State to approve malpractice program manager

The final step needed to get the newly created state medical malpractice program up and running will be before the Board of Examiners on Friday.

The process began less than a month ago to try help physicians -- especially in Southern Nevada -- find medical malpractice insurance. Doctors say with St. Paul Insurance pulling out of the business altogether and other companies demanding huge increases for coverage, many Nevada doctors will soon be without coverage.

The one-item agenda asks the governor, secretary of state and attorney general to approve spending up to $250,000 in emergency funding to hire American Governmental Risk & Insurance Programs as manager.

Insurance Commissioner Alice Molasky-Arman has already named five members of a board to run the Medical Liability Association of Nevada. The board headed by Reno insurance executive Robert A. Byrd will oversee the management company, which will handle all daily operations from underwriting and claims management to setting policies.

Program officials say they hope to begin offering insurance next week.

Molasky-Arman will ask the Board of Examiners agenda to approve an immediate $125,000 advance to cover the program's start-up expenses.

The insurance program was formed nearly 20 years ago to manage insurance pools operated by state and local governments around the country and already has similar contracts in several states including New Hampshire, West Virginia and South Carolina.

The malpractice crisis is affecting many states as insurance companies raise rates, complaining that jury awards have increased to a median of more than $1 million. St. Paul was the biggest medical malpractice insurer in the nation until it decided to pull out of the business. Company officials pointed to a $940 million loss in 2001.

West Virginia is already up and running with a state system similar to Nevada's and Pennsylvania is following suit. At least a dozen other states are considering similar moves.