The June 12, 2003 meeting of the Program Review and Investigations Committee was held at 10:00 AM, in Room 131 of the Capitol Annex. Senator Katie Stine, Co-Chair, called the meeting to order, and the secretary called the roll.
Present were:
Members: Senator Katie Stine, Co-Chair; Representative Charlie Hoffman, Co-Chair; Senators Brett Guthrie, Ernie Harris, Paul Herron Jr, David K. Karem, Vernie McGaha, and Dan Seum; Representatives Adrian Arnold, Sheldon Baugh, Dwight Butler, Jack Coleman, Ruth Ann Palumbo, Tanya Pullin, and Dottie Sims.
Guests: Danny Garrett, Administrator of the Knox County Hospital in Barbourville, Kentucky; Dave Ellington, a pastor from Covington, Kentucky; David Emmons, Ph.D., and Carol Kane, Ph.D., Center for Health Policy Research, American Medical Association; and Bill Doll, Attorney, Jackson and Kelly Law Firm, on behalf of the Kentucky Medical Association.
LRC Staff: Greg Hager, Ph.D., Committee Staff Administrator, Lowell Atchley, Lynn Aubrey, Kara Daniel, Tom Hewlett, Joseph Hood, Margaret Hurst, Erin McNees, Stacie Otto, Cindy Upton, Judy Fritz, Mike Clark, Ph.D., LRC Chief Economist, Rebecca Brickey, Intern, and Susan Spoonamore, Committee Assistant.
Rep. Palumbo asked that her statement from the May 8, 2003 minutes meeting be amended. Instead of asking whether corporations and limited liability corporations (LLCs) and individuals were paying their fair share of taxes, she had said that the system did not accurately measure who paid because due to LLCs, many business taxes are showing up for individuals taxpayers. The categories were not accurate.
Amendment to the May 8, 2003 minutes was approved without objection by voice vote upon motion made by Rep. Sims and seconded by Rep. Hoffman.
Minutes of the May 8, 2003 meeting as amended, were approved without objection by voice vote upon motion made by Rep. Sims and seconded by Rep. Baugh.
Mike Clark, Ph.D., LRC Chief Economist, presented the staff report The Cost of Medical Malpractice Insurance and Its Effect on Health Care. Dr. Clark explained that the Committee had established three primary objectives for the study: describe the medical malpractice system in Kentucky and how Kentucky’s system compared to other states, determine what factors affected medical malpractice insurance premiums, and identify the implications of changes in the medical malpractice market on access to medical care and the cost of medical care ( a copy of the full report can be found in its entirety in the LRC Library).
Dr. Clark stated that the recent increases in medical malpractice insurance premiums appeared to have been caused by several factors. He said that total medical malpractice claims for the nation as reported by insurance carriers increased by 17 percent from 2001 to 2002. He said that that an increase in the number of claims and a decrease in investments likely contributed to insurance carriers raising premiums.
He said that as the cost of medical malpractice increased, health care providers would attempt to pass the costs on to patients in the form of higher reimbursement rates. He also stated that many of the reimbursement rates paid to providers were based on cost data that did not reflect recent increases in the cost of medical malpractice insurance, particularly reimbursement rates paid by Medicaid and Medicare. As a result, he stated that the health care providers would not be able to pass the additional cost on to patients, which would result in lower profits, or possibly losses or an increase in losses for other providers. He said that a reduction in profits or an increase in losses for health care providers could cause providers to reduce the level of health care services.
Dr. Clark explained that the high cost of medical malpractice insurance could result in higher reimbursement rates, causing the cost of health care to increase. He said that the higher health care costs would result in increases in health insurance for the population in general, Kentucky’s state employee health insurance program, and Medicaid. He stated that in 2002, health care providers, including physicians, hospitals, and other facilities, paid approximately $8.8 billion to insurance carriers for medical malpractice insurance nationally and $111.5 million in Kentucky.
He stated that the report compared the differences in medical malpractice insurance premiums and the ratio of physicians to population for states that had and had not implemented specific policies to address medical malpractice issues. He said that the premiums were lower in states that had either capped economic damages, repealed the collateral source rule, or established review panels. The ratio of physicians to population was higher in states that repealed joint and several liability, capped non-economic damages, limited attorney fees, repealed the collateral source rule, or established patient compensation funds.
