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.
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