The Physicians' Cincinnatus Society

SEQUENCE OF IMPORTANT EVENTS
IN THE PENNSYLVANIA MALPRACTICE INSURANCE CRISIS

In 1974 insurance companies began to leave the Pennsylvania medical malpractice insurance market.
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In 1975 the Pennsylvania General Assembly enacted the Health Care Services Malpractice Act (Act 111), and the Pennsylvania Medical Society (PMS) formed its own professional liability insurance company (PMSLIC). Every member of the PMS put up capital, the required amount varying with specialty.

Attorney Fred Speaker, representing the interests of the Pennsylvania Medical Society and participating in the formulation of Act 111, inquired of PMS Board member David S. Masland whether or not they want to make professional liability insurance mandatory. He was told "in no uncertain terms" that Act 111 must provide for mandatory insurance. (telephone call to (717) 255-1161, February 11, 1987, Dr. Meier speaking with Mr. Fred Speaker).
PMS Board member Dr. Orlo G. McCoy, outraged that our license to practice medicine is being tied to insurance, insisted on challenging the mandatory provision of Act 111.
Attorney Fred Speaker was given the task to represent Dr .McCoy. Mr. Speaker told Dr. Meier (Febr. 11, 1987) that his job was to make sure that Act 111 survived the constitutional challenge. Dr. McCoy was unaware of this. He told Dr. Meier that "he (Mr. Speaker) did not bring much actual enthusiasm to the scene in my case." (Letter from Dr. McCoy to Dr. Meier, Febr. 9, 1987).
Constitutional challenge of Act 111 in Commonwealth court fails (McCoy v. Commonwealth Board of Medical Education and Licensure, 391 A.2d 723, Pa. Cmwlth. 1978). In his dissenting opinion, Judge Crumlish wrote:

"The cure afforded by the Act is so overwhelming that it has injured many of those it intended to help. Its regulations are unduly prohibitive to both small practitioners... and new practitioners who neither have the financial wherewithal to meet its requirements nor the clientele able to sustain higher medical costs. Once it is certified that a person is qualified to practice a profession, his right to do so should remain unfettered and unhampered until it is established that because of either misconduct or moral, physical or professional ineptitude, he is not fit to perform his duties."

