The Illinois General Assembly just adopted a Bill providing for medical malpractice reform in Illinois. The Governor is expected to sign the Bill. Its provisions will become effective upon signature by the Governor.
Some provisions of the Bill - e.g., those limiting non-economic damages - have received widespread publicity. Other provisions of the Bill, which have received much less publicity, will affect ongoing operations of medical malpractice liability insurers in Illinois. The bill imposes the following requirements on these insurers regarding their rates:
- A medical malpractice liability insurer's rates are subject to much greater regulation than under current law. In this line of business, Illinois has abandoned its usual approach of relying on competition to establish the rates of insurers.
The Bill provides that the Secretary of Financial and Professional Regulation shall convene a public hearing on a company's rate, if either (a) 1% of a company.s insureds within a specialty or 25 of the company's insureds (whichever is greater) request a public hearing, (b) the Secretary at his or her discretion decides to convene a public hearing, or (c) the percentage increase in the insurer's rate is greater than 6%. The public hearing must be concluded within 90 days after the request, decision or increase that gave rise to the hearing.
The Secretary may request additional statistical data and other information necessary to determine the manner the insurer used to set the filed rates and the reasonableness of those rates. This data shall be made available to the general public.
The Bill amends the definition of excessive rates to exclude any requirement of a finding that a reasonable degree of competition does not exist.
The Secretary may, by order, adjust the rate or take other appropriate action at the conclusion of the hearing. The burden is on the insurer to justify the rate or proposed rate at the public hearing.
The Illinois Division of Insurance has acknowledged that its regulations must be amended to implement these requirements.
The Bill imposes additional requirements on medical malpractice insurers:
- The medical malpractice insurer must allow each of its medical liability insureds the option to make premium payments in quarterly installments.
- Each medical malpractice insurer is encouraged, but not required, to offer the opportunity for participation in a plan offering deductibles to its medical liability insureds, and to offer such insureds a plan providing premium discounts for participation in risk management activities. Any such plans must be reported to the Department.
- The medical malpractice insurer must give 180 days notice before the insurer discontinues the writing of medical liability insurance in Illinois.
- The medical malpractice insurer is required to provide to the Secretary additional loss information and additional actuarial information. Such information is to be made available to the Illinois General Assembly and the general public.
- All entities providing medical liability insurance (including captive insurers and risk retention groups) must provide notice to the Secretary of claims or suits for medically-related injuries filed after December 31, 2005. Records received by the Secretary are to be made available to the general public (excluding names or addresses of the parties to the claims or suits).
- The Secretary must establish a Professional Liability Insurance Resource Center containing information regarding each licensed insurer providing medical liability insurance.
Other portions of the Bill address other issues relating to medical malpractice, including the following:
- provisions limiting non-economic damages payable by a hospital or physician
- amendments regarding the Illinois State Medical Disciplinary Board
- a "Patients' Right to Know Law" providing for public disclosure of each physician.s profile
- provisions regarding expert witness standards
- provisions regarding the admissibility of expressions of grief or apologies by a health care provider
- provisions for guaranteed payment of future medical expenses and costs of life care by purchasing an annuity.
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