TRENTON, N.J., April 25 – The state Insurance Department is proposing to give higher subsidy payments todoctors with high insurance costs when it doles out funds later this year to helpdoctorspay their medicalliability insurance premiums. The proposal is outlined inPRN 20006-101, now open for comments untilJune 2.

The first payments under the novel plansaw 1,200physicians each receive the same stipend "$11,000 " regardless of what their insurance policy cost.

The subsidies last fall only went to neurosurgeons, obstetric gynecologists and diagnostic radiologists who read mammograms. Those specialists were selected not only because of their high yearlypremiums, but also to keep them fromshutting down their practices in New Jersey.

Blanket Subsidy Not Helping

Thedepartment said paying the same subsidy to all, however, had less of an ameliorative effect on eligible practitioners in those classes which had the greatest average expenditure for insurance.

Because of that, the department is proposing a new formula that would givelarger subsidies proportionate to whatthey spend as a class for insurance. The new formula is in response to concerns raised by the interested parties, it was explained.

The subsidyplan is an outgrowth ofthebattle between the then-McGreevey administration and the 18,000 physicians in the state who lobbied for limits on court awards inmedical liability cases. TheDemocrat-controlled Legisla-ture refused to impose limits on court awards, and instead installed a three-year subsidyplan to help doctorspay their premiums.

The allotments going outlater thisyear will be the second payment. Thesubsidies, it turns out, represent only six percent of what liability insurance premiums cost to thehigh risk specialists selected for the subsidy, according to the New Jersey MedicalSociety.

Last year the premium for neurosurgeons was about $150,000; for obstetricians/gynecologists: $110,000; and for diagnostic radiologists: $31,000.

In return for the subsidies, the physicians agree to practice in the state for two years. The money comes from a special fund where doctors, lawyers, dentists, chiropractors, optometrists, and other health care providers are taxed $75 a year.