Dr. Clark stated that staff’s analysis indicated that state medical malpractice policies did have an effect on health care as measured by the number of physicians. He said that states who had enacted certain types of legislation to address the issue had lower premiums and a greater number of physicians. He said staff noted that not all legislative changes had been effective in reducing costs and states who had capped punitive damages had relatively higher costs. He stated that, overall, the analysis on the number of physicians indicated that physicians were less likely to practice in states where medical malpractice costs were relatively high, which would suggest that patients would be spread over relatively fewer physicians in states with relatively higher medical malpractice costs. Dr. Clark stated that this was only one measure of health care and it did not necessarily imply that health care quality would be lower.
He also stated that staff determined that the evidence was consistent with reports that physicians who paid lower premiums were more likely to locate in states that had enacted legislation addressing medical malpractice. He said that an analysis of physician-to-population ratios only provided one measure of health care and did not necessarily indicate that the level of health care was lower in states without reforms.
Dr. Clark stated that staff’s analysis measured the average effect of caps and other reforms across other states, but because there was a great deal of variation in how states implemented policy options, the reforms could be effective in reducing premiums in some states, while not being very effective in other states.
He stated that while the analysis suggested that non-reform states would be able to attract a greater number of physicians by enacting certain policy options, he noted that several states had passed reforms that were later found to be unconstitutional and physicians would have to wait to determine whether the reforms would be effective in reducing premiums. He also said that the insurance carriers might also wait to lower premiums until the effects of the policy changes were reflected in losses. He stated that even if the reforms were effective in reducing the premiums, it could take several years for the number of physicians to change.
Sen. Guthrie asked how caps on punitive damages could make Kentucky less attractive to physicians and general surgeons. Dr. Clark stated that for most physicians and physician specialists the number of physicians was actually increasing. Staff found that when a state implemented a cap on economic damages for general surgeons, then the number of general surgeons tended to grow at a slower rate than it did in other states. Staff did find data to suggest that if caps were put on punitive damage awards against physicians, it would be less attractive to physicians. He said staff did not have detailed data in terms of the different types of claims for the different specialists.
Sen. Guthrie asked if for non-economic damages the dependent variable would have been the number of physicians. Dr. Clark stated that it was the number of physicians based on population.
Sen. Guthrie asked if staff was confident with the statement that if punitive damages were capped then Kentucky would have less physicians than other states. Dr. Clark stated that historically that outcome was what had been observed.
Sen. Karem asked for clarification on the laws of investment, specifically that staff had heard that the companies did not invest in stocks but more in bonds. Dr. Clark stated that staff conducted interviews with representatives of insurance companies, and through those conversations staff had been provided with information on how the companies made their investments.
Sen. Karem asked if the companies had actually disclosed their portfolios. Dr. Clark stated that they had not disclosed their portfolios. He said that staff had been able to find literature on the issue which indicated that the companies tended to invest more conservatively in the bond market than the stock market. He noted that staff did not verify this through financial statements.
Sen. Karem asked if staff had looked at the insurance program that the doctors in Kentucky previously had, and was any information or data from that program used in the study. Dr. Clark stated that there was some discussion in the study of the insurance program, but much of the data was dated and staff had to rely on testimony from individuals. He said that the information provided to staff was primarily from representatives of the Kentucky Medical Association.
Sen. Karem asked if that company was gone. Dr. Clark stated that was correct. It had been purchased by another company.
Sen. Karem stated that the legislature should do whatever it could to help the medical profession and the public, but he suggested that the doctors get together and look at the option of creating their own insurance program like they had before.
Sen. Seum asked if staff was aware of any physician in Kentucky who did not have medical malpractice insurance. Dr. Clark stated that staff was not aware of any physician who did not have insurance.
Sen. Seum asked to what extent defensive medicine was occurring. Dr. Clark stated that the extent of using defensive medicine was unknown and there was no way of putting a dollar figure on defensive medicine. He stated that health care providers did identify the issue as a problem.
