NJ to provide malpractice insurance assistance

New Jersey Governor James McGreevey signed the New Jersey Medical Care Access and Responsibility and Patients First Act earlier this week. The medical malpractice legislation provides for tort reform, healthcare system reform, and insurance reform, according to the state.

The bill was designed to stem skyrocketing malpractice insurance premiums and ensure that New Jersey's families have access to quality healthcare from the physicians they trust, the governor's office said.

The bill's insurance reform provisions prohibit individuals from having dual membership on the boards of medical malpractice insurers and professional trade associations, and also allows physicians to form medical malpractice liability insurance purchasing alliances in order to negotiate reduced medical malpractice liability insurance premiums.

Moreover, the act requires insurers to provide a reduced premium for policies that do not include a "consent to settle" provision, and requires insurers to offer policies of at least $5000 per claim and up to $1 million per claim. The law prohibits carriers from increasing insurance premiums for 180 days within filing of an action alleging medical malpractice if the insured is dismissed from the action. Other provisions include allowing the Department of Banking and Insurance (DOBI) commissioner to order a rate rollback if it is determined that a carrier's medical liability rates are not in compliance with the law.

The act also creates a three-year $78 million fund to provide direct premium relief to doctors and self-insured hospitals, relief to hospitals, and a student loan forgiveness program for doctors in high-risk specialties. The fund would be created by a $75 assessment on certain professionals, such as doctors, dentists, and lawyers, and a $3 surcharge on all employers who are subject to the New Jersey unemployment compensation law.

Tort reforms in the bill include reducing the statute of limitations for birth injuries to age 13, and providing for complementary dispute resolution to encourage early disposition of medical malpractice lawsuits, according to the state. Other provisions include granting the court greater discretion to review awards and allowing for structured judgments. In this approach, awards of less than $1 million must be paid immediately; awards over $1 million may be paid 50% immediately, with 50% amortized over 60 months, the state said.

By AuntMinnie.com staff writers
June 11, 2004

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