Issue:  2007-04-03

Radiologists Lose Malpractice Subsidies

♦ New Jersey

TRENTON, N.J., April 3 – Diagnostic radiologists will no longer qualify for state malpractice insurance premium subsidies because their insurance costs have gone down.

But neurosurgeons and obstetrician/gynecologists will continue to receive the subsidies because their premiums have increased.

The recommendations were issued by Insurance Commissioner Steven Goldman and are open for public comment until April 13.

The three year old program is scheduled to end this year.

It was created by the Democratic-controlled Legislature as a substitute for limiting court awards for medical malpractice liability. The subsidy program is designed to help physicians pay their premiums and to keep high-risk specialists from leaving the state because of the high costs of malpractice liability insurance.

The New Jersey Medical Society, the major lobby for the 18,000 physicians in the state, contends the way to control liability costs is to limit court awards.

Judith Martin Waterman, communication manager for the New Jersey Medical Society, said of the latest development, First it should be made clear that we have never been involved with the states selection of the specialists who would receive subsidies. We always have believed that the subsidy fund was not a cure, but a bandage. We do, however, appreciate the states recognition of the severity of this problem.

The subsidies last year totaled $15.7 million and went to 1,272 doctors.

The plan to drop diagnostic radiologists began when the latest statistics showed that their average reported premium dropped $193 between 2005 and 2006, according to the Insurance Department. The department said the updated average base rate for radiologists is $40,457. Last year, 463 diagnostic radiologists each received a $5,753 subsidy.

The proposal this year is to increase the subsidies for neurosurgeons and obstetricians/gynecologists.

According to the department, the average base rate premium this year for a neurosurgeon is $135,247, an increase of $5,410 from the 2006 figure. Last year, 74 neurosurgeons each received $17,821 in subsidies.

For obstetricians/gynecologists, the average base premium rates were $117,419, an increase in one year of $7,620. Last year, 735 obstetricians each received a subsidy of $16,006.

The proposals for the approximate $16 million subsidy program were outlined in a public notice and are open to public comment until April 13.

The subsidy program is funded by a special tax of $75 on 108,000 professionals that include lawyers, doctors, dentists, chiropractors, and optometrists. In addition, there is a $3 surcharge on employers in the state for each worker paying into the unemployment compensation fund. That surcharge covers six million workers.

The special tax also raises about $7 million for charity costs in hospitals and $1 million in student loans to obstetricians and gynecologists who, in return for the loans, pledge to have their practice in the state.

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