Obstetricians say decision renews crisis

Las Vegas Review-Journal

Just one day after Clark County obstetricians announced they would reopen their practices to new patients, their primary insurer said sky-high malpractice premiums would not change anytime soon.

Without lowered premiums, one doctor said Southern Nevada obstetrical offices again will be forced to close their doors to newly pregnant women.

“This is a big problem. How are we going to deliver the 21,000 babies that are going to be born (each year)?” said Dr. John Nowins, president of the Clark County OB/GYN Society. “This is going to cause doctors to leave obstetrics. Yes, I’m going to reopen my practice next week as planned, but I’m afraid I’ll have to shut back down again soon.”

Obstetricians said they again would welcome new patients in good faith that their malpractice insurance rates would be lowered in response to recent medical liability tort reform. But American Physicians Assurance, the company that insures the majority of the valley’s obstetricians, said Friday they would not lower rates this year or even next year.

“We’re not going to be lowering rates simply because we’ve had a bad history here in Las Vegas, and insurance prices are based on history,” said Dennis Coffin, a broker with the company. “But we do think rates will stabilize in the future, and we don’t expect to increase premiums.”

Most of the 93 doctors who deliver babies in Clark County began turning away newly pregnant women in May because they said they could no longer afford tiered malpractice premiums that increase as they deliver more babies.

Because of new liability laws passed last week during a special legislative session and approved by Gov. Kenny Guinn on Wednesday, the doctors announced Thursday they would start seeing new patients again.

The new laws cap medical malpractice jury awards at $350,000 for pain and suffering in most instances. Exceptions to the cap include cases of gross malpractice and when there is “clear and convincing” evidence that the award should exceed the cap.

The legislation was passed to stem the exodus of Southern Nevada doctors. Many were forced to shut down their practices, retire early or limit their services because they could no longer find medical malpractice insurance or afford their skyrocketing rates.

Surgeons resigned en masse from UMC’s Trauma Center because of the liability risks of life-saving procedures on critically injured patients. The resignations closed the trauma center for more than a week last month.

Sheila Wright, spokeswoman for American Physicians Assurance, said the company is encouraged by the new legislation, but she said the laws still have to stand up to court challenges.

“It’s irresponsible for us to adjust our rates until we know the effect of the legislation,” Wright said. “It’s not going to take three to five years to see the effect, but it will take a while for the law to work its way through the system.”

Six other states have passed caps on jury awards, only to have them struck down by their state supreme courts.

Guinn, however, has said the cap should pass Supreme Court muster because of exemptions that allow victims of gross malpractice to collect an unlimited amount of compensation.

The legislation also does not limit the amount an injured person can collect for medical bills or lost wages.

American Physicians Assurance also decided to continue charging doctors extra premiums if they deliver more than 125 babies a year, another blow to the obstetrical community.

Doctors say if they deliver fewer than 125 babies a year, they face annual malpractice premiums of about $80,000, twice their previous rate. Those who deliver between 125 and 175 babies will have to pay more than $100,000 per year in premiums.

The prices continue to rise for doctors who deliver more than 175 babies a year.

Clark County obstetricians delivered more than 23,000 babies last year, about 250 babies each.

Nowins said he will have to deliver 77 babies this year just to pay his malpractice premium. If he adds many more than that to try to pay his other bills and take home a paycheck, he’ll get stuck with even higher malpractice rates, forcing him to take on even more patients.

“Not only is there no rollback in premiums, there’s also no relief from the restrictions,” Nowins said. “Obstetricians are really screwed.”

Larry Matheis, executive director of the Nevada State Medical Association, said he hopes the insurance company’s decision doesn’t set the tone for others in the industry.

Although one doctor-owned company, the Nevada Mutual Insurance Co., has promised to lower rates soon, other companies still are reviewing the legislation and have not decided yet.

“American Physicians Assurance has indicated that they do not think the legislation will work in the short term,” Matheis said. “I think that’s unfortunate, and I also think they are wrong.”