Coverage squeezed for elder-care physicians: Tort crisis hits nursing homes

Physicians with nursing home patients are now facing medical liability insurance premium hikes that are forcing some of them to re-evaluate whether they can continue the practice.

It is well-known that rising premiums have pushed some physicians out of high-risk specialties such as obstetrics and neurosurgery. Now physicians specializing in elder care are spotting similar disturbing trends.

Among the most troubling findings in a recent survey: 21.5% of physicians who work in nursing homes said they had problems obtaining or renewing their medical liability insurance in the past year.

Of those physicians, 34.2% said insurers refused to cover them because they work in nursing homes, according to an American Medical Directors Assn. survey of 325 physicians completed in December 2003.

More than 12% of those physicians said that insurance carriers had pulled out of the nursing home market in their areas.

"We're very concerned about who is going to care for the elderly, especially as the aging population explodes," said Meg LaPorte AMDA's acting director of government affairs.

While nursing home patients are still able to get care, physicians may be responsible for a larger number of patients and patients may no longer have their first choice of a doctor.

Family physicians and internists who used to follow their patients into nursing homes are no longer doing that, said AMDA President James Lett II, MD, who works in California nursing homes. Even some who have dedicated their careers to the elderly have had to give up the nursing home portion of their practices or resign their medical director roles.

"I find it frightening," Dr. Lett said.

Hanging on

Problems are cropping up from coast to coast. Even California physicians haven't gone unscathed.

Tort reform passed in the mid-1970s, commonly known as MICRA, has mostly insulated California physicians from liability insurance problems. But nursing home medical directors and doctors caring for nursing home patients have increasingly been named in lawsuits brought under the state's elder abuse law, which is not subject to MICRA's $250,000 cap on noneconomic damages.

It's resulted in higher premiums or difficulties getting insurance for doctors who see nursing home patients. Some doctors are choosing not to take on the extra financial burden.

"Physicians are now saying, 'Why should I do this?' " Dr. Lett said.

Charles A. Crecelius, MD, PhD, who is a nursing home medical director and geriatrician in the St. Louis area, said some physicians there are making similar decisions.

At least two doctors opted not to work in some of his nursing homes because it didn't make financial sense. A neurologist was ready to sign on but decided against it when he discovered his insurance would increase by $15,000 annually.

A new physician who wanted to work in nursing homes reconsidered after being told his premium would be $32,000 if he chose that path. Minus the nursing home patients, the new physician was quoted a rate of $5,000.

Dr. Crecelius also has felt the impact of rising insurance rates.

A couple of years ago, his annual premium, which had been $5,000 to $7,000, jumped to $37,000. The next year, the insurer quoted his rate at $87,000.

Instead of paying that premium, he switched to a self-insurance pool. His new rate is $22,500, but he faces the risk of having to pay more if the insurance pool runs out of money before the year is up.

"Fortunately, this year is better," Dr. Crecelius said. "But the problem isn't fixed."

Call for tort reform

Nursing home physicians are joining the call for tort reform that includes noneconomic damage caps.

They also want to see the law better protect nursing home facilities from frivolous lawsuits and excessive noneconomic damage awards. Many facilities are going bare because they can't get insurance. That results in some medical directors resigning because they have traditionally been covered under the facility's policy.

Also, physicians say, revisions need to be made to the elder abuse laws under which doctors are increasingly being sued.

"The organizations who oppose changes in the elder abuse statutes do not realize that they are going to push doctors out of nursing homes," said Phoenix internist and geriatrician Luis Gonzalez Jr., MD.

Dr. Gonzalez spends about 25% of his time in nursing homes and the other 75% as a hospice medical director. His premiums have more than doubled in the past two years to $26,000 annually. He said he will have to quit his medical director positions and quit seeing nursing home patients altogether if his rates continue to increase.

"Heed my warning," Dr. Gonzalez said. "Fix the Arizona insurance crisis and the Arizona elder abuse statutes, or Arizona nursing home elder residents will not have physicians available to provide them care."

Some physicians believe a system overhaul that includes higher reimbursement levels for physicians and facilities is needed.

"It's time for society to step up to the plate here and decide whether elders are important to society or not," Dr. Crecelius said. Without changes, "who will take care of those patients? One of those patients is going to be me one day."