Doctor's self-insurance found to meet standard

A West Virginia surgeon's court victory to insure himself against medical liability may prompt other physicians to pursue similar alternatives to traditional coverage.

General surgeon R.E. Hamrick Jr., MD, won the right to carry his own liability insurance when Kanawha County Circuit Judge James Stucky granted summary judgment in his case against the Charleston Area Medical Center. Dr. Hamrick, of Charleston, W.Va., filed a lawsuit in September 2004 after the center took away his privileges when he insured himself for $1 million.

Evan Jenkins, executive director of the West Virginia State Medical Assn., said it's unclear if many physicians have $1 million to insure themselves, but he said some may consider it.

"Dr. Hamrick's experience will cause some physicians to think about alternatives," he said. "Physicians throughout the country are thinking outside the box on how to address this [medical liability] crisis."

Karen Miller, Dr. Hamrick's attorney, said the doctor's victory validates for physicians nationwide a financially sound alternative to insurance company coverage.

"The good doctors out there do not commit malpractice, and they'll take more of an interest in defending their work," said Miller, who practices in Charleston and is Dr. Hamrick's sister.

American Medical Association policy calls for each physician to be free to determine whether to carry liability coverage as well as the amount of such coverage.

Medical liability crisis

West Virginia is one of 20 states on the AMA's list of states in a medical liability insurance crisis. Doctors have retired or moved from West Virginia to other states due to rising liability insurance rates, and physicians have fought for tort reform. West Virginia has passed reforms such as a $250,000 cap on noneconomic damages, but medical leaders say liability rates remain high.

Dr. Hamrick's problems started Sept. 10, 2004. A hospital official learned the surgeon's liability insurance policy was ending and told the doctor he would lose his hospital privileges unless his coverage was restored, according to court records. The medical center required at least $1 million liability coverage.

Dr. Hamrick responded that he had a $1 million self-funding program to provide coverage against any claims. During his 21 years at CAMC, Dr. Hamrick had not paid any malpractice claims, court records show. But CAMC revoked the surgeon's privileges, saying his program did not meet its insurance requirement.

On Sept. 13, 2004, Dr. Hamrick filed his lawsuit. The circuit court did not act on his motion for an injunction that would have allowed him to practice at the center. The case was appealed to the West Virginia Supreme Court of Appeals, which granted a temporary injunction, allowing Dr. Hamrick to continue practicing, and sent the case back to the lower court.

In his June 24 decision, Stucky said Dr. Hamrick's self-funding program met the state's definition of medical professional liability insurance and is actuarially sound.

The court still must decide if CAMC interfered with the doctor's right to treat patients by removing his privileges, Miller said. Through his attorney, Dr. Hamrick said he wants to stay in West Virginia.

CAMC spokesman Dale Witte said the medical center was developing a policy for doctors to self-insure when Dr. Hamrick filed his suit. He said the new policy was passed in April.

"We're grateful that the court recognizes the importance of hospitals maintaining medical malpractice requirements for physicians practicing at hospitals. We feel this ruling also validated our policy," Witte said.