The amount of money physicians will pay for medical malpractice insurance and the likelihood of being sued are largely determined by where they choose to practice. For instance, malpractice insurance rates are based on how much is paid out in each state territory (most states have multiple territories) for each medical specialty.
“The more likely there are to be malpractice payouts in a territory, the higher the cost of medical malpractice insurance in that state territory,” says Mike Matray, editor, Medical Liability Monitor, based in Chicago. “A physician’s malpractice insurance rate will increase depending on the number of claims against him or her. The (rate) amount can decrease if a physician is claim free and has taken risk management courses that medical malpractice insurers offer.”
Malpractice insurance rates are also heavily based upon a state’s tort reform laws, which vary among states and generally make it more difficult for a patient to sue a doctor. For example, before going to court states such as Pennsylvania, New Jersey, Delaware, and Michigan, among others, require a certificate of merit, whereby a doctor in the same specialty as the physician being sued indicates what the physician did as grounds for malpractice. “If the patient can’t get a doctor to write a certificate of merit, the court case can’t proceed,” Matray says.
Another example of tort reform involves medical review panels that are used in some states, such as Massachusetts, Hawaii, Indiana, and Kentucky. Before patients can access the legal system, a panel that is usually comprised of two doctors and an attorney will evaluate their claim. The panel will review the case and give their opinion on whether or not malpractice occurred. If they believe the case has merit, it will proceed to court. If not, the suit can still proceed, but the panel’s opinion is admissible as evidence for the defense at trial.
Statutes of limitation, which state the timeframe that a suit can be filed, also play a role in how likely physicians are to get sued. “The longer the statute of limitation, the more likely a claim will be made,” Matray says. States with shorter statutes of limitations will generally have lower malpractice insurance costs.
Damage caps set by states are yet another factor that come into play. They refer to the amount patients can win for damages. The lower the cap, the more difficult it will be for patients to find an attorney to take their case because attorneys mostly take medical lawsuits on contingency. Attorneys will front the money to file the case, and if the attorney wins, she will split the amount of the winnings with the patient. “This is a big gamble, because more than 80 percent of defendant physicians win their cases,” Matray says.
Peter Carrazzone, MD, FAAFP, a family physician in Haledon, N.J. and president of the New Jersey Academy of Family Physicians, says 38 percent of states don’t have damage caps on malpractice lawsuits.
A state’s regulations and related complexities are just one more reason why physicians should implement policies and procedures that can help them from getting sued in the first place.