After fighting alongside Gov. Robert L. Ehrlich Jr. for malpractice reform, leaders of the state's doctors and hospitals stepped away from the governor yesterday, urging him not to veto the malpractice bill passed by the General Assembly last week.
MedChi, the state medical society, and the Maryland Hospital Association said the immediate relief that the bill provides doctors on skyrocketing insurance premiums was essential and warned they would support an override if Ehrlich carries out his announced intention to veto the bill.
"Maryland's health care system is in a crisis," Dr. Willarda Edwards, a Dundalk internist who is president of MedChi, said at a joint news conference. The bill, which cuts premium increases this year from 33 percent to 5 percent, "will enable physicians to continue to care for their patients."
Later in Annapolis, Ehrlich reiterated his veto vow, saying the legal reforms in the bill were "light as air" and its 2 percent premium tax on health maintenance organizations to subsidize malpractice insurance amounted to a tax on the poor.
He said that if the veto were sustained he could offer "short-term cash and hope" by including funds in his budget for some relief in premium rates, although not as much as provided in the legislation.
Vetoing the bill after physicians groups urged him to allow it to become law could be politically difficult for the governor, who did much to bring the malpractice issue to the forefront by touring hospitals, meeting with doctors and urging them to lobby legislators on the issue.
Democrats quickly seized on the situation to depict Ehrlich as isolated in his opposition.
"The physicians support the bill. The hospital association supports the bill. Med Mutual, the insurance company that insures 85 percent of the physicians in the state, supports the bill. The trial lawyers, they're not crazy about the bill ... but they realize it could have been much worse, so they're standing solid," said Senate President Thomas V. Mike Miller.
"Basically, there's no naysayers, with the exception of the one on the second floor," Miller said, referring to the location of Ehrlich's State House office.
Ehrlich has until Monday to veto or sign the bill or allow it to become law without his signature. If he follows through on his veto pledge, the legislature will have the opportunity to attempt to override the veto as its first order of business when the regular General Assembly session convenes Wednesday.
Both houses passed the bill with veto-proof majorities, and Sen. Brian E. Frosh, the Montgomery County Democrat who chaired the Senate's medical malpractice task force, said he expects the legislature would vote to override.
"There are some Democrats that are so upset at how [Ehrlich] handled this special session that they think if he vetoes this we should just let him stew in it, but I think that would be a mistake," Frosh said.
At yesterday's news conference, the medical and hospital associations made their break with Ehrlich a gentle one, praising him for his efforts that led to the bill's passage and agreeing that further reforms are needed.
But they said they didn't have a difficult time deciding what stance to take.
"It was not a close call, in that we need to move forward," said Calvin Pierson, president of the Maryland Hospital Association. "The bill gives relief to physicians by stabilizing their insurance premiums and raising Medicaid physician fees. While the bill falls short of tort reform, it does contain some important steps."
If the legislature sustains his veto, Ehrlich said, he would budget $30 million a year for the next three years to limit malpractice increases - an amount equal to that in an Ehrlich bill killed by both houses in last week's special session. That would limit the rate increase this year to about 12 percent.
Ehrlich has said in the past that he would support a subsidy on doctors' premiums only if it were accompanied by limits on lawsuits, known as "tort reform."
Ehrlich also said he would include $18.5 million in the budget to increase Medicaid reimbursements for doctors in certain specialties - up from $12 million in the bill the governor presented to the special session.
That's about as much as in the first full year of the legislature's bill, but the legislature would increase the amount going to rates (and decrease the amount going to subsidize premiums) in the three years to follow.
The governor said his analysts have completed a preliminary evaluation of the legal reforms in the legislature's bill and found that, beyond the rate subsidy, the reforms would reduce the premium for a typical malpractice policy by just 2.9 percent this year.
He acknowledged that any tort reforms would take several years to have their full effect. Ehrlich said he did not know how large an effect the legislature's reforms would have in the long run but said he suspected it would not be sufficient.
The bill lowers by half the cap on non-economic damages in death cases, requires mediation before malpractice cases are tried, sets more stringent standards for expert witnesses, sets up more reporting of medical errors, makes it easier to discipline doctors, and changes the way insurance regulators review premium increase requests.
MedChi and MHA said they would be seeking more reforms when the legislature convenes next week. Pierson said major goals would be allowing large malpractice settlements or judgments to be paid over a period of years, changing the way economic damages are calculated, and affording more protection to emergency room doctors.
Ehrlich said the doctors and hospitals would find it hard to get more reform if the bill passed last week becomes law.
"The appetite for tort reform comes around every five to 10 years," he said. "If this lighter-than-air package of tort reform passes, it would be the last tort reform package you'll see in many years."
Miller and Frosh said the Senate would be unlikely to take up new tort reform measures immediately, opting instead to see whether the reforms the legislature just passed are effective.
But Del. John Adams Hurson, the Montgomery County Democrat who chairs the House Health and Government Operations Committee, said he thinks additional reforms would be possible in this year's legislative session. Democrats in the House generally supported more tort reform measures than their Senate colleagues did.
"The one amazing thing about a regular session is there are a lot of things in play," he said. "The one thing I've learned over the years is you should never say never in the legislature."
The state's HMO operators have not opposed - or supported - the premium tax or the malpractice bill in general.
However, if the tax becomes law, "it would be inevitable that some of all of the tax would be passed along to our customers in higher premiums," Jeffery W. Valentine, a spokesman for CareFirst BlueCross BlueShield, said yesterday. He said CareFirst has about 300,000 Maryland members in its BlueChoice HMO and the tax would be about $17 million in this calendar year.
Elizabeth Sammis, a spokeswoman for Mid Atlantic Medical Services Inc., which operates the Optimum Choice and M.D. IPA HMOs, also said the tax would be passed on to customers. Membership and dollar projections for MAMSI's share of the tax were not available.
During legislative debate, both sides estimated the tax, if passed through, would increase HMO premiums for a family by about $200 a year - an amount that would be paid either by the members or by employers.
Small businesses, in particular, have argued that the tax would be a burden on them.
Alfred W. Redmer Jr., the state's insurance commissioner, said it was unclear whether HMOs would be able to pass the tax on immediately or would have to wait until contracts with employers or individual members come up for renewal.
He said it was also unclear whether doctors - who have already paid the 33 percent premium increase for the year or for the first quarter - would get refund checks or credits toward future payments.
Although his office would administer the rate stabilization fund under the legislation, Redmer, an Ehrlich appointee, said, "a lot of it is unclear, and a large part of it is unworkable."