University of Nevada Medical School Will Not Participate in Revised Medical Malpractice Insurance Plan

University of Nevada School of Medicine officials said that they will not participate in the revised Medical Liability Association of Nevada -- a state program established to help doctors meet their medical malpractice insurance costs -- and plan to select one of three private insurers to cover medical residents and the 250 full-time and 150 part-time physicians employed at the medical school, the Las Vegas Sun reports. Private malpractice insurance for the medical school, which will lose coverage at the end of the month, will cost an estimated $2.1 million per year, according to Jon Hansen, a risk manager for the University and Community College System of Nevada. The Sun reports that Gov. Kenny Guinn (R) had hoped the medical school would participate in the revised version of MLAN that he announced last week, a plan developed in part to help the school (Knight, Las Vegas Sun, 6/3). Guinn established MLAN in March after Minnesota-based St. Paul Cos., which had provided malpractice insurance to about 60% of Nevada doctors, announced last December that it would no longer sell malpractice insurance. Under the program as originally proposed, doctors could purchase malpractice insurance from the state for about $36,000 per year. However, doctors who participated in the program had to purchase prior acts coverage -- which requires a one-time payment to their former malpractice insurer equal to about twice the cost of their annual premiums -- to cover unreported incidents subsequent to the termination of a policy with the company. Under the revised program, the state will cover the cost of prior acts coverage for doctors (California Healthline, 5/31).

University officials said they "didn't even get a price quote from the state plan" because it "could have doubled" their premiums. A provision in MLAN allows malpractice insurers to charge doctors a second premium "if the insurance company paid out too much in malpractice claims and lost money," Bruce Heffner, chief insurance assistant for the Nevada Insurance Commissioner's Office, said, adding that the new plan would charge doctors 10% more if they wanted to "guarantee a fixed cost for the year." The medical school will now have to ask the state to cover the cost of private malpractice insurance, which will have $1 million in increased premiums. Guinn, who chairs the state Board of Examiners -- which must approve state expenses before they move to the state Legislature's Interim Finance Committee for consideration -- will "have a final say" on whether the state will cover the medical school's premiums, the Sun reports (Las Vegas Sun, 6/3).