"Financial security has never been a condition precedent to the practice of medicine, or any other profession, and so to impose such a condition constitutes an unreasonable restriction of a property right resulting in an unconstitutional deprivation of property."
The trial lawyers successfully challenged the arbitration panel provision of Act 111, and the malpractice insurance costs started to skyrocket.
In 1984 the Pennsylvania Medical Society and the Pennsylvania Trial Lawyers Association commissioned a prestigious California management consulting group to study the medical malpractice insurance crisis in Pennsylvania. The group issued its report, the so-called Hofflander and Nye report, one year later.
In 1985 the report authored by Alfred Hofflander, Professor of Finance and Insurance at the Graduate School of Management, University of California, and Blaine F. Nye, a senior associate of the group, was issued. Its recommendation that the CAT Fund's excess insurance function be eliminated was kept from the PMS membership and was not followed.
The American Medical Association (AMA) and the Pennsylvania Medical Society lobbied hard to have chiropractors not recognized as bonafide health care providers and have them declared ineligible for Medicare reimbursements. While these two organizations pursued this venture, the chiropractors succeeded in extricating themselves from Act 111 and got the Chiropractic Act of 1986 through the Pennsylvania legislature. On that issue, one former high PMS official admitted, "we shot ourselves in the foot." Because they did not recognize chiropractors as legitimate health care providers, they really did not oppose the Chiropractic Act. For the same reasons, the PMS never insisted on equal treatment under the law for physicians vis-à-vis chiropractors. The Chiropractic Act of 1986 contains a provision which exempts chiropractors from buying professional liability insurance if such insurance is not available or not affordable. No such protection was provided for physicians and podiatrists.
The Montgomery County Medical Society called for a special meeting of the PMS House of Delegates to address only one issue, challenging the mandatory provision in Act 111 which ties the license to practice medicine to insurance, particularly the mandatory participation in the CAT Fund.
The PMS leadership actively opposed any challenge to the mandatory provision of Act 111 and communicated its official position to the Montgomery County Medical Society in a letter from their General Counsel, Ken Jones, dated July 1, 1986. It stated that "the Society has consistently concluded that mandatory insurance should be retained."
In response to the Pennsylvania Medical Society's support of the CAT Fund and their refusal to follow the experts' recommendation to abolish the Fund, physicians and podiatrists from Delaware County and Montgomery County founded the Physicians' Cincinnatus Society (PCS). The Physicians' Cincinnatus Society was incorporated in 1986.
The PCS prepared to challenge the mandatory provision in federal court and sought equal protection under the law, as is afforded chiropractors under the Chiropractic Act of 1986. Two surgeons and one podiatrist volunteered to be plaintiffs in the case. They all had paid their basic insurance premiums and two had paid their surcharge. One had his surcharge waived until the case was adjudicated. Thus there were no actions pending against them and their licenses were not in jeopardy at that time. The most important issue, mandatory participation in the CAT Fund, Judge Cahn ruled "not ripe for adjudication."
The Federal Judge conceded in his opinion that the right to practice one's chosen profession, including medicine, free from unreasonable government interference comes under the "property" and "liberty" concepts of the Fifth and Fourteenth Amendments and is protected by the Due Process Clause and the Equal Protection Clause of the Fourteenth Amendment. (Meier, et.al. v. Anderson, et.al.,U.S. District Court, E.D. Pa., Civil Action No.87-3145, July 26, 1988).
All legal challenges by the Physicians' Cincinnatus Society continued to be opposed by the Pennsylvania Medical Society, a fact not lost on politically pressured Commonwealth courts, especially since the PMS is supposed to be the voice of medicine in Pennsylvania.
The self-insured centers continued their under-payments to the CAT Fund with the blessings of the CAT Fund Directors and lack of objections by the Pennsylvania Medical Society. Confirmed by the Fund's own annual statistical reports and Director Reed's June 17, 1996, letter to Representative Nicholas A. Micozzie, the amount of Fund money paid out in claims for self-insured providers in excess of surcharge receipts from self-insured providers for the years made available were as follows:

1988 $ 15,782,270
1989 $ 15,238,101
1990 $ 10,602,240
1991 $ 13,175,028
1992 $ 8,862,222
1993 $ 11,713,213
1994 $ 14,364,368
1995 $ 10,891,012
Total: $ 100,628,454

