Florida med mal rates decreased by around 10% in 2007 compared to 2006. With a number of different companies offering quality liability coverage it's important for physicians and surgeons in the Sunshine State to shop around to get the best rate. The downward trend in rates is expected to continue due to the 2003 tort reforms so make sure you are not overpaying for your liability coverage.
While the state passed considerable tort reforms in 2003, Florida (South Florida, specifically) holds the dubious distinction of having the highest medical liability premiums in the country. According to the Medical Liability Monitor’s 2007 Annual Rate Survey, a general practitioner in Miami-Dade County insured by the state’s largest professional-liability carrier was paying $68,867 in base-rate premium while general surgeons and Ob/Gyns paid $275,466. When compared to states with more favorable tort environments like California—where internists pay an average of $11,560 in base-rate premium and Ob/Gyns an average of $51,784—it’s no wonder Florida is concerned with the future of its physician supply and quality of healthcare.
While the premium dollar amounts seem staggering, Florida’s professional medical liability insurance rates did experience an average rate decrease of around 10 percent in 2007, and insurance experts expect that downward trend to continue as the tort reforms passed in 2003 continue to take hold.
“Floridians should take heart,” said Dr. Lawrence McQuillan, co-author of the study “U.S. Tort Liability Index: 2008 Report” and director of Business and Economic Studies at the free-market think tank Pacific Research Institute. “Although their state presently has the highest tort costs and risks, Florida has among the best tort laws in America due to recent reforms. As a ‘salvageable’ state, the Florida tort climate should improve as a result of its reforms.”
A 2002 comparative survey of malpractice insurance premiums revealed an invasive cardiologist in Los Angeles paid $16,148 for $1 million coverage, whereas the same specialist in Miami paid $106,497, the highest in the United States; cardiovascular surgeons in Los Angeles paid $42,292, whereas a Miami surgeon paid $212,994.
Furthermore, across the country, the frequency of claims—based on number of claims per 100,000 physicians—has been relatively stable since 1991, with a national high of only 5.77. In spite of this, Florida claims—frequency per 100,000 population—increased from a low of 4.82 in 1998 to a high of 7.56 in 2000. As such, the average malpractice premium per doctor in Florida was 55-percent greater than the national average. This increased payout and increased frequency of claims caused more than 30 commercial malpractice insurance companies to leave the Florida market between 2000 and 2002, with fewer than 10 remaining to write policies. Insurance became not only unaffordable but, in many instances, unavailable for certain specialties.
This tumultuous malpractice insurance climate prompted then-Florida-Governor Jeb Bush to appoint a task force on healthcare professional liability insurance in August of 2002. This task force issued a comprehensive report that included 60 recommendations to the Florida Legislature, many of which were extracted from the successful California reform, the Medical Injury Compensation Reform Act(MICRA). These recommendations were intended to be effective in resolving the liability crisis by addressing proposed changes in physician discipline, patient safety, the insurance system and the tort system.
The healthcare coalition was able to successfully lobby the Florida House of Representatives and sustain passage of a bill that contained most of the 60 recommendations of the Governor’s task force. Although the Florida House of Representatives bill included a $250,000 cap on non-economic damages, the Florida Senate failed to move forward on the issue and did not pass meaningful legislation during the regular session in 2003. This led to Gov. Bush calling legislators back to Tallahassee for three special sessions until a consensus was reached with the passage of a tort reform bill in August 2003. The final bill included a cap on non-economic damages of $500,000, which could be increased to $1 million in certain egregious cases of death, paralysis and other serious complications from medical malpractice.
While the $500,000 cap on pain and suffering damages passed in 2003 and a constitutional limit on lawyers’ fees in malpractice cases that voters approved in 2004 appear to be taking hold and stabilizing malpractice rates, those rates have stabilized at levels still considered uncomfortably high by many physicians. Some of these physicians choose to take the risky route of “going bare.”
In insurance speak, “going bare” is when a physician decides to practice medicine without carrying any professional liability coverage. Florida is one of the few states that allow doctors to go bare, on the condition that they post bond, establish an escrow account or obtain an irrevocable letter of credit to cover malpractice verdicts up to $250,000 and hang a sign in their waiting room informing their patients that they practice without insurance.
Since 2003, the number of Florida physicians choosing to go bare has increased more than a third, the highest uninsured doctor rate in the country. Many choosing to go bare practice in Miami-Dade, Broward and Palm Beach counties, where medical-malpractice premiums are the highest. Among the specialists more likely to go bare are Ob/Gyns, neurosurgeons, general, cardiovascular, orthopedic and thoracic surgeons, radiologists, trauma specialists, pulmonologists, gastroenterologists and nursing-home doctors. A 2006 survey by the American College of Obstetricians and Gynecologists found that 35.6 percent of Florida Ob/Gyns are not covered by liability insurance.
Going bare is not a decision to be made lightly. Not only does it mean that a malpractice judgment is paid out of the physician’s personal bank account, but it could cost them their medical license. The bottom line is that going bare is still a bad economic gamble for the vast majority of doctors.
In response to the number of Florida physicians choosing to gamble by not carrying standard professional liability insurance, some companies are issuing insurance products to address the legal costs associated with going bare and receiving a claim. Medical Legal Expense Reimbursement Insurance policies provide reimbursement for legal expenses incurred for a medical malpractice claim against the provider, a peer review proceeding, a license review board proceeding and hospital privileges.
With med mal premiums continuing to decrease in Florida submit a quick and easy quote request and get the best rates available.
