Relates to primary medical malpractice insurance coverage

BILL NUMBER:S3454

Title of bill

An act to amend chapter 266 of the laws of 1986, amend- ing the civil practice law and rules and other laws relating to malprac- tice and professional medical conduct, in relation to terms of insurance coverage

Purpose or general idea of bill

The purpose of this bill is to amend the Excess Medical Malpractice Liability Insurance Coverage Program (created by Chapter 266 of the Laws of 1986) to lower the primary medical malpractice layer required to be eligible for the Excess Program from its currently required level of $1.3 million for each claimant/$3.9 million for all claimants to $1M for each claimant/$3M for all claim- ants.

Summary of specific provisions

Section 1 of the bill amends paragraph (a) of subdivision 1 of § 18 of Chapter 266 of the Laws of 1986 (as amended by § 15 of Part C of Chapter 59 of the Laws of 2011) to change the required level of primary medical malpractice coverage that a physician or dentist must have in force in order to be eligible for the NYS Excess Medical Malpractice Liability Insurance Coverage Program. Currently the required level is $1.3M for each claimant/$3.9M for all claimants, this legislation would change the level to $1M for each claimant/$3M for all claimants. The total aggre- gate coverage level will remain $2.3M for each claimant/$6.9M for all claimants.

Section 2 is the effective date.

Existing law

The NYS Excess Medical Malpractice Liability Insurance Coverage Program was created by Chapter 266 of the Laws of 1986 and was last amended by § 49 of Part A of Chapter 58 of the Laws of 2007.

Justification

The Excess Medical Malpractice Liability Insurance Coverage program was created in 1996 to help stabilize the cost of medical malpractice liability insurance in NYS, which was already high and skyrocketing during the mid-1980's. It was felt that such stability would be critical to preserving access to physicians, especially high- risk specialty care practitioners. It was feared that, without such stability (or outright tort reform), these doctors would leave NYS prac- tice as a result of high premiums and malpractice litigation.

The Excess Program has been extended for varying periods (usually 1-3 years) since its inception. The funding mechanism for the program has changed several times and in 2002 was made a component of the Health Care Reform Act (HCRA) and funded from the HCRA Pools. Concomitantly with moving the funding source of the Excess Program to HCRA, the required level of primary medical malpractice coverage that a physician or dentist must have in force in order to be eligible for Excess cover- age was increased from $1M for each claimant/$3.M for all claimants to

$1.3M for each claimant/$3.9M for all claimants: While this lessened the Premium cost that HCRA was obligated to cover and made more funds avail- able for other HCRA programs, it raised the cost of primary medical malpractice coverage to physicians and dentists by approximately 60. This bill would return the primary coverage requirement to its pre-2002 level of $1M for each claimant/$3M for all claimants and is expected to reduce physician and dentists primary medical malpractice premiums by 'approximately 6% which would ease the burden that these providers are bearing due to rapidly escalating medical malpractice premiums.

Prior legislative history

2008: S.7038 Passed Senate/Assembly Codes Committee 2009-10: S.2959 Insurance Committee 2011-12: S.4446 Insurance Committee

Fiscal implications

The cost to HCRA is estimated to be between $45M and $65M.

Effective date

Immediately.