Sen. Harris asked if staff had been able to determine what caused insurance premiums to go up in 1997 and then again in 2000, and would there be a larger rise in the 2003 premiums. Dr. Clark stated that the 2003 data would not be available until around April of 2004, but the data would likely show an increase in premiums. He stated that staff was not aware of any particular circumstance that would explain the increases in 1997 and 2000.
Sen. Harris asked if Kentucky had a medical review panel. Dr. Clark stated that it did not.
Sen. Harris asked if doctors were making their decisions to locate based on factors rather than capped punitive damages. Dr. Clark stated that it was difficult for staff to pin down a specific reason, but several things could have been going on. Dr. Clark stated that for example, if the magnitude of the awards were capped, it could actually increase the frequency of the awards. He also said that the data which had been available to staff had been limited, not allowing staff to get at those questions.
Rep. Baugh asked if staff had been able to determine if the frequency of claims had increased. Dr. Clark stated that the only information staff had was based on aggregate claims, and that information had not been broken down in terms of the number of claims.
Rep. Baugh asked if the loss ratio reflected a pure loss ratio or a combined ratio. Dr. Clark stated that it was loss ratio for the industry. It was the total claims as reported by all malpractice carriers divided by the total premiums reported by all malpractice carriers.
Rep. Baugh asked if the Department of Insurance had access to financial statements of the insurance companies operating in the state. Dr. Clark stated that access to the financial statements of the insurance companies had not been an issue because staff had not asked the companies to provide financial statements. Staff felt that it would not have been able to collect a sufficient number of data across all the carriers in order to get good information. He also stated that he was not sure if the Department of Insurance required insurance companies to provide detailed information on the different types of investments that they made.
Rep. Baugh asked if people were more likely to bring a claim against a physician during periods of economic uncertainty. Dr. Clark stated that it could be possible, but he did not know.
Rep. Baugh asked if any of the insurance companies had settled claims without making a payment. Dr. Clark stated that it had happened, but he did not know how often that it had happened.
Rep. Pullin asked if there had been an actual decrease in premiums from 2001 to 2002, outside of the Jefferson County area. Dr. Clark stated that there had been a decrease in base premiums that a specific company charged.
Rep. Pullin asked why the base premiums decreased. Dr. Clark stated that he did not know.
Rep. Pullin asked if other factors were involved in physicians locating to different areas or states. Dr. Clark stated that physicians choose locations for personal and professional reasons, as well as income. Staff did research other factors such as the general income of the area, and the number of Medicaid recipients within an area.
Rep. Pullin asked if it was true that premiums were lower in states with medical malpractice review panels and would it be true for all types of review panels. Dr. Clark stated that the results contained in the report were more generalized. Staff found that states with medical review panels tended to have lower premiums. He said the analysis did not measure the potential effects of different types of panels.
Sen. Stine asked if certain variables could affect the physician population, such as economic opportunities, the number of medical schools within a state, and the standard of living in a state. Dr. Clark stated that by using a state’s personal income, staff was able to capture the effect of many of those factors.
Sen. Stine stated that it was important to take a look at all the variables and not just conclude that one variable was necessarily the cause when in fact there could have been correlation without causation. Dr. Clark stated that the analysis looked at how the different variables could affect the population of physicians. He said that staff looked to see if there were changes based on income or the size of the state with other measures such as population to see if those seemed to have had an effect in terms of attracting more physicians. He stated that these types of variables had been incorporated and a statistical analysis had been done to sort through the different factors.
Sen. Stine asked what other states besides Kentucky, had a population of 4 million people. Dr. Clark stated that he would have to get that information.
Rep. Coleman asked if the data that had been included in the June 2003 draft report could not have been obtained for use in the January draft report. Dr. Clark stated that in almost every instance the data obtained was new data that had become available since January. For example, he stated that the 2002 data became available only a couple of months ago. He said that staff had reviewed several studies that were not in the initial draft and all but one of the studies were studies that came out this year.
