Blaming the insurance industry for medical malpractice insurance premium hikes, Senate Democrats on Tuesday introduced a bill that would limit the industry's exemption from federal antitrust laws.
Sen. Patrick Leahy (D-Vt.), the lead sponsor of the legislation, attacked assumptions by physicians, congressional Republicans and the Bush administration that malpractice rate hikes stem from excessive awards that need to be addressed by a cap on noneconomic damages.
The Bush administration is "ignoring the central truth of this crisis--that it is a problem in the insurance industry, not the tort system," Leahy says in a statement. "A cap of $250,000 would arbitrarily limit compensation that the most seriously injured patients are able to receive."
Leahy's bill would repeal med mal insurers' antitrust exemption under the 1948 McCarran-Ferguson Act, but only for "the most pernicious antitrust offenses: price fixing, bid rigging, and market allocations," the statement says.
Leahy says the bill is co-sponsed by Sens. Edward Kennedy (D-Mass.), Richard Durbin (D-Ill.), John Edwards (D-N.C.), John Rockefeller (D-W.Va.), Harry Reid (D-Nev.), Barbara Boxer (D-Calif.), Russell Feingold (D-Wis.) and Jon Corzine (D-N.J.).
But Physician Insurance Association of America, which represents physician-run med mal insurance carriers, says altering McCarran-Ferguson would not resolve malpractice coverage problems because the industry does not engage in price fixing or the other actions mentioned by Leahy.
Lisa Cole, spokesperson for the Rockville, Md.-based organization, says the industry's exemption helps carriers share past claims data and "sharing information on a retrospective basis is not price fixing."
A statement from the PIAA adds that "the pooling of industry data through independent statistical agencies serves to reduce uncertainty and provide new and established insurers with sufficient industry data to measure past losses upon which future rates will be determined."
It also says "most medical malpractice insurers do not rely on such pooled industry data to determine their rates. Fewer than half of the medical malpractice specialty carriers report limited data to a statistical agency, and only one of 40 specialty carriers surveyed even receives data from a statistical agency."