Crisis In Medical Malpractice Insurance
 
September 20, 2002
 

Physicians in Florida, as well as those in many other states, are experiencing what is being called “the perfect storm.”  This storm is brewing because physicians are unable to obtain medical malpractice insurance.  Either they cannot afford the premiums, or they cannot find an insurance company willing to offer coverage. 

An alternative to maintaining medical malpractice insurance that has become increasingly more popular among Florida physicians  is “going bare.”

In Florida, each licensed medical doctor is required to comply with the financial responsibility requirements of Florida Statute 458.320 (the Act). The Act requires a physician to demonstrate (primarily by written representation), to the Board of Medicine and the Florida Department of Health, that he or she is able financially to pay claims arising out of rendering medical care or services to their patients, or in the alternative, the Act requires the physician to discontinue his or her services to their patients.

In essence, by "going bare," the physician becomes his or her own insurer, and accepts financial responsibility for any and all malpractice claims brought against him or her, as well as all defense costs, in lieu of carrying medical malpractice insurance coverage. If the physician decides to go bare, he or she must consider keeping sufficient assets available or patients could claim they were deceived by representations of financial responsibility.

Physicians have been relying on Florida’s liberal asset protection laws to protect their own personal assets from collection if they are involved in a medical malpractice suit. Federal bankruptcy protection may soon be severely restricted if the new legislation, which has passed both the U.S. House of Representatives and Senate in separate versions and is currently awaiting the appointment of a conference committee to create a final version, comes to fruition. The legislation that is being considered contains the most sweeping bankruptcy reforms in more than 50 years and will have a tremendous impact on Florida physicians who are using bankruptcy in conjunction with "going bare."

We are continuing to research these issues, as well as striving to create other alternatives, including “risk pools” where hospitals and physicians would cooperate in an effort provide appropriate medical malpractice insurance.  We anticipate releasing an article that will be of benefit to all interested parties in the very near future.