January 23, 2022

The Chairmen of the Maryland Senate Budget and Taxation Committee and House Appropriations Committee’s “Report on the Fiscal 2021 State Operating Budget (SB0190) and the State Capital Budget (SB0191) and Related Recommendations” required the Health Services Cost Review Commission (HSCRC) to fund an independent actuarial analysis of Maryland’s medical professional liability (MPL) market due to concerns that insurers are leaving the state.

The report submitted as a result stated, “The most significant contributor to higher overall costs in Maryland appears to be the size of claims. The average size of a hospital professional liability loss payment between 2010 and 2020 (limited to $10 million per event in order to reduce the influence of very large claims) is 75% larger in Maryland than countrywide statistics based on internal Milliman data … Maryland currently has a non-economic damage cap in place, which increases by $15,000 each year. The cap is at $845,000 for medical liability events that occur in 2021 ($1,056,250 for wrongful death cases filed with two or more beneficiaries). This is among the highest non-economic damage caps in the United States, although nearby Virginia’s total (non-economic plus economic) damage cap is currently more than $2 million (Exhibit C4). Various studies have shown that “damages caps reduce liability insurance premiums.””

The report notes that “Increased employment of physicians by hospitals is one reason for the increase in Maryland premium (and overall risk). Survey results show that full time equivalent physicians insured by the hospital’s self insurance mechanisms increased by 33% from 2011-2020.”

Medical malpractice victim rights advocates criticize the report, noting that the report relied heavily on a survey of Maryland hospitals to inquire about their liability claims but the report failed to provide the results of that survey in the report. Furthermore, they argue that publicly available data, including data provided by the Maryland Insurance Administration, National Association of Insurance Commissioners, and the National Practitioner Data Bank, do not indicate that Maryland’s MPL is worse than other state’s MPL market experiences.

Victim rights advocates also cite the September 1, 2020 “2020 Report on the Availability & Affordability of Health Care Professional Liability Insurance” prepared by the Maryland Insurance Administration that concluded, “The market continues to be relatively stable but remains concentrated with 56% of the written premium acquired by two (2) insurers. Premium rates were stable again this year across the market as a whole and within the two (2) largest market share insurers. The stable rate environment and the continuing availability of coverage in the Maryland market are positive indicators for health care providers. Likewise, the closed claim and filed lawsuit numbers remain substantially below peak levels of 2012 – 2013. This should encourage potential risk bearers that have declined to enter or expand their presence in the Maryland market during the previous times of less stability to take advantage of growth opportunities within the State.” Source

What the HSCRC-submitted report fails to analyze let alone mention is the catastrophic effects on the most seriously injured innocent victims of medical malpractice if the severe tort reforms in other states discussed in the report were instituted in Maryland. While reducing medical malpractice insurance rates is a laudable goal when considered in a vacuum, the suggested medical malpractice tort reform measures proposed in the report put hospitals profits over the well-being of their patients who have been harmed by avoidable medical errors committed in the hospitals. The report’s statement that ‘[v]arious studies have shown that “damages caps reduce liability insurance premiums”” fails to mention the obvious: many medical malpractice victims are not fully compensated for the harms they suffered due to draconian damages caps unfairly imposed on their right to obtain justice. Equally important, there is much less incentive for hospitals to provide safe and appropriate medical care to patients if the financial incentives to do so are drastically reduced by limiting their financial responsibility for the avoidable harms they cause.

If you or a loved one have been harmed by a doctor, hospital, or other health care provider in Maryland or in another U.S. state, you should promptly seek the advice of a Maryland medical malpractice lawyer, or a medical malpractice lawyer in your state, who may investigate your medical malpractice claim for you and represent you or your loved one in a medical malpractice case, if appropriate.

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