Archive for Friday, May 4, 1990

SURCHARGE RATE FOR MALPRACTICE FUND WILL DROP

May 4, 1990

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The recent good news for many Kansas doctors that their medical malpractice insurance rates will drop was followed by more good news this morning when it was announced that a surcharge they pay to the state will decrease as well.

Kansas Insurance Commissioner Fletcher Bell announced today an average 13 percent reduction in the surcharge rates for the Kansas Health Care Stabilization Fund. Doctors pay into the fund to cover additional malpractice insurance above what is provided by insurance companies.

Determined as a percentage of insurance premiums, the surcharge is often higher than malpractice insurance itself, so some doctors value the drop in the surcharge rate more than the recent decrease in insurance rates.

Earlier this week, Bell announced that he had approved a nearly 21 percent decrease in medical malpractice rates for doctors who are insured by St. Paul Fire and Marine Insurance Co., St. Paul, Minn. The decrease affects about 40 percent of Kansas doctors in private practice, or 1,200 physicians. The new insurance rates and the new surcharge rates will go into effect July 1.

Bob Hayes, spokesman for the Kansas State Insurance Office, said the drop in the insurance rates probably reflected a decrease in the number of malpractice suits being filed and won. He said it was not uncommon for drops in insurance rates, which provide primary coverage, to be accompanied by drops in the state surcharge rate.

"Improved primary risk should also presume improved excess risk," he said.

Bell's office estimated that the combined effect of the two rate decreases could lower insurance costs by 22 percent for doctors in family practice, 28 percent for doctors in neurology and 52 percent for ear, nose and throat doctors.

Bob Wagner, business manager for Lawrence Family Practice Center, said the rate decreases were "greatly appreciated." However, he said, insurance rates in the past have fluctuated drastically from one year to the next, and he hopes the surcharge and insurance rates will stay down for an extended period of time.

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