Malpractice bill now targets insurance regulation

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A bill that would increase damage awards in malpractice lawsuits has changed – dramatically.

As first introduced, House Bill 1344 raised non-economic damages cap on malpractice suits from $300,000 to $460,000. But, bill sponsors scrapped the cap-increase portion of the bill after failing to find enough support for it.

As it’s worded now, the bill would require insurance companies to undergo an extensive review if they want to raise rates by 5 percent or more.

“They basically gutted their own bill,” said Dr. Ted Clarke, chief executive officer of COPIC, Colorado’s largest medical malpractice insurance company. “One has to wonder why the trial lawyers association is driven to change the bill so dramatically.”

The bill now seems to target COPIC specifically, Clarke said. The insurance carrier covers 6,000 doctors – about 51 percent of the market – against medical malpractice.

But they don’t really have reason to change the current law, he said. Pulling from data from the Department of Insurance for the past five years, Clarke said the company has not received a single complaint about its rates.

“It’s a solution looking for a problem,” he said. “It basically says that medical liability companies cannot increase rates when awards increase.”

But the Colorado Trial Lawyers Association believes the bill is necessary and important.

“We believe that oversight of a monopolistic insurance company is in the best interest of consumers,” said John Sadwith. “They continually go to the legislature and say that an increase in caps, or any change to the Health Care Availability Act – will result in higher premiums. We don’t know that. There’s no transparency – we can’t question it. They can do whatever they want.”

Both sides are prepared for a fight, Sadwith said.

“No insurance company has ever not fought regulation,” he said.