State clears way to give doctors relief on premiums

Sun Staff

An opinion by Maryland's attorney general yesterday cleared the way for the state to give doctors relief on malpractice insurance premiums before July 1.

Insurance Commissioner Alfred W. Redmer Jr. said the administration would "absolutely" move to get credits on future bills or refund checks to doctors as soon as possible, but he said he could not set an exact timetable until he had reviewed the opinion.

"If we have the legal authority to do it, we stand ready to do it," Redmer said.

While the General Assembly approved a rate relief fund in December, distribution of the money has been held up by procedural steps. The decision for the state to help pay malpractice premiums came after the state's largest malpractice insurer raised premiums 28 percent last year and 33 percent this year, and doctors complained that they might be forced to leave or curtail their practices.

"We encourage everyone to move as fast as possible to implement the law," T. Michael Preston, executive director of MedChi, the state medical society, said yesterday. The fund would limit the rate increase this year to 5 percent.

Gov. Robert L. Ehrlich Jr. supported the concept of a rate-relief fund, but vetoed the December bill creating it because he didn't like the source of the money - extending a 2 percent tax on insurance premiums to HMOs, which had previously been exempt.

Lawmakers overrode the veto in January, and the tax went into effect; several HMOs raised premiums to pay it. Then, legislators passed a bill clarifying how the money was to be paid. That became law last month.

Redmer said the administration originally read that law to say it couldn't pay the money until July 1, when a new fiscal year begins. State Sen. Brian E. Frosh, the Montgomery County Democrat who chairs the Senate Judicial Proceedings Committee, and Redmer sought clarification from the attorney general.

"In my view, it is in the governor's discretion to approve a budget amendment that would accelerate the schedule for payment of funds for the insurance subsidy," said the opinion issued yesterday by Robert N. McDonald, chief counsel for opinions and advice in the attorney general's office.

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