There are a number of reasons why the West Virginia Medical
Association has teamed up with an insurance company, Medical
Assurance, to allege that meritless malpractice claims are driving up
insurance rates for doctors.
More than 690,000 reasons, actually. And they're supposed to be
Medical Assurance has paid the state Medical Association
at least $115,000 a year since 1995, or an estimated $690,000 to date, as
part of a confidential agreement.
This secretdeal requires association members to lobby
legislators on the company's behalf - as they did during last week's White
Coat Day at the Legislature, and the catered legislative reception the
As part of this agreement, Medical Assurance offers individual
doctors reasons to lobby. Association members can reap a share of the $208
million company's annual profits, as well as a series of breaks on their
premiums - provided they buy their policies from Medical Assurance.
In exchange for such perks, association members "shall assist
Medical Assurance, as requested," with fact-finding projects, while
the two groups "shall cooperate and assist each other in monitoring
proposed legislation and administrative regulations in West Virginia," the
There's more to the price tag. No other insurance company can
advertise or otherwise promote itself at association meetings or in its
journal, brochures and other publications, according to the agreement. The
articles or advertisements from Medical Assurance in its
publications when requested.
Medical Assurance has provided the information for the "talking
points" that association members have wielded when talking to reporters
and lawmakers. The points blame the insurer's rising rates on "the
frequency and severity" of mostly "meritless" lawsuits.
Few if any of the "talking points" are supported, however, by a Gazette
analysis of malpractice claims resolved in the last eight years, as
reported to the state Board of Medicine.
Medical Assurance has barred association members from disclosing
the agreement or its terms. The agreement, which is stamped "confidential"
across each page, can be shared with association members only on a
"need-to-know" basis, it says.
The Gazette obtained a copy after it was listed as an exhibit in a
December filing from Medical Assurance to the U.S. Securities and
As a business that sells stock to the public, Medical Assurance
is required to file such documents with the SEC. The insurance
giant's annual report to stockholders may shed more light on the current
Medical Assurance's report called low insurance premiums
"a disservice in the long run to insureds, investors and employees."
"We are also continually reviewing the adequacy of our rates in every
the rampant cost-cutting by shortsighted insurers seeking to gain market
reviews reveal the necessity of higher premiums."
Association members have also cited the talking points to allege that
West Virginia has among the highest costs racked up by an insurer to
defend a doctor against a malpractice claim. These tort costs force
insurers like Medical Assurance to raise the rates they charge
doctors, association members contend.
But Medical Assurance actually wants the highest tort costs of
any insurance company, according to the annual SEC report.
"In 1999 we continued to lead our industry in spending on the cost of
claims," Crowe boasts. "At first glance this may seem extravagant, but
take the time to understand the long-term benefits and you understand why
we are committed to the aggressive defense of claims."
As for those benefits, Crowe wrote, "We win more cases, discourage
frivolous lawsuits and build policyholder loyalty."
"Aggressive defense of claims"