Rep. Arnold asked how many states had the patient compensation fund. Dr. Clark stated that approximately 13 states had patient compensation funds. He said he did not think that the number had changed, but he would go back and verify that information. He said that insurance companies who were located in states that had patient compensation funds were somewhat protected from any changes in the overall level of jury awards. He said that insurance companies could find that to be appealing and could be more likely to offer coverage in those states.
Rep. Arnold asked if the provider paid a fee into the fund. Dr. Clark stated that was true.
Rep. Arnold asked if the states contributed any money to the patient compensation fund. Dr. Clark stated that it varied in each state. He said that Pennsylvania had discussed using general fund dollars to deal with the unfunded liability.
Rep. Palumbo asked for information on the states who had patient compensation funds. She also asked how many companies wrote medical malpractice insurance policies in Kentucky. Dr. Clark stated that he would get that information for her. He also said that according to the Department of Insurance, in 2001 there were 10 carriers actively writing coverage in the state. He said that number could have changed because there had been some discussion about getting another carrier to come into the state.
Rep. Palumbo asked why staff used only the one company as a sample. Dr. Clark stated that the company had been selected because there was no data available from any other company.
Rep. Palumbo asked if there was any indication of cost shifting, due to catastrophes, from some of the companies to health care providers. She asked to see information on rates for anesthesiologists and neurosurgeons too. Dr. Clark stated that the information for rates on anesthesiologists and neurosurgeons was not available. He said that the data used in the analysis had been data provided through a survey that only reported three specialists: obstetrics/gynecology, internal medicine and general surgery.
Sen. McGaha asked for more information on the base premium. Dr. Clark stated that the base premium was the starting point for individual providers, and that the base premium could be adjusted to reflect any number of variables.
Sen. McGaha asked that if a physician had been sued before, would it be on his record regardless of whether or not he won or lost the case. Dr. Clark stated that was correct.
Sen. McGaha asked if a lawsuit would always be a part of a physician’s record even if the lawsuit was found to be frivolous, and if so, would that play a role in the insurance company’s determination of the premium base rate. Dr. Clark stated that it could happen that way but it would depend upon the criteria of the different carriers.
Sen. McGaha asked if that would be true for any of the companies. Dr. Clark stated that staff had heard testimony from health care providers to that effect.
Sen. McGaha asked if staff had talked to the insurance people. Dr. Clark stated that the insurance carriers indicated that they did look at the past claims history of an individual physician. He stated that in terms of distinctions for cases that were brought but dropped, staff did not get into much detail on that. He also stated that there would be a cost associated with those type of cases because those cases had to be defended as well. He said he did not know what an insurance company’s rate would be based on that scenario.
Sen. McGaha asked if the report contained different variables that could affect the rates. Dr. Clark stated that the report did talk about some variables.
Sen. McGaha stated that he would like more specific information on the different variables.
Rep. Butler asked for the background on the collateral source rule that was repealed in 1988. Judy Fritz stated the Supreme Court determined that the collateral source rule was an intrusion upon the judicial branch of government — a separation of powers issue.
Rep. Butler asked if there had been any challenge to that ruling. Ms. Fritz stated that the Supreme Court was the last place of an appeal.
Rep. Butler asked how many other states were moving that way. Dr. Clark stated that several states had decided to repeal the collateral source rule. He said whether the repeal survives a challenge depends on the individual state’s Constitution.
Rep. Coleman asked who bought the self insurance company in 1970. Dr. Clark stated that it was a private company out of Michigan. He did not know the specific name of the company, but he would get that information.
Rep. Coleman asked if the Michigan company was writing medical malpractice insurance policies in Kentucky. Dr. Clark stated that he would find out.
Sen. Guthrie asked if the report included data from Indiana. Dr. Clark stated that Indiana had to be dropped from the study because they had a patient compensation fund. He said that staff did find that the policy limits for Indiana were substantially lower, and because the policy limits were low, it caused premiums to be low as well. He stated that the information contained in the report did support the conclusion that what Indiana had done had resulted in a decrease in relative premiums.
