Maryland to create insurance rate stabilization fund: aimed at curbing malpractice premiums.(News)

As physicians push for professional liability reform at the national level, the Maryland legislature signed off on a bill aimed at halting rising malpractice premiums.

The centerpiece of the legislation is a rate stabilization fund for medical professional liability insurance that will be financed through a tax on HMOs.

The Maryland State Medical Society (MedChi) and the Maryland Hospital Association estimate that the fund would cover about 95% of the increase in premiums for 2005. Obstetricians in Maryland are paying about $120,000-$160,000 for insurance coverage this year.

Maryland physicians have been pushing hard for reform--especially since last fall, when the state's largest malpractice carrier, Medical Mutual of Maryland, said it would raise its premium rates in 2005 an average 33%. The move follows a 28% increase a year ago.

Maryland is considered a medical liability insurance crisis state by the American College of Obstetricians and Gynecologists. And physicians of all specialties in the state are choosing to lay off staff, close practices, or move, in order to deal with the malpractice problem, according to MedChi.

The new legislation was passed in dramatic fashion during an end-of-the-year special session called by Gov. Robert Ehrlich. But he objected to the HMO tax and said the bill didn't contain meaningful tort reform. He then vetoed the measure in January, but legislators returned to work to override the veto.

The saga is expected to continue as Mr. Ehrlich prepares to introduce other legislation with more comprehensive reforms.