Provides medical malpractice insurance premium discounts for physicians and hospitals for utilization of certain electronic health record technology

BILL NUMBER:S8074A

Title of bill

An act to amend the insurance law, in relation to medical malpractice insurance premium discounts for physicians and hospitals for utilization of certain electronic health record technology; and to repeal certain provisions of such law relating thereto

Purpose or general idea of bill

To assist medical practice insurers; and, to encourage physicians to utilize Electronic Medical Records (EMRS) as a way to reduce medical errors, and minimize unnecessary and costly treatments or tests.

Summary of specific provisions

Section of the bill repeals section 1325 of the Insurance law and adds a new section 1325 to exempt medical malpractice insurance companies from the provisions of law relating to the risk based financial standards applying to all property casualty insurance companies pursuant to section 1324 of the insurance until December 31, 2015 law.

Section two of the bill adds a new section 1326 to the Insurance Law to allow carriers to limit the application of contingent liabilities to the financial statements of medical malpractice insurers.

Section three of the bill amends subsection (c) of section 2343 of the insurance law to extend certain prohibitions on requests for orders of rehabilitation or liquidation for medical malpractice insurance carriers until December 31, 21015.

Section four of the bill amends section 2343 of the insurance law by adding a new subsection (f).

Justification

Medical malpractice insurance is a unique business in New York. The vast majority of the state's medical malpractice insurance capacity is provided by admitted, single-state, mono-line insurance carriers, most of which are mutuals or reciprocal insurers that are owned or controlled by physicians which provide medical malpractice coverage to physicians. However, in addition to financial challenges, these insurers, admitted in New York State, have been confronted with mounting competition from Federally sanctioned out-of-state Risk Retention Groups which are less regulated than New York admitted carriers. These Risk Retention groups may be able to provide cheaper medical malpractice coverage in the short term, but may not have the financial wherewithal to pay claims over the long term.

This bill modernizes the Insurance Law as it relates to medical malprac- tice insurance. It recognizes the unique place that medical malpractice insurance holds in the provision of health care in New York. Further, the unique financial realities of these carriers which are mono-line,

doctor-owned entities where premium cost controls and continuity in the availability of coverage are primary business objectives.

This legislation also would encourage physicians to utilize Electronic Medical Records (EHRS) as a way to reduce medical errors, and minimize unnecessary and costly treatments or tests. The measure will reward doctors who comply with new EMR benchmarks with a discount on their medical malpractice insurance premiums. In the U.S., medical errors are estimated to result in 44,000 to 98,000 unnecessary deaths and 1,000,000 excess injuries each year, all which drive up the cost of health care. The American Recovery and Reinvestment Act of 2009 (known as the Federal Stimulus Package) has a $19 billion program to promote the adoption and use of health information technology (HIT) and especially electronic health records (ERRs).

Prior legislative history

New bill.

Fiscal implications

None.

Effective date

This act shall take effect immediately, provided, however, that the provisions of section 4 hereof shall take effect one hundred twenty days after having become law.