It probably wouldn’t go over too well with most people if their auto insurance company informed them that they had to double their coverage limits in order to maintain their policy. Many would likely switch auto insurers. But what if your auto insurer was the only one in your area, and you had to keep your coverage with them to continue driving?

That’s the example that Dr. Peter Sokolove, California ACEP president, used to demonstrate what was happening with Dignity Health (formerly Catholic Healthcare West) in San Francisco. The regional health care system, with hospitals in California, Arizona, and Nevada, recently issued proposed requirements that emergency physician groups with which it contracts maintain medical professional liability insurance (MPLI) limits of $2 million/$6 million – double the $1 million/$3 million previous limits. In addition, Dignity Health added a new indemnification clause whereby the physician groups must agree to indemnify the hospital from any claims or costs arising from a variety of circumstances, including physician negligence (malpractice).

“It’s estimated that these new MPLI limits would raise premiums between 30% and 40%, so that immediately increases the cost of providing emergency care and, thus, increases costs for patients,” said Dr. Sokolove. “In addition, with larger policy limits, emergency physicians now become a bigger target for additional lawsuits and larger settlement demands.”

According to California Medical Association data, the potentially increased MPLI limits are largely unnecessary. Those data confirm the average physician claim payout is less than $200,000, and very few claims result in a settlement or verdict in excess of $1 million.

The proposed mpli limit change ‘just adds gasoline onto the fire of spiraling expenses. it really is the bad idea of the year.’

Dr. Paul Kivela, an ACEP Board member, said that hospitals are under tremendous pressure, especially considering the number of people losing their health care coverage, the aging and often sicker population, and more expensive health care advances. “This may seem like a good idea from a microscopic level, but when you step back, it’s not going to save anybody any money,” Dr. Kivela said. “What it will do is increase health care costs for individuals and possibly decrease access to care. And while it may start with emergency physicians, ultimately it’s going to extend to other practice providers as well.”

Dr. Kivela agreed with Dr. Sokolove’s estimate, and said that such a policy limit requirement would likely mean a 40% MPLI increase in the first year alone, resulting in higher patient costs. “This is a time when health care costs are crucial,” said Dr. Kivela. “State budgets are failing and emergency care is already underfunded. And now you’re going to raise the cost of providing that care? I don’t believe this is a well-thought-out idea.”