Sen. Guthrie asked how many border states were similar to or different from Kentucky. He also asked if staff agreed that Indiana had lower premiums because of what they had implemented. Dr. Clark stated that staff supported the conclusion that the patient compensation fund and total cap on damages had resulted in a decrease of premiums in Indiana. He also stated that staff’s analysis did include similarities and/or differences with border states.
Rep. Guthrie asked if Indiana had any issues with physician access. Dr. Clark stated that staff was not aware of any issues. If what we hear is true about physicians moving to Indiana then access to physicians would tend to be relatively higher.
Rep. Guthrie asked if Indiana had a lower level of care since their physicians were not as open to litigation as compared to Kentucky. Dr. Clark stated the report did not evaluate the level of care and it would take more extensive research in order to cover that issue.
Rep. Hoffman asked if Kentucky had an adequate amount of doctors for the citizens. Dr. Clark stated that overall the research showed that the total physician population for Kentucky was growing. He stated that there could be certain areas in Kentucky where that would not be the case. He said that in Kentucky, the ratio for physician to population was actually growing at a faster rate than that of the nation.
Rep. Hoffman asked if the states who had review boards had criteria in order to make a determination as to whether or not there had been malpractice. Dr. Clark stated that the criteria differed in individual states with review boards. He said that the persons sitting on the panel determined the appropriate level of care. He stated that he was not aware of any specific legal standards that was used in the review boards.
Rep. Hoffman asked if the report had any specific conclusion regarding malpractice rates. Dr. Clark stated malpractice rates were really not an issue tied to defensive medicine. He stated that defensive medicine could reduce the possibility of a lawsuit, and there could be a chance that it would lower premiums to some degree. He said that it had more of an effect on health care because more tests and procedures were being ordered than otherwise would have been.
Sen. Stine stated that the cost of health care would ultimately contribute to the judgments that are received. Dr. Clark said that was a fair statement.
Sen. Harris asked if the study had looked at other states similar to Kentucky, and had staff reached any recommendations based upon what other states had or had not done based on limiting economic and non-economic damages. Dr. Clark stated that the analysis included all states except for Hawaii and Alaska. He said that the analysis included population, income level of the state and other types of things. He said that the analysis had looked at how the differences contributed to the cost of premiums, and how the differences were evaluated in terms of the different types of legislation in other states.
Sen. Harris stated that he thought legislators should look at what Indiana was doing.
Rep. Palumbo asked what was working in the 13 states with patient compensation fund programs. She also asked why the patient compensation funds had been repealed or inactive in other states. Dr. Clark stated that in the 1970s, Kentucky established a patient compensation fund, but it never got up and running effectively. He said that about 18 months later it was overturned by the courts because of constitutional problems. He said staff would have to pull together information on the specifics.
Rep. Palumbo asked why Florida was listed twice. Dr. Clark said he was not for sure, but would find out.
Rep. Pullin asked for a description of the elements of malpractice reform that Indiana had enacted. Dr. Clark stated that Indiana had caps on all kinds of damages.
Rep. Pullin asked if that included caps on economic, non-economic, and punitive damages. Dr. Clark stated that it was a total cap. He said that Indiana had a patient compensation fund, medical malpractice review panels, and caps on attorney’s fee.
Rep. Pullin asked if staff tried to look at all states to see if those different elements were working and useful. Dr. Clark stated that staff had looked at all states.
Sen. Stine introduced guests who had signed up to speak to the committee.
Danny Garrett, Administrator of the Knox County Hospital in Barbourville, Kentucky requested to speak to the Committee. He explained that the Knox County Hospital consisted of 42 beds and was located in a rural area. He stated that during 2002, the hospital delivered 194 babies and received 570 out-patient visits for obstetrics. He said that a group of doctors consisting of four gynecologists informed the hospital board that their medical malpractice insurance had increased almost 60 percent and they could not afford the premium. They started telling their patients that they could no longer provide obstetrical coverage as of July 1, 2003 and the hospital stood to lose at least 12 staff members. He said that as of next Tuesday, the hospital would not be able to provide obstetrical coverage because of staffing issues. He also said the loss of doctors would affect the ability of the hospital to serve folks in Bell, Leslie, Harlan, and Whitley counties, and the nearest hospital would be 1.5 hours away. He said patients were finding it very hard to switch doctors because of early delivery dates and the heavy caseload of the doctors’ offices. He said the services that the hospital could provide would be very rudimentary, and it would be especially hard on emergency room personnel because some would not make it. He stated that obstetrics had never been a money making operation especially for a rural hospital under 50 beds, but as a community hospital, the hospital provided services and accepted the loss. He stated that with the loss of obstetrics the hospital desperately needed help. The hospital was now hearing that the E.R. physicians were also going to have problems with malpractice insurance this fall. He stated that the hospital needed the support of the General Assembly so it could continue to provide medical services in an underserved area.
