AMA says doctors can levy extra charges

But Medicare and Medicaid patients should be exempted from surcharges to cover medical liability insurance costs, a Board of Trustees report cautioned.

By — Posted July 11, 2005

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Chicago --The American Medical Association supports physicians who want to assess a surcharge to patients to help pay their liability premiums or to cover administrative work.

Delegates at the AMA Annual Meeting in June voted to support surcharges as one of a number of policies related to the medical liability crisis.

A Board of Trustees report, however, cautioned physicians that some fees, especially if charged to Medicare and Medicaid patients, may run afoul of the law. Physicians are only allowed to charge for administrative services not covered by reimbursements by public insurers, and discerning what fees are included in those reimbursements is not always easy.

Liability costs already are factored into reimbursements made by public payers, and many managed care contracts prohibit physicians from charging patients supplementary fees, according to the report.

"In short, substantial legal barriers exist to implementing liability surcharges on patients except for those who are uninsured or pay out of pocket," the report states.

Some physicians had concerns about the practice, especially in helping to pay for liability premiums.

"One of the unintended consequences may be that it puts [filing a lawsuit] in the patient's mind," said David Ross, MD, a family physician in Topeka, Kan., who is president of the Kansas Medical Mutual Insurance Co., a physician-owned liability insurance company. "I don't think it's too much of a stretch to think, 'The doctor must be thinking it's OK for me to sue, or else he wouldn't be making me pay for this.' "

The board report reminded physicians to make sure charges are not only reasonable and voluntary, but also that they do not affect the physician-patient relationship.

Other liability resolutions

The House of Delegates also voted to:

  • Support federal legislation that would amend the Internal Revenue code to allow physicians and other medical "entities" to establish tax-exempt professional liability trusts to help them pay medical liability claims. "This is another funding mechanism physicians could use to stay in practice," said then AMA Past President Donald J. Palmisano, MD.
  • Study the costs and benefits of compiling a medical liability closed-claims database. The American Society of Anesthesiologists has a closed-claims database, and physicians in other specialties believe that a database could be a way for them to quantify medical liability risk based on type of procedure. The information could then be used to lower their lawsuit risk, physicians said.
  • Work to deter frivolous medical liability lawsuits.
  • Assess the inclusion of Guam and other U.S. territories on the AMA's medical liability crisis map, and work with the medical societies from those territories to reform the liability system.
  • Support federal legislation that won't preempt state laws on contingency fee limits if those limits are more restrictive, and explore legislation "that would correct inadequate state medical liability laws, while preserving proven effective state medical liability reforms."

The issue of balancing federal lobbying efforts with state laws that already are in effect produced a passionate debate among delegates.

Physicians from Florida proposed a resolution that would direct the Association, in the process of seeking a federal $250,000 cap on noneconomic damages and limits on attorney contingency fees, to seek provisions that would allow federal law to preempt state law in cases where states had higher caps or fee limits, but not preempt state law in states that had lower caps or fee limits.

"We are dying in the streets," said Troy Tippett, MD, a neurosurgeon in Pensacola, Fla., and president-elect of the Florida Medical Assn. "We need to do something with the policy of the AMA that helps us today."

Dr. Palmisano said adopting such narrow policy could do harm in states employing total caps or other strategies to help keep them from being dragged into the liability crisis.

The Florida resolution was referred to the AMA Board of Trustees.

Senior Reporter Tanya Albert contributed to this report.

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