MoDocs Chairman Works for Missouri Doctors

Medical malpractice

St. Joseph News-Press - July 11, 2006

MoDocs Chairman, Rob Schaaf MD together with Missouri Gov. Matt Blunt speak at bill signing Missouri took another step Monday in addressing high medical malpractice insurance rates, which some industry leaders said drove physicians and specialists out of the state.
The Missouri Insurance Department will have more information and control over medical malpractice insurance rates under legislation sponsored by state Rep. Dr. Rob Schaaf and signed into law Monday by Gov. Matt Blunt.
The bill requires insurance companies to provide more information about how they set rates to the state. It requires the state to publish market information for various risk types and a comparison of base rates for the largest medical malpractice insurance companies.
The bill requires the information to be reported not just by traditional insurance companies but also a new kind, set up generally by doctors to offer a cheaper alternative.
Currently, neither doctors nor insurance companies have data about how many lawsuits there are in Missouri each year or how many and what type of specialists practice in the state. That means insurance companies rely on incomplete information when setting doctors’ rates, Dr. Schaaf said.
“Uncertainty always translates into higher costs,” he said. “They’re always going to put in a fudge factor and guess high. This data is going to allow us to eliminate most of that uncertainty.”
Dr. Schaaf is a family physician in St. Joseph and chairman of the board of Missouri Doctors Mutual Insurance Co., a physician–owned, not for profit company he helped form two years ago to provide malpractice insurance.
Dr. Schaaf said that the new law combined with tort reforms enacted last year will create a better environment for physicians in Missouri. That means Missourians will have better access to physicians, including those in certain fields hit hard by the high cost of insurance such as neurology and obstetrics and gynecology.
The bill also gives the state insurance director authority to veto medical malpractice rates that are excessive, inadequate or “unfairly discriminatory.” But unlike past proposals, it doesn’t set thresholds for what rates are considered excessive, and rates don’t require the director’s approval before taking effect. Instead, they must just be reported to the director, who can reject them, using a variety of criteria.
Among them, rates are supposed to be based as much as possible on an insurer’s Missouri claims experience, not losses elsewhere. Investment decisions, along with inflation and geographic area, also can be considered.
Supporters say this year’s legislation is the second phase of efforts to keep doctors in the state by bringing down what they pay for malpractice insurance. Last year, lawmakers approved new caps on court judgments as part of several changes to the civil litigation system.
Both doctors and insurance groups also said Monday that while they expect the lawsuit limits passed last year will have more of an impact on doctors’ insurance costs, this bill also helps.
“The tort reform measure was the key issue. But this was a good companion bill that should stabilize rates,” said C.C. Swarens, executive vice president of the Missouri State Medical Association, which represents doctors.
The measure also has other protections, such as requiring insurers to give a client 60 days’ notice before not renewing an insurance policy or raising rates more than 15 percent. They also must provide about six months’ notice before pulling out of the market entirely.