News - Oklahoma Medical and Healthcare Professional Malpractice Liability Insurance
Last-minute effort allows suit reform bid to advance in state House
April 11th, 2008A bill that would affect how lawsuits are treated in court cases ranging from personal injury to medical malpractice passed a House committee Wednesday evening after it was slipped into another measure.
“This is about politics and politics only,” said Rep. Richard Morrisette, D-Oklahoma City. “The governor vetoed this bill last year and I suspect he’ll do the same thing. This is an election year. This is a set-up bill.”
Sullivan said the bill would “make a level and clear playing field available for everyone who does business in the state of Oklahoma.”
Similar measure was vetoed before
Henry vetoed last year’s lawsuit reform measure in late April. Discussions during the waning days of last year’s legislative session produced no compromise.”We will need to review the latest bill to see what is in it,” the governor’s spokesman, Paul Sund, said Wednesday night. “It will be problematic if it is essentially the same bill with the same objectionable language in it.”
Among other things, the bill would cap noneconomic damages, which generally are for pain and suffering, at $300,000. It would limit a jury to award punitive damages only if it found intentional or gross negligence by clear and convincing evidence.
Henry in vetoing last year’s lawsuit reform measure said he concluded several provisions of the bill were unconstitutional, and it unduly restricted Oklahomans’ ability to seek justice. He also thought it did not do enough to curb frivolous lawsuits.
Republican legislative leaders last year criticized the Democratic governor’s action.
Sen. James Williamson, R-Tulsa, two weeks ago challenged Henry to make a counter-offer to the lawsuit reform measure.
Rep. Scott Inman, D-Oklahoma City, a member of the Judiciary and Public Safety Committee, opposed this year’s bill.
“This is the same thing we dealt with last year,” said Inman,. “We’re a state that’s tough on crime but soft on negligence.”
PLICO overcomes $143 million deficit
April 3rd, 2008
OKLAHOMA CITY – In 2003, if an Oklahoma medical doctor needed malpractice insurance, the Physicians Liability Insurance Co., founded by the Oklahoma State Medical Association, was pretty much the only game in town – and it was in trouble.
At the time, PLICO insured between 80 percent and 85 percent of Oklahoma physicians. In November of that year, PLICO officials asked the Oklahoma Insurance Department for a whopping 82.8-percent rate hike, which would have cost doctors more than $40 million in 2004. That was on top of a 60-percent rate increase for 2003.
PLICO’s request sparked the first-ever rate hearing as mandated by a new Oklahoma tort reform statute. The law required then-insurance Commissioner Carroll Fisher to conduct a hearing if doctors asked for one. Several physicians told Fisher that such a massive rate boost would damage their practices. Some said the PLICO filing penalized them, even though they had no history of malpractice lawsuits.
Dr. Carl Hook, PLICO president and CEO, said the average Oklahoma doctor saw his or her liability insurance rates increase between 300 percent and 325 percent between 2001 and 2005. Hook said a spike in malpractice claims and verdict amounts fed PLICO’s problems. However, plaintiffs’ verdicts were not the insurer’s only woes. “Our insurance was much less expensive than surrounding (states), and we offered larger limits than other insurance did,” said Hook. “That is some of the problem of why we got into financial problems.” Hook said that PLICO no longer offers the $5 million policy limits it once wrote. In 2003, PLICO was still writing occurrence-based policies, not the claims-made insurance it offers today. Generally speaking, an occurrence policy covers incidents that happen during the policy period, without regard to when claims are reported. Claims-made insurance covers incidents that happen and are reported while the policy is in force.
Hook said that PLICO had no reinsurance on its occurrence book of business, because reinsurers would no longer cover it. Ultimately, Fisher approved the requested increase, but spread it out over three years. PLICO also stopped writing occurrence policies in mid 2004. “We were able to purchase reinsurance at that time,” Hook said. “So, we’re reinsured for new claims originating since July of ‘04.” Hook said that PLICO had 1,250 open claims when new management took over in 2005, a figure that has since been cut to about 250, on its old book of business. He said that PLICO has a couple of hundred open claims on its new types of policies. He also said that PLICO has been able to reduce the average amount of time it takes to resolve a case from five and one-half years to less than four years, with a goal of three and one-half years. He said the industry average is about five years. “That’s the bad thing about litigation of medical malpractice,” Hook said. “You’ve got to charge your physicians premiums now for what you may need to be spending on them four and five years down the road. That’s hard to predict.”
It’s also part of what got the company into trouble, he said. “They did not charge enough premiums in the late ‘90s and 2000 and 2001,” Hook said. “The actuaries did not predict what we were going to need in monies, and we came up woefully short. That’s a real long tail, because it takes so long for these things to work through the process.” Hook said lack of reinsurance also made PLICO “very, very careful” about going to trial due to its potentially increased exposure; the company became more likely to settle cases. He said the revamped PLICO is much more aggressive about taking cases to trial, and it’s winning them. Hook said that PLICO did not have the troubles with investments experienced by some companies in recent years, because it was not allowed to invest in stock or equities. “Our entire portfolio was in government bonds,” he said. “They’re very stable. They don’t make you a lot of money, but those are the only investments we’ve had since our inception.” Along with the rate hikes and other changes, the Oklahoma Legislature also got involved, giving PLICO four years to dig its way out of the financial hole. That four years expires at the end of this year.
