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Proposed Medical Malpractice Reform in NY

By Rheingold Giuffra Ruffo Plotkin & Hellman LLP

The two-year moratorium on medical malpractice premium hikes expired on July 1, 2010. The original moratorium was passed as a part of a larger budget bill in 2008, in response to the escalating costs of medical malpractice insurance in the state. According to Crain’s New York, Governor David Paterson’s administration is drafting a program bill aimed at reform. While the governor has not spoken publicly about the forthcoming proposals, a spokesperson has said the office believes it has included something for everyone and it is “hopeful there’s nothing in it that hurts anyone.”

At the same time, the assembly is reviewing a bill that would limit the discussions that hospitals and their insurers may have with doctors accused of medical malpractice.

Ratings Service Organization

Crain’s source from Gov. Paterson’s office said one focus of the prospective plan is the creation of a “ratings service organization,” a panel comprised of five to seven experts. These actuaries and insurers would analyze claims data every year in order to provide guidance in determining premiums. The organization would send its recommendations to the state Superintendent of Insurance, who is currently solely responsible for setting rates.


A second proposal in the plan, Crain’s reports, is to levy a surcharge against property and casualty insurance in the state. The surcharge would extend to homeowner and automobile policies, and would be aimed at elimination of the current $362 million deficit in the Medical Malpractice Insurance Pool (MMIP).

The MMIP in New York guarantees medical malpractice insurance to doctors considered high-risk – usually because they have been involved in a large number of medical malpractice suits; these doctors can therefore not get coverage on the open market. Eric Poe, lawyer and vice president of marketing and business development for NJ PURE medical malpractice insurance, says this arrangement is flawed. “It doesn’t weed out the bad doctors like a true market system would.”

While the rate increase of an estimated six percent is lower than many doctors expected, they will not receive as hoped the $87 million state subsidy that would have lowered premiums. Critics of the surcharge claim the true solution lies in tort reform to reduce the number of medical malpractice cases, the size of jury awards or both. Recommendations have included:

  • Removing cases involving severe neurological impairment of newborns from the trial courts and instead covering damages through no-fault insurance
  • Reviewing cases by special administrative courts
  • Requiring doctor fault of at least 50 percent in order for liability to attach (as opposed to the present one percent of liability currently required)

The source in the Crain’s article claimed both that the deficit, which could grow to almost $460 million by the time claims are settled, is almost certainly due to the moratorium on rate hikes and that the plan will be presented to the legislature during the current session. The spokesperson declined to comment whether the plan offers state trial lawyers anything but denied reports that contingency fees will be increased.

Ban on Ex Parte Communications

Meanwhile, New York trial lawyers are lobbying for a bill that would prohibit ex parte interviews with the doctor or health care provider in any personal injury, medical, dental, or podiatric malpractice, or wrongful death suit.

That is, hospitals and insurance companies would not be permitted to speak with a doctor against whom a claim has been brought unless the patient bringing the claim is present. Lawyers for the patient are exempt from this prohibition.

Opponents of the bill say it would prohibit informal conversations designed to gain an understanding of what in a patient’s care led to a claim, and would result in driving already high malpractice premiums through the roof. Poe complained that a commercial carrier that refuses to cover a physician who has been sued repeatedly for malpractice would still have to pay for the doctor anyway through MMIP.

Those who have been injured as the result of medical negligence should contact a lawyer to protect their interests. While a lawsuit cannot erase suffering, financial stability can set a victim’s mind at ease while he or she focuses on healing.

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