacted a number of other insurance companies to see if they can entice someone here, to see if there’s an interest in bringing other insurers here,” she said. “I know they too are looking at some proposals as far as premium subsidies or financial assistance with tail coverage, things that would provide some immediate relief to physicians and enable them to stay here in the state.”

Marlow said that a joint judiciary committee has been appointed to study the med-mal issues.

“I think everyone knows the issue fairly well and knows where the problems are in the system and it’s just a matter of mustering up the political will to get it done,” he said.