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Malpractice premiums: Soaring again

Article

Average rates for internists are up nearly 25 percent, with more increases likely for next year.

 

Malpractice premiums: Soaring again

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Choose article section...Where internists pay the highest and lowest rates

Average rates for internists are up nearly 25 percent, with more increases likely for next year.

By Berkeley Rice
Senior Editor

The malpractice mess just keeps getting worse. Some internists in Miami are paying $56,000 in professional liability premiums this year. And more rate hikes are on the way.

Average rates for internists nationwide jumped nearly 25 percent in the 12 months ending in July 2002, according to a recent comprehensive survey conducted by Medical Liability Monitor, a newsletter that covers the malpractice insurance industry. (The year before, rates rose an average 10 percent.) In some areas, rates are up nearly 100 percent.

Although the average premium for internists nationwide is just over $12,000, in big cities, rates run much higher: close to $46,000 in Detroit, $32,000 in Chicago, and in the low-20s in Cleveland, Las Vegas, and Los Angeles. Some suburban physicians are feeling the sting as well. Internists on Long Island, NY, pay more than $21,000—a higher tab than their peers in New York City.

But if the dollar amounts are staggering in big cities, the rate hikes may be most dramatic in some rural states: 99 percent in Mississippi, 90 percent in Arkansas, 50 percent in New Hampshire, and 36 percent in Tennessee. Internists in Texas' rural Rio Grande Valley are paying more than $26,000—more than some colleagues in Dallas and Houston.

What's causing the rise in premiums? Liability carriers have been hit by an increasing number of huge jury awards, rising reinsurance rates since 9/11, and declining returns on investment due to the stock market slump. As a result, a number of companies have left the malpractice market; others have scaled back their operations and are no longer writing out-of-state coverage. Many carriers have also become more selective, and are imposing stricter underwriting standards.

"Physicians who lost their insurers have had to scramble for replacement coverage," says Carol Brierly Golin, MLM editor. "And when they do find it, the prices are often much higher than their previous premiums." Insurers told MLM they believe prices will continue to climb into 2003.

 

Where internists pay the highest and lowest rates1

State
Highest rate reported
Area where rates are highest
% increase from 2001
Lowest rate reported
% increase from 2001
Alabama
$6,806
Entire state
No change
$6,043
No change
Alaska
10,619
Entire state
No change
6,948
No change
Arizona
12,782
Entire state
13%
12,782
13%
Arkansas
7,189
Entire state
90
4,031
40
California
21,157
Los Angeles area
7
4,919
8
Colorado
9,845
Entire state
6
8,876
15
Connecticut
13,820
Entire state
40
7,405
20
Delaware
8,607
Wilmington area
No change
4,204
N.A.
Dist. of Columbia
13,186
Entire District
11
11,260
26
Florida
56,153
Miami area
46
15,460
51
Georgia
10,392
South Georgia
18
4,712
No change
Hawaii
7,156
Entire state
5
7,156
5
Idaho
7,389
Entire state
18
3,428
8
Illinois
31,722
Chicago
13
9,038
No change
Indiana
5,598
Chicago area
51
3,151
25
Iowa
9,169
Entire state
29
4,374
No change
Kansas
6,082
Entire state
6
3,522
No change
Kentucky
8,320
Louisville area
4
7,235
(–7)
Louisiana
7,344
New Orleans area
15
6,386
15
Maine
6,672
Entire state
8
4,981
9
Maryland
11,083
Baltimore area
1
5,740
1
Massachusetts
9,356
Entire state
11
9,356
11
Michigan
45,761
Detroit area
14
13,708
8
Minnesota
5,897
Entire state
No change
3,803
8
Mississippi
8,264
Entire state
99
4,786
10
Missouri
11,572
St. Louis & Kansas City areas
17
7,655
No change
Montana
7,905
Entire state
3
7,016
No change
Nebraska
3,469
Entire state
9
2,786
23
Nevada
23,628
Las Vegas area
50
10,600
(–14)
New Hampshire
8,316
Entire state
50
5,589
N.A.
New Jersey
13,620
Entire state
9
9,803
No change
New Mexico
7,802
Entire state
42
7,802
42
New York
21,648
Long Island
No change
6,102
No change
North Carolina
8,454
Entire state
37
5,378
50
North Dakota
6,712
Entire state
1
5,427
15
Ohio
22,592
Cleveland area
60
9,357
9
Oklahoma
3,317
Entire state
4
3,317
4
Oregon
8,483
Entire state
No change
3,812
2
Pennsylvania
10,993
Philadelphia area
40
6,047
40
Rhode Island
7,845
Entire state
9
7,243
No change
South Carolina
5,745
Entire state
40
5,745
40
South Dakota
5,395
Entire state
20
2,906
15
Tennessee
8,802
Entire state
36
5,041
20
Texas
26,334
Rio Grande Valley
3
10,183
40
Utah
10,569
Entire state
25
7,920
35
Vermont
5,472
Entire state
13
4,087
7
Virginia
10,228
Washington, DC, area
77
2,920
No change
Washington
9,779
Entire state
9
6,666
4
West Virginia
18,477
Entire state
N.A.
8,527
10
Wisconsin
5,993
Entire state
No change
4,465
N.A.
Wyoming
14,832
Entire state
38
14,832
38

N.A.: not available.

1Except when otherwise noted, rates are for mature claims-made policies offered by various carriers for $1 million/$3 million coverage as of July 1, 2002. 2For $1 million/$4 million. 3Indiana rates are for $250,000/$750,000. Doctors pay a surcharge for $750,000/$1.25 million in coverage from the state's excess liability fund.4Kansas rates are for $200,000/$600,000. Doctors pay an 18 to 20% surcharge to a state fund for excess coverage. 5Louisiana rates are for $100,000/$400,000. Doctors pay a 57 to 65% surcharge to a state fund for excess coverage. 6Nebraska rates are for $200,000/$600,000. Doctors pay a 35% surcharge to a state fund for excess coverage. 7New Mexico rates are for $200,000/$600,000. Doctors pay an 87% surcharge to a state fund for excess coverage. 8Pennsylvania rates are for $500,000/$1.5 million. Doctors pay a 51 to 68% surcharge for $400,000/$1.2 million in excess coverage from a state fund. 9South Carolina rates are for $200,000/$600,000 in primary coverage, and include a $3,207 surcharge for unlimited occurrence coverage provided by the state. 10Wisconsin doctors pay a $1,500 to $9,000 surcharge to a state fund for excess coverage.

All figures are based on the 2002 Rate Survey published by Medical Liability Monitor. Rates do not reflect discounts, dividends, or other factors that may reduce or offset increases, nor do they include surcharges imposed due to recent claims or other underwriting factors. This chart lists rates only for companies that responded to MLM's survey. Copies of the full report are available from MLM by phone at 312-944-7900, by fax at 312-944-8845, or by e-mail at cptmdgolin@aol.com.

 

Berkeley Rice. Malpractice premiums: Soaring again. Medical Economics Dec. 9, 2002;79:51.

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