For the above eight year period, the self-insured contributed nothing to the administrative costs of the Fund, which for 1996 was about $17 million. All of this was passed on to community hospitals and the private practitioners. The big medical centers getting big "discounts" also underpaid. These were additional sums private practitioners and community hospitals had to make up by paying ever higher surcharges.
In 1990 CAT Fund Director Pulcini arbitrarily decided that the CAT Fund will pay all of the Section 605 case settlements. Before, the primary insurers paid half of it.
In 1992 the Inspector General's Office conducted a brief five months investigation of the Fund and found all kinds of wrongdoings, but only the two top officials left the agency as a result of it. Business at the Fund went on as usual. The 1992 IGO report was suppressed by the Casey administration and by Governor Ridge who claimed absolute executive privilege and did not release the report when subpoenaed.
On July 5, 1995, John Reed, an attorney from the Geisinger Medical Center, took over as CAT Fund Director. By mid-September 1995, he settled $107 million in claims, which resulted in a 68% emergency surcharge on top of the 102% providers already paid for the year.
Physicians' Cincinnatus Society members and other providers were outraged. Some did not pay the emergency surcharge because they simply could not afford it, and some did not pay as a matter of principle.
The Pennsylvania Medical Society again opposed the Cincinnatus Society's challenge of the CAT Fund in Commonwealth court and encouraged practitioners to borrow the money and pay the surcharge. This fact was not lost on the Ridge administration, nor on the Commonwealth court. The attorneys for the PCS, therefore, took the case for their clients out of the Commonwealth court and proceeded with it in federal court.
While court actions were awaited, the 1996 surcharge was levied at 164%.
For 1996 the CAT Fund Director and Insurance Commissioner approved outlandish "discounts" of 83% for some medical centers, "discounts" blamed for the proposed 254% surcharge for 1997.
In 1996 the PMS House of Delegates passed a resolution urging providers not to pay the 254% surcharge, and called for meaningful tort reform.
House Bill 2210 was passed in the eleventh hour of the last day of the 1996 legislative session and was signed into law as Act 135. It provides that the CAT Fund surcharges will be a percentage of the established JUA premium rates, even though these rates were not established. The Joint Underwriters Association did not have enough experience in the medical malpractice insurance field and had to turn to PMSLIC, the Pennsylvania Medical Society owned insurance company, to determine what these rates should be for the practitioners, which they did. PHICO, the Hospital Association owned insurance company, determined what the JUA rates should be for the hospital and medical centers. The newly created JUA rates for practitioners were set so high that for many the 75% surcharge for 1997 was significantly higher for only $900,000 CAT Fund coverage than the proposed 254% surcharge on their primary insurance premiums for $1,000,000 CAT Fund coverage.
During the negotiations which gave us Act 135, the Pennsylvania Medical Society agreed to a moratorium not to seek any medical liability tort reform, rally in Harrisburg or contribute over $100,000 to the Civil Justice Coalition for four years. After thus bargaining away basic rights, bad legislation (Act 135) was presented and promoted as "meaningful tort reform" by the Pennsylvania Medical Society and the CAT Fund Director.
In 1997 THE COMMITTEE TO ABOLISH THE CAT FUND was formed. It worked with Representative Samuel Rohrer, (R) Berks County, to introduce legislation in 1997 to abolish the CAT Fund in 1997. The Physicians' Cincinnatus Society has urged providers to support this committee. It did so in mailings to its members and contributors, which at that time included the medical staffs of 37 hospitals across the Commonwealth, four county medical societies and one state society.
Late in March of 1997, THE COMMITTEE TO ABOLISH THE CAT FUND had its first mailing, reaching out to 31,156 health care providers.
The Federal Court trial was set for May 27, 1997, for those who did not pay the 1995 emergency CAT Fund surcharge. At the first hearing in Federal District Court in Philadelphia, Judge William H. Yohn, Jr. stated from the bench that he remembered being lobbied for the Act 111 legislation when he was a member of the Pennsylvania House of Representatives. He voted for the Act.
Later in the proceedings, at the October 1997 trial, Judge Yohn refused to consider evidence of the Commonwealth's activities contained in the third amended complaint and ruled against the physicians on other grounds. The PCS lawyers appealed his decision to the U.S. Court of Appeals in Philadelphia. All this time, all of the state agencies were represented not by the attorney general's office, as is standard procedure, but by the same politically well- connected private law firm and paid for by the CAT Fund. Thus the health care providers, in essence, were required to pay for the defense of the state agencies.
Working closely with THE COMMITTEE TO ABOLISH THE CAT FUND, the Physicians' Cincinnatus Society supported Representative Samuel Rohrer's sponsored House Bill 1877, which called for the immediate abolition of the CAT Fund. The Young Physicians section of the Pennsylvania Medical Society also supported Rohrer's House Bill 1877. Through their efforts, at their House of Delegates meeting at Hershey in October 1997, the Pennsylvania Medical Society endorsed House Bill 1877 and agreed to file an amicus curiae brief with the Federal Court of Appeals.
THE COMMITTEE TO ABOLISH THE CAT FUND considered its work done and decided to cease operation at the end of March 1998. The Committee donated its left-over funds to the PHYSICIANS' CINCINNATUS SOCIETY.
For the record, House Bill 1877 was never let out of committee by its chairman, Representative Nicholas A. Micozzie.
In 1998 the U.S. Court of Appeals for the Third Circuit, Eastern Pennsylvania, considered the case and made its ruling later that year. This Court had to decide two issues:
1. Did the district court abuse its discretion
  Under Rule 15 of the Federal Rules of Civil
  Procedure when it struck appellants' third
  Amended complaint from the record?
2. Did the District Court err in concluding that
  The appellants were afforded adequate procedural
  Due process in their license suspensions?
The third amended complaint contained the fact that the hearing examiner did not rule for months until the judge closed the discovery phase of the trial. The attorneys for the physicians made the court aware that this delay was on purpose to influence the court. Later, a second hearing examiner who did not hear the case actually handed down the suspensions. Judge Yohn had ruled that if that should happen, the physicians could continue to practice until the full Licensing Board rules. However, legal notices of the physicians' suspensions were published in the beginning of September and made effective July 1,1997, even though the Medical Licensing Boards did not meet until September 24, 1997. There is no doubt that physicians were deprived of their constitutional right of due process when their licenses were suspended before they were given a hearing before the Licensing Board in violation of Judge Yohn's declaratory ruling of November 6, 1996 and the State Supreme Court Lyness ruling. Rule 15 of the Federal Rules of Civil Procedure was severely bent, to say the least. Under this rule, leave to amend should be freely given, especially since it was obvious that the Commonwealth agencies purposely delayed license suspensions until discovery was closed and Judge Yohn was made aware of this prior to discovery closure.
Commonwealth ignores federal judge's November 6, 1996 ruling and begins to prosecute physicians who practiced under the protection of this ruling during the appeals process, alleging they practiced without a license which is a felony offense. Judge William Yohn refused to enforce his own November 6, 1996 ruling, prompting our attorneys to file an appeal with the U.S. Court of Appeals in Philadelphia. That court reviewed the Commonwealth's egregious prosecution of our colleagues at an oral argument on April 10, 2000.
The federal appeals court for the eastern district of Pennsylvania again ruled against the plaintiffs. When Judge Yohn used legal maneuvers not to stand by his written word, one had to wonder whether or not the word of a judge could be trusted. Now that the appeals court upheld Judge Yohn's legal maneuver, it confirms that in Pennsylvania, even the word of a federal judge cannot be trusted.

