Division of Governmental Affairs MEMORANDUM IN OPPOSITION

IN SENATE FINANCE COMMITTEE – S.2507 (BUDGET)

IN ASSEMBLY WAYS & MEANS COMMITTEE – A.3007 (BUDGET)

MSSNY STATEMENT OF OPPOSITION TO HEALTH/MENTAL HYGIENE ARTICLE VII PROPOSAL TO REQUIRE PHYSICIANS TO PAY 50% OF THE COSTS OF THE EXCESS MEDICAL MALPRACTICE INSURANCE PROGRAM

We are writing to you to express our strong objection to a proposal contained in the Governor’s proposed State Budget (Part K of the Health/Mental Hygiene Article 7 bill) that would require the 16,000 physicians currently enrolled in the Excess Medical Malpractice Insurance program to bear 50% of the cost of these policies. This proposal was advanced during last year’s Budgetnegotiations, but was rejected by the State Legislature in adopting the final Budget for FY 2020-21

This incredibly short-sighted proposal would thrust over $50 million of new costs on the backs of our community-based physicians who served on the front lines of responding to the pandemic. This new cost imposition would hit these practices at a time when many of these practices are already facing huge losses as a result of a substantial reduction in the number of patients receiving care during the pandemic. Many procedures have been and continue to be delayed due to elective surgery restrictions, as well as patients appropriately limiting their trips out of their homes. Moreover, physician capacity to treat patients have been and continue to be significantly reduced due to reduced quantities of personal protective equipment (PPE) for themselves and their staffs.

Imposing these new costs is stunning given all of what physicians did to serve the public during this crisis, putting their health and their families’ health at risk. Many became sick and some even passed away.

As you may be aware, the Excess Medical Malpractice Insurance Program provides an additional layer of $1M of coverage to physicians with hospital privileges who maintain primary coverage at the $1.3 million/$3.9 million level. The program was created as a result of the liability insurance crisis of the mid-1980’s to address concerns among physicians that their liability exposure far exceeded available coverage limitations. They legitimately feared that everything they had worked for all of their professional lives could be lost as a result of one wildly aberrant jury verdict.

This fear continues today since New York State has failed to enact meaningful liability reform to ameliorate this risk. The size of medical liability awards in New York State has continued to rise significantly and physician liability premiums remain far out of proportion compared to the rest of the country. For example, a recent report from Diederich Healthcare showed that in 2019, New York once again had the highest cumulative medical liability payouts of any state in the country, 68% more than the state with the second highest amount (Pennsylvania). It also had the highest per capita liability payment, 10% more than the 2nd highest state (Massachusetts). These disturbing statistics demonstrate a major reason why New York once again received the dubious distinction as being one of the worst states in the country to be a doctor.

With all the pressure our healthcare system is under now, this program is more important than ever. While many physicians did receive some stimulus support from the federal government to help offset the historic drop in patient visits, most report that these funds only helped to cover a fraction of their lost costs. For example, 85% of respondents to a MSSNY survey reported that stimulus funds offset less than half of their losses, and that 40% of physician respondents had to lay off at least 10% of their staff because of these losses. Furthermore, an AMA survey reported that during the pandemic the average number of in-person visits to physician offices fell from 97 per week to 57. As a result, physicians averaged a 32% drop in revenue since February, with about one in five doctors saw revenue drop by 50% or more, while nearly 1/3 saw a 25%-49% decrease.

If last year was a terrible time to adopt this proposal, this year would be even worse. In fact, these new costs would likely force many physicians to forego obtaining the coverage altogether. We believe this would be contradictory to the goal of the Excess program to help protect patients and the public at large.

Again, we urge you to reject this short-sighted proposal and to maintain the existing mechanism for covering the Excess Medical Malpractice Insurance Program.

For all of the reasons stated above, we urge that this Budget proposal be rejected from the final Budget.

1/25/21 Respectfully Submitted, MMA – oppose

MSSNY DIVISION OF GOVERNMENTAL AFFAIRS