Cheaper Malpractice Rates

September 1, 2004

We have had huge increases in our malpractice rates. Rates in a neighboring state are cheaper. Can we hold a primary office in a state with lower malpractice rates while also practicing here — and would that impact our rate?

Question: We have had huge increases in our malpractice rates. Rates in a neighboring state are cheaper. Can we hold a primary office in a state with lower malpractice rates while also practicing here - and would that impact our rate?

Answer: It probably would not impact your rate in a positive way, unfortunately. Any medical malpractice insurance company would probably still rate your practice as if it were wholly in the original, more expensive state because that is where the insurer's primary risk is. However, if your physicians provided service exclusively in that other state and almost exclusively to patients from that state, then your group could probably get the cheaper rate.

You may want to contact the medical society in the next state to get a list of which carriers are licensed to cover malpractice there, and contact them to determine their coverage and costs.