The court transcript clearly indicates that Judge Yohn stated that the physicians contesting the CAT Fund emergency surcharge could continue to practice during the appeal of a hearing examiner's suspension until the full Medical Board rendered a decision in the case. By stating so, physicians continued to practice while they appealed their suspensions. Now Judge Yohn states his words had no legal force and allows the Commonwealth of Pennsylvania, with Governor Ridge's knowledge and sanction, to prosecute these physicians for practicing during that time. This is entrapment pure and simple. Judge Yohn knows it, and the three judges who heard the appeal know it or should know it, yet they allowed this gross injustice to continue. Two of them are from Pennsylvania, notably Judge Edward Becker, chief judge of the Third Circuit, the other is from New Jersey. It is regretable that the young Judge from New Jersey had to tarnish his reputation supporting his Pennsylvania colleagues.

Addendum: To fully understand the miscarriage of justice, one must read Lawyers, Judges And Journalists: The Corrupt And The Corruptors by Robert B Surrick, Esq., 2003. You may find Judge Becker's name on pages 294 and 295.

REASSURANCE:

When looking at the judicial system in Pennsylvania, one understands the reason for and finds hope and comfort in the fact that there has not been a Pennsylvania judge on the U.S. Supreme Court since President Herbert Hoover nominated Owen J. Roberts in 1930.
Act 135 of 1996 amended Act 111 (which created the Medical Professional Liability Catastrophic Loss Fund, or CAT Fund), providing for $100,000 yearly increases in the mandated primary insurance coverage to $500,000 with a corresponding decrease to $700,000 in CAT Fund overage by the year 2001. This change was supposed to lower the unfunded liability of the CAT Fund to something manageable so that the Fund could be retired. This has not happened. In fact, the unfunded liability increased to $2.4 billion by the end of 2000, this despite the fact that the Fund collects more in actual dollar amounts than before and now covers $300,000 less. The Fund, controlled primarily by lawyers, keeps paying out more every year, reaching $341,000,000 for the claims period starting September 1, 1999 and ending August 31, 2000. This caused CAT Fund Director John Reed to tell members of the CAT Fund Advisory Board that the CAT Fund would have a deficit of as much as $40,000,000 for the year. He then tried to soften the blow by adding that since the CAT Fund was given short-term borrowing authority in Act 135 of 1996, an emergency surcharge (such as occurred in 1995) was unlikely, only a higher 2001 CAT Fund surcharge is anticipated.
Primary insurers, now writing for $500,000 of the mandated $1.2 million insurance are requesting whopping rate increases for 2001. PHICO based its rate increase request not on claims experience, the industry standard, but on CAT Fund experience for the last three years.
Because of the enormous increase in the 2001 CAT Fund surcharge and the large increase in primary insurance rates for the mandatory $500,000 private incurance, that combined cost is pricing many independent practitioners (physicians and podiatrists) out of the mandated amount of insurance and forcing them to retire or move out of Pennsylvania, or face revocation of their license to practice. This prompted the Physicians' Cincinnatus Society to appeal to every Pennsylvania state legislator individually to urgently address the affordability issue of the presently mandated $l.2 million professional liability insurance.
It is 1975 all over again!
The crisis in 1975 that gave us Act 111, the Health Care Services Malpractice Act, has emerged again. Insurance companies are no longer writing policies for independent practitioners in the high risk specialties in the Philadelphia area, or charge astronomical premiums many cannot afford. What is different this time is that by Pennsylvania law they must carry professional liability insurance ($500,000 primary and $700,000 CAT Fund) or have their license suspended. Before 1975, practitioners could purchase professional liability insurance in the amount they needed and could afford. The present situation has far-reaching consequences, threatening the availability of quality medical care in many areas throughout the Commonwealth of Pennsylvania. Back in 1975, California had the highest medical malpractice insurance rates in the nation. Their legislature studied the problem thoroughly and corrected the underlying causes by enacting the Medical Injury Compensation Reform Act (MICRA). This provided stability in California for more than 25 years now and made professional liability insurance available and affordable. It made quality medical care available and affordable.
