Maryland Gov. Robert L. Ehrlich Jr. was presented with several options for delaying an average 33 percent increase in medical malpractice rates that many doctors began paying Dec. 1 but has decided against pursuing them as he pushes for a broader solution.
Democratic lawmakers criticized Ehrlich (R) yesterday for not exploring options that they said could have given state leaders more time to resolve their impasse on malpractice legislation -- and doctors more time to decide whether to keep their practices open.
"I think it's an opportunity lost," said House Speaker Michael E. Busch (D-Anne Arundel). "The doctors don't know whether this is going to get resolved or not."
In a Nov. 26 memo to an Ehrlich aide, a lawyer for the Maryland Insurance Administration identified several steps that could delay the increase from the Medical Mutual Liability Society of Maryland but noted that some were legally "untested."
Donald J. Hogan Jr., the aide, said the governor has not focused on those options because he remains hopeful that a deal will be struck in time to hold a special session of the General Assembly by the end of the year. The legislation under discussion includes a new state fund that would effectively curb doctors' rates.
Yesterday, Busch and Senate President Thomas V. Mike Miller Jr. (D-Calvert) offered markedly less optimistic forecasts for a special session.
Payments were due to Medical Mutual, which insures more than three-quarters of the state's doctors in private practice, on Dec. 1. The policies of doctors who do not pay by the end of the year will be canceled.
Miller said a delay in the rate increase would give doctors time to see what happens when lawmakers convene for their regular session in January. He called prospects of a special session on medical malpractice "dim," given disagreement with Ehrlich over how to pay for the proposed state fund.
Questions raised by Busch and other participants in a closed-door meeting with Ehrlich prompted the memo from Assistant Attorney General Kathleen Birrane.
In the memo, she said Maryland's insurance commissioner has several options to delay Medical Mutual's rate increase, which was approved in the fall. Birrane cautioned, however, that some of the approaches could prompt legal action by the insurer.
Under one possibility she cited, the insurance commissioner could order that the rate increase not take effect until a later date. At that point, the amount of the increase could be adjusted to reflect action taken -- or not taken -- by the General Assembly.
Some key lawmakers, including Sen. Brian E. Frosh (D-Montgomery), who led a Senate task force on medical malpractice, said they are not convinced of the wisdom of that approach.
"This whole thing has been very disruptive, but it would be even more disruptive to grant the increase and pull it back," Frosh said.
Willarda Edwards, president of the Maryland State Medical Society, said she had mixed feelings about delaying Medical Mutual's rate increase.
"Whatever they can do to decrease the rate increase in the short term is welcome," she said. But Edwards said she feared that the move might decrease the chances of passing legal reforms, which would have a greater effect on insurance rates in the long term.
Ehrlich is pushing a package that includes several new curbs in payouts to plaintiffs in malpractice cases in addition to the new state fund. The Senate panel led by Frosh recently embraced a package that includes only some of the changes sought by Ehrlich.
Yesterday, Miller and Busch said that the largest obstacle to a special session is agreeing on a revenue source for the special fund. They favor imposing a 2 percent premium tax on HMOs and managed-care organizations, which could generate $80 million a year.
Ehrlich has rejected that approach, the cost of which he says would be passed along to consumers. Last week, he suggested taking surplus funds from a fledgling state program that provides insurance to high-risk patients who cannot obtain private coverage. Ehrlich has also suggested taking money from Maryland's general fund.