Dave Ellington, a pastor from Covington, Kentucky also requested to speak to the committee. Mr. Ellington stated that he was a victim of medical negligence. He said that five years ago he was an one-eyed person and saw well with that eye until a medical team failed to comply with basic procedures, and now he would be legally blind for the rest of his life. He said that the medical team who failed to follow basic procedures deserved to take responsibility and reimburse him for the problems. He said that caps might alleviate some of the economic impact on insurance companies, but it was not fair to the victim or his or her family. He said that in his case he was lucky, but there were some victims who would never be able to sit here and tell their story.
Sen. Stine introduced David W. Emmons, Ph.D. and Carol K. Kane, Ph.D., of the Center for Health Policy Research, American Medical Association, and Bill Doll, Attorney, Jackson and Kelly Law Firm, on behalf of the Kentucky Medical Association.
Mr. Doll stated that he had worked for the Kentucky Medical Association (KMA) for 27 years. He explained that the KMA did not do the same things as Indiana. He stated that Kentucky enacted a patient’s compensation fund in 1976, but a court decision declared the patients compensation fund unconstitutional. He said that in his opinion, a screening committee panel would also be unconstitutional. He said that Kentucky has a provision in its constitution that establishes an absolute prohibition against caps. On behalf of the Kentucky Medical Association, he asked the committee to not adopt the report.
Dr. Kane presented a statement to the Committee ( a copy of which can be found, in its entirety, in the LRC Library). She stated that given the questions about how tort reform was measured in the report, the problem of multicollinearity, and the contradictory results of the impact of different types of caps on premiums and physician supply, that the committee view the report in the context of other literature on the impact of tort reform. She said that there was a substantial amount of peer-reviewed literature that supported the effectiveness of non-economic caps at bringing down professional liability expenses, and at bringing a greater degree of stability to the market for medical professional liability insurance.
Rep. Palumbo stated that it was her understanding that signs of premium escalation were evident before 2001.
Dr. Kane stated that the state and national data did not show a spike in premium levels until 2001.
Sen. Harris asked if the cost of defensive medicine increased the cost of health care or liability insurance.
Dr. Kane stated that it would increase the cost of health care. She stated that she did not have any information on whether or not it increased liability insurance.
Mr. Doll stated that KMA believed that the premiums physicians paid did not amount to a great percentage of the total health care costs. The indirect costs of defensive medicine clearly played a large economic role in the overall costs as a consequence of the liability system.
Sen. Harris asked if the extra cost of defensive medicine was not fully reimbursed to the doctor.
Mr. Doll stated that the extra costs incurred as a consequence of people trying to insulate themselves against potential liability have to be borne somewhere. If those costs are an indirect product of the liability situation, then those need to be factored in.
Sen. Harris asked if the costs of defensive medicine were interrelated with increased health care and liability insurance.
Mr. Doll stated that he thought it was interrelated.
Rep. Coleman stated that the January report and the report given today were finalized with data that was available to staff at the time of writing, and that the report should be adopted and sent to the committees of jurisdiction so the legislature can proceed with this issue. He said there would always be new data, but legislative action needed to be developed so the legislature could start developing policy.
Dr. Kane stated that adding one more year of data would not change anything that much.
Rep. Hoffman asked how far Dr. Kane and Dr. Emmons had traveled to come to the meeting.
Ms. Kane stated that they came from Chicago.