February 9 and 10, 2001, Senator Stewart J. Greenleaf, chairman of the Senate Judiciary Committee, and Senator Edwin G. Holl, chairman of the Senate Insurance and Banking Committee, sponsored a hearing on the affordability and availability of medical malpractice insurance. The Physicians' Cincinnatus Society was invited to testify at that hearing and recommended the enactment of a California-type Medical Injury Compensation Reform Act. On February 14, 2001, Senator Holl wrote to Dr. Meier, "I want you to know that I support your position and, immediately after the hearing, requested the lawyers in the Senate to prepare a Pennsylvania law similar to the California law to which you refer." However, what the "lawyers of the Senate" prepared, SB 556 and HB 1802, have no resemblance to the California MICRA legislation. Subsequently, on November 11, 2001 and December 13, 2001 respectively, appeals were made to Senator David J. Brightbill, Senate Majority Leader, and Representative John M. Perzel, House Majority Leader, to amend pending legislation with a provision stating, "healtcare providers are exempt from buying the mandated amount of insurance if such insurance is not available, or not affordable, and under these conditions may purchase insurance in the amount they can afford." It was pointed out to these legislators that such a provision was approved by the Pennsylvania legislature in the Chiropractic Act of 1986 and that physicians and podiatrists, as citizens, are entitled to equal protection under the law.
On March 13, 2002 the Pennsylvania General Assembly passed HB 1802. This legislation provides some tort law reforms but is not expected to significantly lower professional liability insurance costs, because it does not address the problem of litigation-related costs which consume more than half of all premium dollars. In place of a legislative remedy for this, the lawmakers approved a provision by which the taxpayers of Pennsylvania will subsidize the total cost of professional liability insurance with $ 40,000,000 payments to the CAT Fund every year for ten years in order to lower the cost to providers some, but not enough. Some practitioners may still not be able to afford the mandated $ 1,000,000 insurance and thus will not be permitted to practice in Pennsylvania.
Also on March 13, 2002, Representative Thomas P. Gannon, Republican, 161st legislative district, introduced legislation (HB 2417) which states that a health care provider, other than a hospital, "may elect not to be insured or self-insured in the mandated amount if the health care provider has so indicated in writing to the board that licenses that health care provider." The original sponsors of this bill include 15 Republicans and 5 Democrats.
May 30, 2002. At a public hearing at Delaware County Memorial Hospital in Drexel Hill held by Nicholas A. Micozzie, chairman of the House Insurance Committee, Pennsylvania Medical Society President Howard Richter testified in opposition to HB 2417, contrary to the official position of the Society. The official policy of the Pennsylvania Medical Society, established by its House of Delegates, states specifically that " a physician's license to practice should not be tied to anything but training, qualifications, and physical and moral fitness to practice the profession." It should be noted that Dr. Richter is a member of the board of directors of PMSLIC, the insurance company.
CINCINNATUS SOCIETY OFFERS SHORT- AND LONG-TERM SOLUTION TO SOLVE PENNSYLVANIA'S MEDICAL MALPRACTICE INSURANCE CRISIS.
In the September, 2002, issue of News and Updates, the Physicians' Cincinnatus Society offers short-term and long-term solutions to solve the medical professional liability insurance crisis. For details go to our home page and click on Newsletters, then on Crisis Short- and Long-term Solution.
On December 20, 2002, Commonwealth Secretary C. Michael Weaver sent a threatening letter to Pennsylvania's physicians telling them they could face license revocation for abandonment should they stop treating patients, knowing full well that they are prohibited by law to practice without insurance in Pennsylvania. The physicians who cannot afford to renew their policies effective January 1, 2003, were in essence told they could be prosecuted for practicing without insurance and for not practicing without insurance. In one case for violating the law, in the other for abandonment. It is reasonable to ask, whose drum is Secretary Weaver beating? It is doubtful that he would beat that drum without the tacit approval of Governor Schweiker.
THE PHYSICIANS' CINCINNATUS SOCIETY POSITION STATEMENT PROVIDED TO THE PENNSYLVANIA LEGISLATURE ON FEBRUARY 10, 2003:

