New insurance law keeps many doctors on duty
PHILADELPHIA (AP) – For the third straight year, doctors who threatened to close their offices Jan. 1 rather than continue paying high rates for malpractice insurance have decided to stay on the job. A small number of physicians from around the state had alerted patients in early December that they were no longer able to afford skyrocketing premiums, and would close rather than renew their policies.
But many of those doctors have reversed those decisions because state lawmakers approved a bill offering doctors steep discounts on the annual payments they make to a state insurance fund. Gov. Ed Rendell was signing the bill into law Tuesday.
The abatements – good for two years – will save some doctors tens of thousands of dollars. Many decided the package was enough to keep them working.
“It is a temporary fix. It is not everything we wanted, but it allows us to keep practicing, for now,” said Deborah Barnes, an administrator at Women’s Health Care of Northeast Pennsylvania, which was among those that had announced that it would close.
Women’s Health Care, which is based in Honesdale and includes two doctors and three midwives, will save $140,000 in premiums, Barnes said.
Under the package, every doctor in the state will qualify for at least a 50 percent reduction in the payments they make to the state’s MCare insurance fund in 2003 and 2004.
Doctors in a select group of specialties who traditionally pay the highest insurance rates, including obstetricians, neurosurgeons and orthopedic surgeons, will have their MCare payment erased entirely for those years.
In exchange, clinicians must promise to keep practicing medicine in Pennsylvania for at least a year after the discount ends.
Doctors are split over how much the cut will help.
Physicians are required to buy private insurance too, and some doctors are facing their third straight year of double-digit rate hikes.
Family physician Neal Davis, of Carbondale, said that after 12 years of delivering babies, he has decided to discontinue obstetrical work in order to qualify for cheaper insurance.
Because he does not practice obstetrics full time, Davis only qualified for the 50 percent discount. He said that will not be enough to make up for an expected increase in his private insurance.
“I delivered my last baby on December 27th,” Davis said. “It’s a sad day for me.”
Edwin W. Shearburn III, a surgeon at Grand View Hospital in Sellersville, said he will save $27,800 on his MCare payments if he applies for an abatement, but his overall insurance bill could still almost triple next year to as much as $87,643.
“The entire system is out of control,” he said.
For the second year in a row, Shearburn announced in early December that he was giving up surgery in Pennsylvania because of the high rates, but he said this week that he is likely to keep operating for now.
He made a similar reversal of his decision to close shop last December, when Rendell first proposed the MCare rate reduction. The pledge took a year to become law.
The rate relief will cost the state $180 million and will be paid for out of the $255 million expected to be raised by a 35-cent increase in the state’s cigarette tax.
The Pennsylvania Medical Society has been lobbying for a constitutional amendment that would seek to lower malpractice insurance rates by capping the amount of money someone could recover if they were hurt or killed by a doctor’s error.
Lawyers and some patient advocate groups have opposed such a cap, arguing that it would wrongly give a free pass to negligent doctors and hospitals.
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On the Net:
Pennsylvania Department of Insurance: http://www.ins.state.pa.us/
AP-ES-12-30-03 1209EST