Rep. Hoffman stated that within the last three years, Nevada, Mississippi, and Ohio had given the medical community what they asked for, but their doctors were still struggling to find affordable insurance, and insurers were continuing to refuse to reduce rates in those states. He asked if the American Medical Association, Center for Health Policy Research was aware of that situation.
Dr. Kane stated that she was aware that Nevada had passed a cap about a year ago, but anytime a cap was passed it would not have an instant impact on premiums.
Dr. Emmons stated that there was a research paper that indicated caps reduced premiums by 5% to 9% over a three year period, and there was another study that looked at reform in different states and it found a 8.4% decrease within three years of implementing caps.
Rep. Hoffman asked what the cap levels were in Mississippi.
Mr. Doll stated that he did not know. He said that Mississippi enacted two separate pieces of legislation, one of which was intended to relate strictly to medical malpractice and then he thought they went back and addressed tort reform generally, but he did not know the exact amount.
Rep. Hoffman asked if staff had the cap levels for Mississippi. Ms. Fritz stated that the limit on non-economic damages was $500,000, but for claims filed after 2011 it would be $750,000 and thereafter it would be $1 million dollars.
Rep. Hoffman stated that in his opinion, the amounts for Mississippi were unrealistic.
Mr. Doll stated that Kentucky did not have the option of looking at caps because of an absolute constitutional prohibition against establishing caps.
Rep. Coleman asked if Mr. Doll remembered the Kentucky Medical Insurance Company.
Mr. Doll stated that he did.
Rep. Coleman asked if a company in Michigan bought it.
Mr. Doll replied that it went from Ohio to Michigan through some mergers. He also wanted to clarify that no state money had gone into the Kentucky Medical Insurance Company.
Rep. Coleman asked if the company in Michigan was writing medical malpractice insurance.
Mr. Doll stated that APA Capital was writing medical malpractice insurance and it did underwrite in Kentucky.
Sen. Stine asked if staff analyzed other levels of policies besides the $1 million dollar policy. Dr. Clark stated that the data used was based on a survey of medical malpractice insurance providers who were asked to submit rates for $1 million per occurrence and $3 million aggregate policies. He said there was not enough data to analyze different policy limits.
Sen. Guthrie asked if staff was satisfied with the data it had to evaluate the impact of tort reform even though it may not have been current information. Dr. Clark stated that the data used by staff had been provided through a vendor of the American Medical Association, and staff was not made aware of any problems that the data might have had. He said that if the data had not been frequently updated, then the magnitude of the effect could be affected, but not the overall trend.
A motion made by Sen. Guthrie and seconded by Rep. Palumbo that the report not be approved, but that the information be sent to the Legislative Research Committee for forwarding to the appropriate LRC committee of jurisdiction was withdrawn by Sen. Guthrie and Rep. Palumbo.
A motion was made by Rep. Coleman and seconded by Rep. Arnold to approve the report.
Rep. Pullin asked for clarification on adopting the report and not adopting the report.
Sen. Stine explained that the adoption of a report became the expression of the committee and if the report was not adopted, then it stayed a draft.
Bobby Sherman, Director of the Legislative Research Commission explained that the motion was to “adopt” the report and if the motion passed the report would go to the Legislative Research Commission and then the report, as an expression of the committee, would be referred to the appropriate standing committee. If the motion failed, it would not mean that the committee rejected the report, it would mean that nothing had happened and the report would stay in the committee.
Rep. Hoffman asked if the committee could take action on the report at a later date if it was not adopted.
Sen. Stine stated that was her understanding.
Dr. Wilson, Deputy Director of Research and Finance for the Legislative Research Commission and former Committee Staff Administrator for Program, explained that a Program Review report normally had a set of recommendations and if the committee approved a report with recommendations, then those recommendations would become an expression of the committee. She said that this report had no recommendations so it was a different situation. She said that the committee could just say that the report had been presented to the committee and whether or not the committee wanted it to move forward or not.
The motion made by Rep. Coleman and seconded by Rep. Arnold to approve the report failed upon roll call vote.
Sen. Stine and Rep. Hoffman agreed to move the discussion of the study topics to the July meeting agenda.
Meeting was adjourned at 1:35 p.m.