      The Physicians' Cincinnatus Society has two well-defined goals regarding Pennsylvania's malpractice insurance crisis:

1. To regain for practitioners the same rights enjoyed by members of other professions.
        This can be achieved by the re-introduction of HB 2417, amended to
        a) eliminate the MCARE Fund now, and
        b) paying the annual unfunded liability with funds from four sources:
            (1) The $40,000,000 annual appropriation provided by Act 13 of 2002;
            (2) Applying Auto CAT Fund money;
            (3) Applying some tobacco settlement money;
            (4) Fair assessments of medical center, hospitals, and practitioners.

2. The enactment of California's MICRA law in its entirety to assure that we can
    afford liability insurance in the amount we need. This includes
        A. Incorporating all the much-needed tort law reforms:
            1. A $250,000 cap on awards for "pain and suffering," with the
                attorneys not being entitled to any portion of this part of any
                settlement;
            2. Limits on attorneys fees;
            3. Statutes of limitation;
            4. Periodic payments;
            5. Collateral sources;
            6. A 90-day notice of a patient's intent to sue;
            7. Preventing insurance companies from discriminating against doctors who
                choose to arbitrate;
            8. Providing for uniform language in binding arbitration;
            9. Providing for the right of any insured who experiences an increase of
                10% or more in his malpractice insurance to demand a public hearing
                before the Insurance Commissioner and participate in a cross-
                examination of the insurance company as to the reasonableness of the
                proposed increase.
        B. Incorporating medical quality control measures:
            1. The establishment of a Board of Medical Quality Assurance;
            2. Local review committees;
            3. A central file reporting mechanism.

      Enacting MICRA in its entirety will make quality care available and affordable. It will benefit all segments of society, including employers and employees. It will remove one of the strangleholds on every aspect of our economy.

      The malpractice insurance crisis in Pennsylvania is the most acute in the country. The residents of this Commonwealth must be made aware of the position the Pennsylvania legislature has placed physicians and podiatrists.

      1. Pennsylvania physcians and podiatrists are mandated to buy $1,000,000 liability coverage, $500,000 of it from a pay-as-you-go state-run MCARE Fund, under threat of license revocation;

      2. Physicians and podiatrists who can no longer afford to buy this coverage are banned from practicing in Pennsylvania, which in turn threatens access to quality medical care for many patients throughout the Commonwealth.