However, PLICO officials announced last October that the insurance company had overcome a $143 million surplus deficit after only two-and-one-half years.
“Now, we’re building positive capital to make us the strongest the company has ever been,” Hook said. “We’ve equaled the best financial condition that PLICO’s ever been, in its 28-year history.” Might that good news lead to rate cuts for physicians? “I don’t know when we’re going to be able to lower (rates),” Hook said. “But I am anxiously waiting for that to happen. I want to reward our loyal physicians that stayed with us and had faith in the company.”
PLICO has lost a lot of doctors to the handful of new professional liability insurers that have come into Oklahoma over the last few years, but still insures more than half of the state’s doctors. Hook said some of those out-of-state firms are selling insurance to Oklahoma doctors at rates cheaper than they offer elsewhere, to undercut PLICO.
Overall, Hook said, PLICO’s rates compare favorably with insurers in surrounding states. Hook said most PLICO policyholders saw decreased insurance costs for 2007 and 2008 in the form of individually discounted premiums. In a new program, physicians can complete risk management requirements this year to earn additional credits toward next year’s premium costs. Hook said the company hasn’t raised base rates in a couple of years, “but we are discounting those doctors who have excellent loss experience,” he said.
Coffee, Republicans will push for lawsuit reform
January 17th, 2008| By Patrick B. McGuigan | |
| Wednesday, 16 January 2008 | |
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Oklahoma Senate Republicans are determined to push sweeping lawsuit reforms in collaboration with House allies, building a coalition with willing Democrats, Senate co-President Glenn Coffee said in a lengthy recent interview. While saying he would like to work with Gov. Brad Henry to get a good bill signed into law this year, Sen. Coffee did not mince his words when making criticisms of the governor, Attorney General Drew Edmondson, and the state Supreme Court. Coffee said the most compelling arguments he can make for reform center on “jobs and health care.” “Lawsuits and the threat of lawsuits are driving up health care costs for everyone,” Coffee said. “Many doctors practice ‘defensive medicine’—such as ordering unnecessary, costly tests and examinations—in order to defend against potential malpractice lawsuits.” The Republican leader declared, “Lawsuits are making health care harder to find.” Coffee pointed to a survey from the Oklahoma Alliance of Physicians for Tort Reform showing lawsuit threats “caused nearly one-fifth of Oklahoma doctors to consider leaving the state, while 60 percent of doctors have stopped performing riskier procedures (like delivering babies). Lawsuits are also playing a role in the growing shortage of critical medical specialties here, such as obstetrics, especially in rural Oklahoma.” Coffee supports pro-reform doctors, many of them Democrats, who say colleagues are relocating their practice to Texas, where the surge of requests for new medical licenses is so great that Lone Star bureaucrats are having trouble keeping up with the demand. Finally, he observed, a State Chamber survey of Oklahoma businesses found that 87 percent of businesses believe our legal climate hurts job growth. And, 52 percent say they would consider moving their business out of state because of lawsuit threats. The Oklahoma City Republican said this year’s GOP reform agenda would be similar to the bill Gov. Brad Henry vetoed last year. Major provisions, he indicated, will include a cap on non-economic damages, elimination of “joint and several” liability (also known as the “deep pockets” rule), better definitions of “frivolous” lawsuits so that these are easier to dismiss, protections for school teachers and volunteers, protections for gun manufacturers from lawsuits related to the criminal or negligent use of a firearm, protections for restaurants and food producers from lawsuits by people with poor eating habits, and class action reform. Coffee promotes comity and good relations with Senate Democrats, but is frustrated by the chief executive’s position on lawsuit reform. “In 2007, we sent Gov. Henry lawsuit reform legislation that included 18 of the 28 provisions he proposed as part of his 2004 ‘Texas Plus’ bill. Unfortunately, he flip-flopped and vetoed that bill.” Coffee said he is concerned because “Gov. Henry’s rhetoric following the veto seems to indicate that he will not sign a bill if it includes the major reforms sought by the medical and business communities.” Pressed to analyze that controversial veto, Sen. Coffee said, “It is the trial lawyers who take him on exotic vacations and fund his campaigns. And it’s the trial lawyers who dumped campaign cash into the campaigns of the governor’s party members in the Senate in the days just before and after most Senate Democrats voted against SB 507. At the end of the day, I believe Brad Henry values his trial lawyer friends a lot more than he values the opinions of doctors and business owners.” Coffee said, “At the end of the day, if we don’t have broader lawsuit reform, it will be because Brad Henry has chosen not to sign it.” Coffee expressed frustration at the power of the state trial lawyer lobby. “I am continually amazed at the ability of this group to promote resolve by the governor to avoid any compromise, and to simply kill a bill that had real support and that represented what the governor had previously said he would sign.” Coffee said legislative Republicans have noted that a majority of the state Supreme Court is “clearly not friendly to our reforms.” As a result, “an issue that some legislators are beginning to look at is the reform of the judiciary itself. There is a growing concern that even when the Legislature is able to enact meaningful reforms related to litigation or workers comp, the courts will strike them down. So, we’re starting to see ideas such as Senate confirmation and term limits for judges and justices being looked at as a means to rein in the judiciary.” Coffee assessed Attorney General Drew Edmondson’s relatively recent direct involvement in opposition to lawsuit reform: “Drew is obviously relevant. He is the chief law enforcement officer of the state. Why has he chosen to involve himself so directly in a matter that is not central to his office’s work? It’s a little puzzling.” But maybe only a little: “I think it’s because he’s too tight with the trial lawyers for reasons going back to the tobacco litigation and other issues.” |
Court again tosses out lawsuit reform statute
January 16th, 2008Jan. 12–The Civil Appeals Court says the law subjects medical malpractice plaintiffs to a higher standard.
