Dr. Raj Chanderraj, right, representative for the Clark County Medical Society, speaks at the Medical Malpractice Hearing at the Legislative Building in Carson City on Monday morning. Dr. Daniel McBride, a Las Vegas surgeon, left, also spoke to the committee.
By BRENDAN RILEY
Associated Press Writer
CARSON CITY, Nev. (AP) -- Nevada's insurance commissioner, urged by doctors to help hold down soaring medical malpractice insurance rates, said Monday she can't force insurers to operate at a loss.
"If insurance companies show that their rates are justified by cold, hard data," I must approve them," Alice Molasky-Arman said during a hearing on the malpractice insurance crisis.
"Our laws require that rates not be excessive," she added. "But they must be adequate. I can't force insurers to do business here at a loss. I can't suppress rates."
The insurance commissioner noted that state legislators tried at one point to suppress auto insurance rates, but the law they passed was later struck down by the 9th Circuit Court of Appeals as unconstitutional."
"I'm operating within limits here, and you have to realize that," Molasky-Arman said.
Short-term alternatives to slashed rates, according to the Insurance Division, include forming a joint underwriting association with the state, setting up a doctors' mutual insurance company, or appealing to existing companies to prepare new plans.
Molasky-Arman said she'd work to process a solution such as joint underwriting in "record time" rather than the several months ordinarily required.
Long-term solutions could include lobbying the state Legislature for tort reform similar to California's $250,000 cap on jury awards for pain and suffering, health officials and insurance company officials have said.
Before she can enact emergency insurance procedures to maintain coverage for all medical personnel, state law required Molasky-Arman to conduct Monday's public hearing to determine the availability of essential insurance coverage.
Witness after witness testified at the hearing that skyrocketing malpractice rates -- with some annual policies jumping from $40,000 to $250,000 or more -- are prompting some doctors to retire early, double their patient load, cut services or quit.
The crisis is especially bad in southern Nevada, where the only emergency center plans to stop operating around the clock next month and could shut down entirely in June if rates are not lowered, Molasky-Arman was told.
Several doctors representing the Nevada State Medical Association warned that if nothing is done, many doctors will leave the state.
Recent decreases in physician reimbursement rates from area insurance companies are compounding the matter and leaving doctors no choice but to stop practicing, the doctors said.
The Nevada Trial Lawyers Association argued there's no such thing as a frivolous malpractice lawsuit because every case must be reviewed by a doctor and deemed to be probable malpractice before it can be filed.
The NTLA also said insurance companies are raising rates to compensate for having lost money on investments and for insuring bad doctors in the past. In the case of the biggest insurer in Nevada, St. Paul Cos., the trial lawyers said it lost $108 million on Enron investments.
Trial lawyers also said that state law shields bad doctors and their insurers from public scrutiny. And they said a cap on jury awards won't reduce malpractice premiums.
The insurance commissioner also heard from representatives of Nevada's nursing homes who said their industry also is threatened by the high rates.
Nevada's crisis in medical malpractice insurance was precipitated when St. Paul Cos. in December stopped offering malpractice insurance, citing higher jury awards in malpractice lawsuits.
Company representatives said that for every premium dollar it got in Nevada premium payments, $2 went back out as a result of lawsuits.
Along with St. Paul Cos., Interstate Insurance Co. of Chicago and the New York-based National Union Fire Insurance Co. have said they'll discontinue providing coverage in Nevada when their current policies expire.
Several other companies plan to increase rates, be more selective in underwriting new policies or limit their existing coverage for those who work in high-risk areas of medicine.
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