      3. Pennsylvania's Health Care Services Malpractice Act of 1975 (Act 111) has mocked the U.S. Constitution for more than a quarter century:
        a) It deprives physicians and podiatrists of basic rights;
        b) It does not meet federal constitutional standards;
        c) It cannot be justified under state banner, because it does not serve any legitimate
            state purpose, and
        d) It actually harms the public and deprives communities of physicians.

      The two goals outlined above will restore our health care delivery system, now obviously broken, and it will serve the common good. It will make quality medical care again available and affordable in Pennsylvania.

In May, 2003 the Physicians' Cincinnatus Society publishes

A MESSAGE TO ALL PENNSYLVANIANS:
Regardless what politicians are telling you, the problem in Pennsylvania was created by the legislature and is simply this. Physicians are mandated to purchase $1,000,000 professional liability insurance with no provisions regarding the availability and affordability of such insurance. They are deprived of their license to practice when, through no fault of their own, they cannot get or afford the full $1,000,000 coverage. Revoking a physician's license to practice under this condition is an unconstitutional taking of property. So far, state legislators have refused to address and correct this, even though every one takes an oath to uphold and defend the Constitution of the United States upon taking office. Holding a physician's license hostage to $1,000,000 insurance is unique to Pennsylvania.

Presently HB 743 of 2003 is languishing in the House Insurance Committee. This proposed legislation would free physicians to buy professional liability insurance in the amount they need and can afford. Urge your State Senator and State Representative to support HB 743 and restore to physicians their constitutional rights. By doing so, you will help create a situation which allows doctors to practice in our state if they choose to do so. This will assure that quality medical care remains available and accessible to all Pennsylvanians. Thank you. Dr. Louis A. Meier.

October 16, 2004. The Pennsylvania Medical Society House of Delegates adopts Resolution introduced by Physicians' Cincinnatus Society President, Louis A. Meier, MD. The Resolve passed by the House of Delegates reads, "Resolved, That the Pennsylvania Medical Society work actively to reintroduce House Bill 2417 of 2002, and make the elimination of mandatory liability insurance requirement a high priority legislative action item for the Society."

February 14, 2005. Representative Thomas P. Gannon re-introduced HB 2417 of 2002 with language agreed to by both the Pennsylavania Medical Society and the Physicians' Cincinnatus Society. The bill is HB 501 of Session 2005, which is again referred to the House Committee on Insurance chaired by Representative Nicholas A. Micozzie.

May 19, 2005. The president of the Physicians' Cincinnatus Society details reasons why HB 501 deserves everyone's support and cites personal experience.

            HB 501, because of its beneficial effects on the availability and affordability of quality medical care for all Pennsylvanians, must be enacted into law. By repealing the medical liability insurance mandate, it solves many problems engendered by the HEALTH CARE SERVICES MALPRACTICE ACT. Forty-two states have no mandate at all, while the others require much less and do not have a mandatory CAT Fund. As it stands now, practitioners in Pennsylvania can be forced out of their chosen profession by insurance companies simply by canceling policies or raising premiums to unaffordable levels. Clearly the true "stakeholders" are the doctors and their patients. A distinction must be made between interest groups and the real "stakeholders" so that the common good can be served.

            The present condition of "take it or leave it and lose your license" puts doctors at the mercy of poorly regulated insurance companies. The enactment of HB 501 will correct this and the misuse of the functions of the Boards of Medicine, which have as their stated mission the protection of the public, addressing quality of care issues, not the suspension of the licenses of good practitioners merely because they can no longer afford the mandated amount of liability insurance. This has actually happened to me and others.

            I have five years of specialty training, am board certified in surgery, and am a Fellow of the American College of Surgeons and the Philadelphia College of Physicians. In my twenty-plus years in practice I did not have a single claim against me, yet my license was suspended when I could not afford the 1995 emergency CAT Fund surcharge of 67%, which came on top of the 104% surcharge I had already paid for the year. I documented for the Board of Medicine that I could not afford this additional surchage and provided copies of our federal tax returns. The medical examiner who heard my case, Chere Winnek-Shawer, did not rule on it. Months later, another hearing examiner, Suzanne Rauer, ruled on it without ever seing me or interviewing me in any way, and even in the face of the federal tax returns provided by me, stated in her ruling that she did not believe me. She suspended my license for 6 months and fined me    $7000. My license was to be re-instated only after I served the 6 months suspension, paid the $7,000 fine, and paid the emergency surcharge which I could not afford when I was practicing. I need not explain to you that this effectively deprived me of earning a livelihood in my chosen profession, for which I trained six years beyond medical school. I might add here that the National Practitioners Data Bank figures for Pennsylvania show that in 1995 a total of      $807,000,000 were collected in premiums and surcharges, but only about $80,000,000 actually reached victims of medical malpractice, or 9.9%. Yet a 67% emergency surcharge was imposed on top of the 104% already levied.

