Insurance reform bill draws mixed reactions

Thursday, April 21, 2005

JEFFERSON CITY, Mo. -- Doctors' groups on Wednesday endorsed legislation aimed at controlling medical malpractice rates, while insurance industry representatives expressed reservations about certain aspects.

The bill is intended to supplement another measure recently signed into law that puts restrictions on civil lawsuits in general and includes special protections for doctors, who claim litigation has helped drive up insurance costs.

"We think this is an important companion to tort reform," said Tom Holloway of the Missouri State Medical Association.

The House of Representatives overwhelmingly approved the measure earlier this month. The Senate Small Business, Insurance and Industrial Relations Committee heard testimony on it Wednesday. It is expected to forward the bill to the full Senate.

The many provisions of the measure include requiring insurance providers to give doctors at least 60 days notice before raising premiums by more than 10 percent. State Rep. Richard Byrd, the bill's sponsor, said doctors sometimes don't receive notification of major increases until just days before their coverage is to expire.

"That deprives the insured of an opportunity to go out and determine if there is any other provider in the marketplace that will give them a competitive bid," said Byrd, R-Kirkwood.

Companies would also be required to inform the Missouri Department of Insurance of plans to stop offering policies in the state 180 days in advance. When major insurers withdraw from the state overnight and without warning, Byrd said it has a devastating impact on the insurance market.

Another key provision would allow the insurance department to reject malpractice rates that are 20 percent above or below established rates. If under the lower threshold, a company would have to demonstrate the rate is actuarially sound and can support the payment of claims. If above the higher threshold, a company would have to prove the rate is justified.

Calvin Call of the Missouri Insurance Coalition, which represents the industry, said he has concerns with that provision.

"I don't like the price-control aspect from a market standpoint," Call said. "I hate to see that trend develop because we know when there is too much government involvement, it tends to have an effect on the market."

While the insurance coalition opposed the bill in the House, Call said it is considering shifting to a neutral position. Although Call said most of the bill is acceptable, the industry would like to see changes.

Gov. Matt Blunt has said insurance reform is needed to compliment the civil litigation bill in efforts to control medical malpractice rates.

The bill is HB 394.

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