OKLAHOMA CITY — For at least the second time in slightly more than a year, a state appeals court has told lawsuit reform proponents that they got it wrong. The Oklahoma Court of Civil Appeals has struck down a lawsuit reform statute, saying it treats medical malpractice plaintiffs differently from others who file lawsuits. The decision comes in the wake of a 2006 Oklahoma Supreme Court ruling that tossed another measure. The justices said it put medical negligence cases in a separate class from all other negligence claims and created a monetary barrier to the courts by requiring an expert witness to attest to a case’s merits. The most recent decision comes just weeks before lawmakers return to the Capitol, where a renewed battle over lawsuit reform is expected. Last year, Gov. Brad Henry vetoed a controversial lawsuit reform measure, Senate Bill 507, saying several provisions were unconstitutional, unduly restricted access to the courts, and didn’t do enough to curb frivolous lawsuits. Senate Co-President Pro Tem Glenn Coffee, R-Oklahoma City, said lawsuit reform will be on the agenda of Senate Republicans, who “will continue to advocate for comprehensive, broad-based and meaningful reforms like those in the lawsuit reform package we put on the governor’s desk in 2007.” The Court of Civil Appeals decision issued Thursday said Lisa K. Jones could pursue her case in Oklahoma County for the alleged wrongful death of her husband, Michael W. Jones, who died after surgery at an Oklahoma City hospital. The trial court had tossed Jones’ case after she failed to inform defendants of the suit within 180 days.The appeals court said a tort reform package passed in 2003 that required such notification treated medical malpractice plaintiffs differently. The opinion said other plaintiffs had the ability to show the court why notification was not made within 180 days but that medical negligence plaintiffs had no such opportunity. The law “holds medical negligence plaintiffs to different and stricter standards than any other plaintiffs,” the opinion states.Diane Hinkle, a lawyer for Jones, said the Richardson Law Firm in Tulsa handled the appeal but not the initial case.”The court is saying again, as the Oklahoma Supreme Court said, this is a special law that singles out a class of plaintiffs and subjects them to law in which there is a general law in place that affects all plaintiffs,” Hinkle said. Rusty Hendrickson, an Oklahoma City lawyer who represented Dr. Jay P. Cannon, said the case will be appealed. Integris Baptist Medical Center also was named as a defendant in the suit. An attorney for the hospital could not be reached for comment. The law was enacted to require a patient who files a malpractice suit to give timely notice of it, Hendrickson said.”It was a reasonable attempt to further the goal of lawsuit reform and further legitimate state interests,” he said. “A physician who doesn’t even learn he has been sued until years after the care and treatment he provided is placed at a terrible disadvantage in defending a lawsuit.”
——Barbara Hoberock (405) 528-2465barbara.hoberock@tulsaworld.com
Romney Wants to Cap Malpractice Payments
November 27th, 2007It is being reported that Republican presidential candidate Mitt Romney is calling for a cap to be put on medical malpractice lawsuits, a fact that will surely win him votes from the medical community.
Due to huge malpractice amounts being awarded to plaintiffs, many doctors working in the US are being forced out of work due to rising costs of insurance associated with malpractice.
“I believe we have to enact federal caps on non-economic and punitive damages related to malpractice,” Romney said. “These lottery-sized awards and frivolous lawsuits may enrich the trial lawyers but they put a heavy burden on doctors, hospitals and, of course through defensive medicine, they put a burden on the entire health care system.”
“We’ve got to reign in the incessant cost of medical liability,” he added.
Romney, speaking in front of approximately 500 students at an Iowa medical school stated that he would encourage the founding of health courts with judges who were experienced in the handling of medical liability.
When asked about his version of a health care system compared to Hillary Clinton’s he said: “My approach is based on the free enterprise system and personal responsibility and hers is based on government. Government reliance is not a conservative principal and that’s what exists throughout the country except now in Massachusetts.”