            The perversion of the functions of Pennsylvania's Board of Medicine is a cancer in its early stages and has to be addressed. The enactment of HB 501 would automatically let the Boards of Medicine stick to their stated mission of protecting the public by addressing quality of care issues.

            As an additional benefit derived from the enactment of HB 501 is that practitioners would no longer be captives of the oppressive MCARE Fund. The MCARE Fund abatements started in 2003 are a recognition and admission that physicians can no longer afford the outlandish surcharges. This Fund serves primarily the lawyers, and not the victims of medical malpractice. In the words of Michael J. Stack III, a former attorney and executive deputy director of the CAT Fund, now MCARE Fund, "Members of the Pennsylvania plaintiff's bar refer to the CAT Fund as the goose that lays the golden eggs." (in his article titled "Don't Kill The Goose That Lays The Golden Eggs," published in the March/April 1995 issue of The Pennsylvania Lawyer). The abolition of the Fund was recommended in the Hofflander/Nye Report* as far back as 1985 by the experts commissioned by the Pennsylvania Medical Society, the Hospital Association of Pennsylvania, the Pennsylvania Bar Association, the Pennsylvania Trial Lawyers Association, and others to study Pennsylvania's malpractice insurance crisis. The "unfunded liability" of the Fund can be covered by the mechanisms used to pay for the abatements. It is no longer a valid scare tactic to be used by those who want to maintain the Fund for their own benefit.

            Finally, when insurance companies no longer have a captive clientele, the free market will bring premiums down to more reasonable levels. It would encourage them to use experience rating as opposed to class or even specialty rating. As pointed out in the Hofflander/Nye Report, this would not only permit reduced medical malpractice premiums for qualified physicians in terms of eliminating the problem of intra-class or intra-specialty subsidization, but would also provide economic incentive to reduce malpractice incidence overall.
_________________________________________________________________________
*This is a report on Medical Malpractice Insurance In Pennsylvania issued by Alfred E. Hofflander, Ph.D., Professor of Finance and Insurance at the Graduate School of Management, University of California, Los Angeles, and Faculty Principal with the MAC Group, Inc., and Blaine F. Nye, Senoir Associate with The MAC Group, Inc., 1000 El Camino Real, Suite 250 Menlo Park, California 94025-4327.

ADDENDUM:

            Dr. Louis A. Meier offered these personal comments:

            "As long as the injustice inflicted on me and my family is allowed to stand, it remains a reminder of the political corruption of our judicial system in Pennsylvania, both at the state and federal level. Because of the political corruption of our courts, we should all be troubled by the fact that the physicians on the Pennsylvania State Board of Medicine remain quiescent in the face of gross injustice. Unjust laws can only be imposed with people willing to enforce them, henchmen of sorts, people who are willing to put their name to the execution of unjust acts. Those of us who have reached a certain maturity know that in the final analysis, character and the strength of character define a person. This should be the main consideration in recommending anyone to serve on the Board of Medicine."

July 26, 2005. The House Insurance Committee held a public hearing on HB 501 in Harrisburg. Testifying in favor of the Bill were William Lander, MD, President, Pennsylvania Medical Society, Louis Meier, MD, President, Physicians' Cincinnatus Society, George Isajiw, MD, Internal Medicine, Lansdowne, and Emerita Gueson, MD, Gynecology, Jenkintown. Testifying against the Bill were Mary Ellen McMillen, Vice-President-Legislative Policy, Independence Blue Cross, and James Redmond, Senior Vice-President, Hospital and Health Systems Association of Pennsylvania.