- The Washington Times - Wednesday, December 29, 2004

ANNAPOLIS — The state Senate yesterday approved a medical malpractice insurance reform bill that would end a tax exemption for health maintenance organizations (HMOs), a move Gov. Robert L. Ehrlich Jr. has promised to veto.

Under the Senate plan, the HMO tax is expected to generate as much as $70 million that would pay for a 33 percent increase in doctors’ malpractice insurance premiums. The House was expected to pass a bill with a similar measure.

Both chambers of the General Assembly rejected the governor’s bill, which called for covering doctors’ higher insurance premiums with revenue from the state’s general fund and placing strict limits on malpractice lawsuits.

Mr. Ehrlich, a Republican, expressed displeasure with the direction taken by the Democratic-controlled General Assembly in the special session he had called to head off a health care crisis in the state.

“Things downstairs are progressing clearly in the wrong direction, particularly in the Senate, where the base bill is now no tort reform and a tax,” Mr. Ehrlich said. “Republicans are united against it. There are many Democrats for it, some Democrats are against. It is worth fighting this fight.”

The governor said that if the malpractice insurance reform plan drafted by Sen. Brian E. Frosh reaches his desk, the issue will linger until the beginning of the regularly scheduled legislative session on Jan 12.

“My goal is to do the right thing, not make everybody happy,” he told reporters as the Senate approved Mr. Frosh’s bill 32-14 in a party-line vote. “And we meet again in two weeks, so a lot of the policy provisions being hashed out you will see again.”

Mr. Ehrlich said he had promised Senate President Thomas V. Mike Miller Jr. that the “original bill will be waiting for him the first day” of the legislative session if the Senate passed Mr. Frosh’s plan.

What’s more, he said House Speaker Michael E. Busch’s decision to file a bill that includes a 2 percent tax on HMO premiums was a “surprise.”

“And that’s not a good thing,” said Mr. Ehrlich, who called for the special session this month after having reached an agreement on the issue with Mr. Busch and Mr. Miller. “On the other hand, the speaker’s bill is fairly close to our bill and close to the spirit of the letter of the agreement without the HMO tax. Obviously, we agree to disagree in that.”

Mr. Busch, whose bill was headed for passage last night, offered an alternative plan that features tort-reform proposals more stringent than Mr. Ehrlich’s.

“The governor has not yet addressed a funding source outside the general fund,” the House speaker said yesterday. “Give us another option of any funding source. We are not wedded to the HMO tax. If there is a better solution, we will look at it.”

Mr. Miller, a trial lawyer who has resisted Mr. Ehrlich’s efforts to restrict malpractice lawsuits, could not be reached for comment yesterday.

The Senate bill does not include some of the restrictions on malpractice lawsuits, called tort reform, proposed by the governor.

A disagreement over the HMO tax means the special session could drag on well into the week.

This is the first special session in Maryland since a budget-focused session was held in 1992.

The special session will cost taxpayers $45,000 a day, according to a study by the state’s Department of Legislative Services.

Lawmakers will consider how to consolidate both plans today.

The governor’s plan would cap pain and suffering awards at $650,000 for the next three years.

The Ehrlich bill also would provide $24 million in Medicaid reimbursement payments to obstetricians, neurosurgeons, orthopedists and emergency-room physicians — specialties with the highest malpractice insurance premiums — and would increase other reimbursements to doctors who have complained of late payments.

Medical Mutual Liability Insurance Society of Maryland — the state’s largest insurer of doctors — last week released figures that indicate that physicians are paying their higher premiums, despite assertions by doctors that they would protest the rates.

As of last week, “6,144 premiums were paid, compared to 6,154 at this time a year ago,” the Associated Press reported.

State regulators have authorized Medical Mutual to raise its malpractice insurance premiums by 33 percent this year, after having increased them by 28 percent in 2003 and 10 percent in 2002.

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